Six in 10 charities to cut back on services as pandemic bites, study reveals

Almost six in 10 charities could cut back on essential services as a result of the coronavirus pandemic, a major study has revealed.

The research, published by not-for-profit analyst Pro Bono Economics in partnership with the Chartered Institute of Fundraising and the Charity Finance Group, highlights the devastating impact the outbreak could have on charity finances.

According to the paper, falling donations and a loss of revenue is likely to leave a £10 billion hole in the pockets of charities in 2020/21.

In practice, this could translate to six in 10 (58 per cent) organisations reducing services and more than two in 10 (23 per cent) making cut backs and redundancies. This proportion increases to over four in 10 (44 per cent) when including only the largest charities.

But the survey of 455 organisations also reveals that trustees have already taken action to rescue their charity. The industry tracker suggests that 5,400 jobs in the not-for-profit sector have already been lost to the pandemic, with that figure likely to rise to 60,000 by the end of the year.

These trends are likely to persevere at least into 2022, the researchers add, with 70 per cent of charities expecting it to take more than 12 months for income to return to “pre-crisis levels”. Around 26 per cent believe it will take more than two years.

Commenting on the findings, Matt Whittaker, CEO of Pro Bono Economics, said: “Charities have been under extraordinary pressure since the start of the pandemic, dealing with the perfect storm of increased demand and constrained resources. To date they have responded with typical resilience and invention, but the coming months look set to prove tougher still.

“With the recession biting and unemployment rising, the social sector has never been more needed. But an alarming proportion of jobs in the sector are now at risk. That means many of the charity workers who have provided vital support to millions across the country since the start of the Covid crisis are facing a very uncertain future.”

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Posted in Blog, Charities.