Fears grow over statutory income for charities

Latest Managing in a Downturn survey finds nearly half of respondents suffered falls in income

Almost half of charities suffered a fall in income between May and November 2009, according to a report published today.

Managing in a Downturn, a half-yearly survey of members of the Charity Finance Directors' Group and the Institute of Fundraising, and produced with accountants PricewaterhouseCoopers, found that income fell in 49.5 per cent of organisations.

This was, however, better than predictions in the previous report in July last year, when 56 per cent of respondents said they expected a fall.

In the latest report, 29 per cent said incomes were up - 11 percentage points higher than predicted in July.

Forty-two per cent of the 181 respondents said they expected income to fall further in the next six months; 27 per cent expected it to increase.

Sixty-eight per cent of respondents said they expected wage bills to rise.

Ian Oakley-Smith, a director at PwC and one of the authors of the report, said charities were generally becoming less pessimistic about the future, but their fears over statutory income had increased sharply.

"Six months ago, 36 per cent of charities expected a decline in statutory income, and only 22 per cent have seen it drop," he said.

"But 56 per cent of charities now expect statutory income to decline in the next six months."

He said the survey showed charities had been affected by the recession later than most other sectors of the economy, and would face challenges in 2010 and possibly beyond.

"But the survey reinforces the message that well-managed charities will see more opportunities to strengthen their activities," he added.

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