Charities Hit Hard by Cuts

  • Nearly half of charities say they are being forced to dip into reserves, with one in three say they fear being forced to cut services or jobs, according to the survey commissioned by the Charities Aid Foundation (CAF).

     Dave's Charity ArmJohn Low, chief executive of CAF, says public spending cuts and increased demand for services is having a poor effect on many charities with one in six charities finding public spending cuts and falling donations may force them to close next year.

    252 senior workers in charities of all sizes were surveyed between 18 September 2012 and 1 November 2012.

    Nearly half of the executives surveyed said they were using reserves to cover income shortfalls in the past 12 months and more than a quarter said they had cut front-line services, with one in four making staff cuts.

    The survey has found:

    • 17% said it was likely that their charity may face closure in the next 12 months
    • 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

    CAF has launched a new campaign last month with the NCVO called Back Britain's Charities, to urge the government, businesses and individuals to get behind charities. So far, more than 1,300 organisations and individuals have signed up to the campaign.

    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 minister for International Development, Lynne Featherstone, said that charities needed to be imaginative in seeking new sources of funding:

    Charity is amazing but I think it also got too used to Government being the only funder. Organisations needed to be more “active” and look for “other funders to step in perhaps where Government couldn’t do everything.

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