Most charities 'experiencing falling donations and worsened cash flow'

A survey by Acevo, in partnership with the Centre for Mental Health, finds that the financial health of the sector is worse than that of manufacturing, which is at an all-time low

(Photograph: Alex Livesey-Danehouse/Getty Images)
(Photograph: Alex Livesey-Danehouse/Getty Images)

Seven out of 10 charities say donations and new business have fallen in the past month, and nearly six out 10 say cash flow has worsened, a survey by the charity leaders body Acevo has found.

The new poll, which was carried out in partnership with the Centre for Mental Health, also revealed that the financial health of the charity sector was worse than that of the manufacturing sector, which is at an all-time low.

Acevo asked 174 members whether they felt new business and donation income, cash flow, the number of full-time equivalent employees, reserves and spending on front-line service delivery had improved or worsened during April.

Seventy per cent of respondents said new business and donation income had fallen, while 59 per cent said they felt cash flow had deteriorated and 61 per cent said their reserve levels had fallen.

Meanwhile, half of charities said spending on front-line services had stayed the same, 76 per cent said staffing levels had stayed the same and 19 per cent said they had worsened.

Acevo has combined the responses to the five measures to produce a charity health check, a composite score designed to give an impression of the financial health of the charity sector, where a score of more than 50 out of 100 would suggest it has improved over the past month, whereas a score below 50 suggests it has worsened.

The measure for April was 30.8. By comparison, the manufacturing sector’s score for the same period was 32.5, a record low for that sector.

A spokeswoman for Acevo said the body planned to repeat the survey every month for the next one or two years, to give an indication of overall trends within the sector.

Vicky Browning, chief executive of Acevo, said: “As we navigate the worst impacts of the outbreak, charities and the essential support they provide is never more needed.

“I have spoken to members who are doing whatever they can to continue to provide services while income has fallen off the edge of a cliff.

“The Charity Health Check findings echo this. Charities are experiencing a reduction in cash flow and reserves while maintaining or increasing front-line services.

“This is not sustainable in the long term and demonstrates why further government support is urgently needed if we are to build back better.”

Nick O’Shea, chief economist at the Centre for Mental Health, said the Charity Health Check painted “a worrying picture of the sector’s position” and its prospects in the near future.

“Our analysis of the results suggests that charities across the country are continuing to deliver much-needed help to people during the crisis while facing an uncertain future with diminishing resources,” he said.

“From an economic standpoint, this is unsustainable. A rapid financial response is needed to prevent vital support disappearing from people’s lives when they need it the most.”

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