One in six charities fear closure as crisis hits, say charity chiefs

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 a new campaign called Back Britain’s Charities (http://backbritainscharities.org.uk/) 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.

Contact: Charities Aid Foundation press office: 03000 123 275/03000 123 212 Out of hours contact Lou Garrett 07827 938122/07981 562341


Donations to charity fall by 20% as fewer people give – new report finds

Donations to charity fell by 20% in real terms during 2011/12. The public gave £1.7bn less to charity than the previous year, according to the longest-running and most authoritative annual study of giving across the United Kingdom.

The number of people giving to charity has declined and the amounts they gave also fell, according to a major new report, compiled by the Charities Aid Foundation (CAF) and the National Council for Voluntary Organisations (NCVO).

Today (Tuesday November 13) CAF and NCVO launch a campaign to Back Britain’s Charities, aimed at ensuring that the vital work of charities is not damaged by this worrying fall in giving.

The report, based on a survey of more than 3,000 people by the Office for National Statistics, found the total amount given to charities by people across the UK fell from £11bn to £9.3bn during 2011/12 – a cash fall of £1.7bn, and the largest in the survey’s eight year history. Adjusted for inflation, this fall in donations represents £2.3bn.

The average (median) amount people gave each month fell from £11 to £10 last year and was down from an average of £12 a month in 2009/10.

Key findings include:

  • Total donations fell by 15% in cash terms and 20% in real terms (i.e. adjusted for inflation) between 2010/11 and 2011/12.
  • Estimated total donations to charity were £9.3bn, down £1.7bn on 2010/11 in cash terms and £2.3bn in real terms (i.e. adjusted for inflation).
  • The proportion of people donating to charitable causes in a typical month fell from 58% to 55% in the past year.
  • The average (median) amount  given per donor in a typical month fell from £11 in 2010/11 to £10 in 2011/2012.
  • 28.4 million people gave to charity, more than half of all UK adults.
  • Medical research, hospitals and hospices, and children and young people are the most popular causes among donors, but religious causes received the largest average donations.
  • Women continue to be more likely to give to charity than men, with 58% of women giving to charity in a typical month compared with 52% of men.
  • Cash is the most common form of giving (over 50%) in 2011/2012.  Direct debit accounts for  31% of the total amount donated, an increase of 6% from 2010/2011.

Sir Stuart Etherington, Chief Executive of the National Council for Voluntary Organisations, said:

“I am very worried that fewer people are giving to charity.  Charities are already being squeezed by greater needs, cuts in funding and rising costs.

“I know people want to help when they can and I know that they can make a difference. If I could ask one thing, I’d ask people to commit to regular donations through direct debit, and give using Gift Aid, so charities can plan properly. We cannot afford to lose the services charities provide.”

John Low, Chief Executive of the Charities Aid Foundation, said:

“The drop in giving shown by our survey is deeply worrying for those charities which rely on donations to provide vital frontline services. Combined with public spending cuts this represents a potentially severe blow for many charities.

“We hope the fall in giving shown in our survey is a temporary decline and not the start of a damaging trend. If donations continue to fall, many charities will face profound difficulties carrying on their work and the people and communities they serve will suffer.

“Britain remains one of the world’s most generous nations. But cash is tight for everyone and people are finding it harder and harder to find money to give to charity. It is vital that Government, businesses and the public Back Britain’s Charities so they survive and carry on their work in these tough times.”

Charities provide a range of vital services across the country, supporting many of the most vulnerable people and making a real difference to people’s lives.  The report says that these remain difficult times for many charities, particularly small and medium sized organisations who we suspect may be disproportionately affected by reductions in giving.

Many charities are not in the fortunate position of holding reserves. Faced with falling donations and public spending cutbacks, those that do are having to dip into them to keep meeting the needs of their beneficiaries.  The report says that some are having to close front-line services, some are having to make redundancies and some face closure. It argues that the drop in donations is a concern for everyone in our society, not just charities.

CAF and NCVO are calling for:

  • People to support charities through regular giving, regardless of how much time or money  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.

Peter Lewis, Chief Executive of the Institute of Fundraising commented

“This report shows how important it is for charities to fundraise effectively to support their vital causes. Campaigns like this are important to help raise awareness, and hopefully more money, for causes across the UK.”


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