UK charities call on government for urgent funding, highlighting risk of collapse

Charities and sector bodies across the UK have united to call on government to deliver a package of support for the sector, warning that without an urgent injection of money many charities will be forced to close their doors.

Peter Lewis, chief executive of the Institute of Fundraising, said:

“To ensure that charities are able to both maintain their existing services to people and to play their fullest role meeting the needs of our most vulnerable people we need a support package for the sector. Over the next 12 weeks charities will lose £4 billion in vital income that they would have received from the British public, at the same time as a 42% surge in demand for their services. They need urgent help to maintain and expand their services.”

A survey into the impact of the coronavirus on UK charities revealed that almost half (48%) of those surveyed have seen a decline in voluntary income since the outbreak began, with 43% reporting an increase in demand for their services. 

Carried out by the Institute of Fundraising in partnership with the Charity Finance Group and National Council for Voluntary Organisations, the survey findings  includes data from over 500 charities on the impact of the crisis on their organisations.

Analysed by PwC, the data shows that charities report a projected loss of 48% to their voluntary income, wiping a third from their total income. 91% have already or expect to have their cash flow disrupted, with 62% indicating that these would result in reduced charitable activity.

Many charities will need to close without urgent government help, the survey found. In fact, just over half – 52% – have already reduced existing or previous levels of service, and another 12% say they intend to do so in the future.

The majority, 83%, say that the most important thing for their organisation’s sustainability over the next 3 to 6 months is access to emergency grant funding.

84% of charities think their organisation could play a role in responding to the coronavirus outbreak, but the majority say government funding is needed to help them to do so. 

Caron Bradshaw, chief executive of Charity Finance Group, also commented, saying:

“We have encouraged charities to diversify their funding models over the years and retain reserves on a risk basis. But this situation is unprecedented in attacking every area of charity income, whilst increasing demand and costs, and is rapidly burning through reserves.  If the government doesn’t act now then the longer term impact on the economy, society and social well being will be devastating and almost impossible to recover from.”

An earlier study by the Small Charities Coalition into the impact of the coronavirus on small UK charities found that just one in five are currently able to provide a normal level of service, with half having already lost funding.

It also found that 70% expect to only be able to meet payroll costs for a maximum of six months without a support package from the government.