Almost half of charities expect to run out of reserves in the next year, research indicates

Almost half of UK charities expect to run out of reserves in the next year, new research indicates. 

A survey of more than 250 charities commissioned by the insurers Ecclesiastical and carried out by YouGov found that 12 per cent of respondents said they expected to run out of financial reserves in the next three months. 

A further 17 per cent said they thought the their reserves would be gone within the next six months, while another 20 per cent said this would be the case in the next year. 

The Charity Finance Group said the figures showed that “so many charities are at breaking point”. 

The research, which was conducted in July and August, found that 55 per cent of charities said they were concerned about a loss of funding. 

It also found that 83 per cent had moved to digital methods of working to cope with the coronavirus pandemic, while 52 per cent had used measures such as social distancing to continue their services. 

The figures come after research into the accounts of about 12,700 charities in England and Wales found that one in five had less than one month's spending in reserve.

Angus Roy, niche director for charity at Ecclesiastical, said: “Charities have become used to dealing with challenges, but this year has given us a perfect storm of a loss of funding through fundraising activities, a reduction in giving from corporate partners, as well as the general public, and an increase in need has left many charities at crisis point.”

Richard Sagar, policy manager at the CFG, said: “This research helpfully highlights what many in the sector will already know – that so many charities are at breaking point, struggling to provide support for the most disadvantaged in our society at a time when that support is never more needed.”

“But it also points to positive signs: that so many charities have adapted the way they work, to better support those most in need.

"However, even with the flexibility and resilience they have shown, additional financial support will be crucial if we want to ‘build back better’ after this crisis.”

Ecclesiastical is due to publish the full findings from its research next month. 

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