Charities face £12.4bn income shortfall this year, survey indicates

Conducted by the Institute of Fundraising, the NCVO and the Charity Finance Group, the survey found that the sector expects income to fall by 24 per cent

Coronavirus has had its financial impact (Photograph: Polly Thomas/Getty Images)
Coronavirus has had its financial impact (Photograph: Polly Thomas/Getty Images)

Charities are facing a £12.4bn shortfall in income for the year because of coronavirus, new figures show.

A survey by three major charity umbrella bodies has found that organisations expect to see a reduction of 24 per cent in income for the year.

The survey, conducted by the Institute of Fundraising, the National Council for Voluntary Organisations and the Charity Finance Group, and involving more than 200 charities, reveals that charities are facing a huge predicted loss to their income as they continue to grapple with the impact of the coronavirus pandemic.

Figures from the survey show that charities reported 29 per cent less income than they had budgeted for between lockdown starting on 23 March and 12 May. 

And 92 per cent of the charities surveyed reported a fall in trading income over the same period. 

The respondents said they expected both trading and voluntary income to fall, by 57 and 42 per cent respectively.

To mitigate the impacts caused by the loss of income, more than 75 per cent of the respondents said they had or were planning to use the government’s Coronavirus Job Retention Scheme. 

But 61 per cent of those charities using the scheme said they would not be able to afford to bring back all their furloughed staff into existing roles.

Peter Lewis, chief executive of the Institute of Fundraising, called on the government to “urgently review and enhance its emergency support for charities”, including a bespoke package of support and an extension to the Job Retention Scheme 

He said: “This new research shows that the impact of coronavirus is going to have a hugely significant impact on charity finances for the year ahead. The fact that the charities that responded to the survey are planning for a loss of almost a quarter of their total income is extremely worrying.”

Caron Bradshaw, chief executive of the Charity Finance Group, said: “Charities are telling us that they are planning for a substantial decline to their incomes for the year ahead, at a time when the need for their services has never been more acute.

“This isn’t about the survival of the institution of charity or individual charities, but the devastating impact that this will have on those who rely on the services charities provide.

“It’s not about us – it’s about them. Failing to invest in us now will be a false economy and will let those most marginalised and disadvantaged shoulder the greatest fallout from this crisis.”

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