Almost half of charities have scaled back financial forecasts in past two months, research finds

Almost half of UK charities have revised down their financial forecasts over the past two months, latest figures show

The Covid Charity Tracker, which is conducted monthly by Pro Bono Economics in partnership with the Charity Finance Group and the Chartered Institute of Fundraising, also showed that more than half of charities say demand for services might outstrip their ability to deliver.

The findings were described as “deeply troubling” by Caron Bradshaw, chief executive of the Charity Finance Group.

“Our capacity to deliver for both the short and long term is shrinking fast at a time it is never more needed,” she said.

“We are calling on government to take action now to address the fragility of the organisations working at the heart of our communities.”

A total of 224 charities took part in the survey between 15 and 20 September, shortly before Chancellor Rishi Sunak announced new measures to support the economy.

Forty-seven per cent of respondents said they had revised down their financial forecasts since July. The figure rose to 58 per cent for small charities.

Just 22 per cent said they had revised upwards forecast income.

Fifty-five per cent expressed concerns about being able to meet demand for services if there are more localised lockdowns in the next three months.

Sixty-eight per cent said they had applied for financial help from government and 29 per cent had made staff redundant. Just six per cent said they had not faced financial challenges as a result of Covid. 

Asked which functions in their organisation were suffering job losses, the highest response was for service delivery, which 32 per cent selected. The next highest, at 15 per cent, was fundraising. 

Matt Whittaker, chief executive of Pro Bono Economics, said charities were yet to see the light at the end of the tunnel. 

He said: “The updated jobs support package set out by the Chancellor yesterday will likely provide some relief for the sector, but against a backdrop of an economic recession and the looming tightening of lockdown, for many organisations it will do little to square the circle of rising demand for help and shrinking capacity – with very serious consequences for all of us.”

Peter Lewis, chief executive of the Chartered Institute of Fundraising, said: “Tragically, many fundraisers are facing redundancy as their organisations are forced to make incredibly difficult decisions.

"Politicians and policymakers need to act now to safeguard vital charity-delivered services and activities around the UK.”

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