Charities are facing imminent collapse as fundraising income dries up, charity leaders have warned, and many will not survive without more government help.
Charities have been in conversation with the government about a package of support for the charity sector, but warned on Friday, 21 March, that without an urgent injection of money many charities of all sizes would start to close their doors as soon as this week.
Charity sector bodies have made initial estimates that charities will miss out on a minimum of £4.3bn of income over the coming 12 weeks with charity shops closed, fundraising events and activity cancelled, reserves depleted, and demand for services increasing. Many also face increased costs as part of their role in tackling the outbreak.
Charities have asked for commitments from the government including:
o Emergency funding for frontline charities and volunteers supporting the response to the coronavirus crisis, especially where they are alleviating pressure on the health service or providing support to people suffering from the economic and social impact of coronavirus.
o A ‘stabilisation fund’ for all charities to help them stay afloat, pay staff and continue operating during the course of the pandemic, and
o Confirmation that charities should be eligible for similar business interruption measures announced by the chancellor for businesses.
Meanwhile, early findings from the State of the Sector 2020 report by charity think tank New Philanthropy Capital (NPC) suggests that charities and public services are more vulnerable to Covid-19 crisis than is currently understood.
54% of the charities NPC surveyed delivered public sector contracts and 59% of these said they are cross subsidising that contract with money from other sources such as fundraising. And, it found, as fundraising, trading, or investment income fall – with NCVO reporting charities are set to lose more than £4bn over 12 weeks as a result of the coronavirus outbreak – charities will not be able to afford to cross subsidise these contracts.
This, the research suggests, may mean they are unable to deliver them, and vital services fail, or government funding is placed under more pressure as it has to find a short notice new provider. Other key finding from the research were:
o Charity leaders reported doing more in almost every area than 2017 and so may have been spread thinly when the coronavirus crisis hit. For example, in 2017 83% of charities said they were delivering services or products. In 2019/20 this rose to 89%.
o Less than half (47%) of charities believed that independent funders offered the flexible core funding which NPC expects will be vital to keeping them afloat in the crisis, and
o Charities’ confidence on their ability to use digital technology has dropped by 11 percentage points to 59% from 70% since 2017. This may leave them struggling to shift services online to reach isolated people during quarantine and social isolation.
Source: UK Fundraising.