Results from the Charity Confidence Survey, a quarterly poll of 120 chief executives, show that confidence in the financial health of the voluntary sector has dropped by 21 percentage points since the survey was last conducted three months ago - 78 per cent of respondents in the most recent survey said they thought that the sector economy will get worse in the coming year.
However, most respondents were positive about their own charities: 52 per cent said they expected their own situations to improve in the next 12 months and 59 per cent said they planned to increase expenditure.
Confidence in the wider economy has fallen by 16 percentage points, with more than half of all charities saying it will be the biggest barrier to their success in the next year.
"This shows that charity leaders expect tough times ahead for the sector," said Karl Wilding, head of research at the NCVO. "Most, however, think their charity will be able to weather the storm. And most expect their service delivery to increase despite the difficult economic conditions – perhaps even because of them."
Stuart Etherington, chief executive of the NCVO, said this pessimism was fed by concerns about the impact of Government policies.
"That is why it is critical that government funders demonstrate genuine commitment to implementing the Compact," he said.
The Charity Confidence Survey is a quarterly survey, designed to provide voluntary organisations with information for their planning processes. It can be ordered at the NCVO website.
Meanwhile, the NCVO has established a new commission to look at the state of funding for the whole of the third sector after 2010 (Third Sector Online, 12 June). It is expected to start work in 2009.