9 December 2012
One in six charities believe they may face closure in the coming
year amid public spending cutbacks and falling donations from the
public, according to a new poll of charities.
Nearly half of charities say they are being forced to dip into
reserves to maintain their work, while nearly one in three say they
fear being forced to cut services or jobs, according to the survey,
commissioned by the Charities Aid Foundation (CAF).
More than eight out of 10 charities believe the charity sector
is facing a crisis, with two in five (40%) worrying that their
charity may be forced to close if the economic situation does not
improve.
Eight out of 10 believe that the economic situation is the
greatest threat to UK charities, while nearly three quarters (73%)
believe that charities are unable to fulfil their goals due to a
reduction in donations or Government funding.
Research specialists Research Now surveyed 252 senior workers in
charities of all sizes.
The survey found:
- 17% said it was likely that their charity may face closure in
the next 12 months
- 40% worry that their charity may have to close if the economic
situation does not improve
- 49% say they have had to use reserves to cover income
shortfalls over the last year
- 26% say they had cut front-line services
- 25% say they had made staff cuts
- 90% believe generating more income is going to be their
greatest challenge
- 85% believe that “given the current economic situation I am
concerned for the future of UK charities”
- 81% believe that the current economic climate is causing the
charity sector to be in crisis
- 80% believe that the economic situation is the biggest current
threat to the future of UK charities and their own charity
- 73% believe that charities are unable to fulfil their full
philanthropic goals, due to reduction in government funding and/or
donations
- 68% believe that the economic downturn has affected the
services their charity provides
- 45% believe that their charity will have to scale back its work
over the next 12 months
- 35% say that they can see the economic situation improving in
the next 12 months
The survey showed the effects the downturn has already had on
many charities. Nearly half of the executives surveyed (49%) said
they were using reserves to cover income shortfalls in the past 12
months. More than a quarter (26%) said they had cut front-line
services and one in four (25%) said they had made staff cuts.
Earlier this month, research by CAF revealed that small and
medium sized charities are facing spiralling losses, with reported
deficits of more than £300m in 2011 - compared with an
overall surplus of £325m in 2007.
Last month, CAF launched Back Britain’s Charities with the
National Council for Voluntary Organisations (NCVO) which calls on
the Government, businesses and people to get behind the nation’s
charitable organisations.
CAF and the NCVO are calling for:
- People to support charities through regular giving, regardless
of how much time or money they can give.
- The Government to modernise and promote Gift Aid and payroll giving so
donations go further.
- The Government to ensure that public bodies do not cut funding for charities disproportionately when
making spending reductions.
- Business to support charities either through donations, or
through practical means.
- Charities to work together with the Government to modernise and
improve fundraising and enhance their impact, so that every pound
given goes further towards helping beneficiaries.
John Low, Chief Executive of the Charities Aid Foundation, said:
“Times are tough and people have less money to donate to
charities. This combined with significant public spending
cuts and increased demand for charity services, is having a
shocking effect on many charities, calling into question their very
viability.
“Many organisations are having to dip into their reserves, cut
vital frontline services and some are even concerned about whether
they can survive in these toughest of times.
“Charities of all sizes play an essential role in our society,
providing social care and education as well as helping some of the
most vulnerable people in our communities. We all need to act
now to support Britain’s charities so they can continue their vital
work.”
The fieldwork for the survey was conducted by Research Now
between 18 September 2012 and 1 November 2012. An online survey was
completed by 252 senior level charity workers, who have direct and
significant input into the financial, operational, or fundraising
strategy of the charity.
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