Covid-19: charities fear funding cuts as demand for services soars

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The coronavirus pandemic has left charities facing a surge in demand for their services despite grave concerns about funding decreases

31st March 2020 by Gareth Jones 0 Comments

The coronavirus pandemic has left charities facing a surge in demand for their services despite grave concerns about funding decreases.

New research conducted by the Institute of Fundraising (IoF) - in partnership with the Charity Finance Group and National Council for Voluntary Organisations (NCVO) – has seen more than 500 charities quizzed over how the pandemic is affecting them.

Almost half of organisations (43%) surveyed reported an increase in demand for their services but a 48% decline in voluntary income. Those quizzed said they expected to see total income dip by an average of a third and the vast majority (91%) have already or expect to have their cash flow disrupted, with 62% indicating that this would result in reduced charitable activity.

Half (52%) of charities have reduced existing or previous levels of service, with a further 12% intending to in the future and 83% say that the most important thing for their organisation’s sustainability over the coming three to six months is access to emergency grant funding.

Most organisations (84%) think they could play a role in responding to the coronavirus outbreak, with the majority saying that government funding was needed to help them to do so.

Peter Lewis, chief executive of the IoF, said it is vital that support is made available to allow charities to survive.

“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,” he said. “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.”

"The results of the survey reflect the stories we’re hearing from members and the winder sector," said Anna Fowlie, chief executive of the Scottish Council for Voluntary Organisations (SCVO). "Voluntary organisations are facing incredibly difficult decisions in balancing being able to help now whilst still being there to make a difference once the immediate crisis is over. Few organisations have the reserves to be able to survive a prolonged downturn.

"SCVO’s Third Sector Information Hub is updated daily with information on the funding available from government and others to help organisations through the crisis."

Caron Bradshaw, chief executive of Charity Finance Group, said: “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 wellbeing will be devastating and almost impossible to recover from.

Karl Wilding, chief executive of NCVO, said: “These figures reflect the stories we’re hearing every day from our members. Charities are faced with making incredibly difficult decisions about how to ensure their organisations can help now and still be there to make a difference once the crisis is over. Charities run as prudently and efficiently as possible which means few have enough cash stored up to survive a prolonged downturn.”

The findings of the survey, Impact of Covid-19 on the charity sector, are based on responses from over 1,100 respondents from across the sector. There were 558 fully completed responses, and different response rates for each question.

The Scottish Government has created a £20m Third Sector Resilience Fund to help charities through the crisis. The fund will support organisations that already deliver services and products but find themselves in financial difficulties directly as a result of the coronavirus pandemic. The primary intention of the fund is to help voluntary sector organisations to stabilise and manage cash flows over this difficult period.

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