Gloomy winter ahead for charity sector

25 September 2020
Data, Research and Analysis
Standard Content

Lockdown worries for 55% of charities as 2020 takes its toll.

As new restrictions are announced by government in preparation for a second wave of Covid-19, over half of charities warn demand for their services may outstrip their ability to deliver - suggesting many people will be left without access to vital services they came to rely on during the previous lockdown.

In June, PBE estimated the sector was facing a £10.1bn funding gap. Since then, almost half (47%) of the UK’s charities have revised down their financial forecasts over the last two months in anticipation of a tough winter ahead, according to the latest Covid Charity Tracker published today by Pro Bono Economics, in partnership with the Institute of Fundraising and the Charity Finance Group.

Nearly all (94%) charities say that Covid-19 has posed a financial challenge, with drops in earned income, public donations, and money associated with fundraising activity like lotteries and auctions proving especially problematic. More than half of the survey respondents say public donations have fallen, with one-in-five reporting a drop in such income of more than 25%. However, funding from public sector contracts, trusts and foundations has broadly held up to date.

The overall drop in charity income has forced organisations to make cuts to the frontline support they offer. More than one-in-four say they have already made redundancies, and one-in-five expect to make cuts once the government’s Job Retention Scheme is withdrawn. Among those reducing their headcount, 59% say that service delivery functions such as helplines, events and training are bearing the brunt. Fundraising capacity is also being cut, with 19% of those who are shedding jobs saying that fundraising teams are most likely to be affected.

While some parts of the economy are on the up after a tough first half of the year, charities have yet to see the light at the end of the tunnel. The combination of economic recession, rising unemployment and the looming tightening of lockdown adds up to a gloomy backdrop for the sector in the run up to Christmas.

Charities and other civil society organisations play a vital role in the day-to-day lives of many millions of us – and even more so at times of crisis. As the Chancellor reconsiders his support for businesses in light of the second wave, it’s crucial that he focuses also on the needs of those charities which do so much to help.

Matt Whittaker, CEO of Pro Bono Economics

The findings of our latest survey are not surprising but are deeply troubling. Social change organisations play an enormous role in our communities, providing crucial services to millions of people every day, nationwide. A significant number now face an increasingly uncertain future. Our capacity to deliver for both the short and long term is shrinking fast at a time it is #NeverMoreNeeded.

We are calling on government to take action now to address the fragility of the organisations working at the heart of our communities; working on the frontline, helping to mitigate the worst effects of the Covid-19 crisis. We must ensure that charities and social enterprise are supported to meet the public need and sustain healthy communities.

Caron Bradshaw, Chief Executive of Charity Finance Group

This research further confirms the significant scaling back of charitable services and activities just when people across the UK need them most.

Fundraised income continues to be hit despite the valiant efforts of our members and the fundraising community around the UK, and tragically many fundraisers are facing redundancy as their organisations are forced to make incredibly difficult decisions. Politicians and policy makers need to act now to safeguard vital charity-delivered services and activities around the UK.”

Peter Lewis, Chief Executive of the Chartered Institute of Fundraising

Members Only Content