Coronavirus impact sees UK charities set for £12.4bn income shortfall

Charities in the UK could see a £12.4 billion shortfall in income this year due to the impact of the coronavirus, a survey has shown.

The survey, carried out by sector bodies the Chartered Institute of Fundraising, the Charity Finance Group, and the NCVO, found that respondents were expecting a 24% drop in their total income for the year: £12.4bn if the average was applied to the sector as a whole.

In total, 91% of the charities that responded forecast a drop in their budgeted income with 56% believing it will decrease and 35% expecting a significant decrease.

The organisations behind the report are calling for extra help from the Government.

Chief executive of the Chartered Institute of Fundraising, Peter Lewis said:

“The fact that the charities who responded to the survey are planning for a loss of almost a quarter of their total income is extremely worrying. The government urgently needs to review and enhance its emergency support for charities, with a further bespoke package of support, an extension to the Job Retention Scheme that specifically supporting those charitable activities which are still unable to take place, or both.”

In April, half of charities surveyed by Charities Aid Foundation said they would not survive for more than a year without additional help from the Government or other sources. Top of their requests for the Government were unconditional cash grants, an unrestricting of all restricted funds, and for it to make it mandatory for other funders to relax any grant conditions.

CAF’s survey also revealed that 53% of charities had seen donations decrease since the start of lockdown.

Fall in individual giving

Data from research consultancy nfpSynergy, which has been monitoring giving levels every quarter for over a decade, backs this up, finding individual giving levels to have dropped significantly recently: to their lowest in a decade. Its figures show that in late May, 60% of the public said they had donated to charity in the last three months, down from 69% in January this year, and the lowest overall level since it started asking this question in 2011. Legacy income has also been hit hard with projections that it could fall by 4-23% in 2020, although long-term growth is still predicted, according to Legacy Foresight figures.

However, nfpSynergy also found that the average amount given over the last three months has risen to £67.70, suggesting that while the overall number of donors has declined, those who continue to give, are giving more.

Rise in online donations

Welcome news from business software provider The Access Group charts the rise in online charity donations this year.

Reporting on one-off donations made to the websites of over 420 small and medium sized charities between January and May this year, the data reveals that the value of online donations more than doubled the amount given during the same period of 2019.

At the beginning of lockdown in the UK (mid-March), donations soared reaching more than 10 times their normal amount, before settling in May at twice the value of donations given. 

Simon Baines, managing director (not for profit) at The Access Group, highlighted the need for charities to have a strong digital presence to help them get their messages out to the public quickly, and making it easy for people to give. He said:

“What’s clear is that those charities ready with websites set up for online giving were one step ahead. They were able to react quickly with their calls for support, ultimately benefitting from the public’s sentiment to give during lockdown. This highlights just how crucial it is for charities to have a strong presence online, in both their websites and their use of digital engagement with supporters.”

To support charities’ digital transformation, The Access Group has created a free downloadable guide, The Digital Maturity Playbook for Not for Profit Organisations. The new guidance takes an in-depth look at the four key fundamentals of digital maturity, with the aim of helping not for profit organisations evolve faster and optimise their use of emerging technologies.