Charity finance directors have sounded a warning about financial prospects following the failure of the Chancellor to bring in new measures to boost the fiscal health of the sector.
Gordon Brown declined the opportunity in last week's Budget to prolong the advance corporation tax credit for charities, which is due to be abolished next year.
He also made no move on irrecoverable VAT, despite an Early Day Motion in the House of Commons calling for reform with the signatures of 125 MPs.
Les Jones, vice chairman of the Charity Finance Directors' Group and deputy chief executive of WWF-UK, said: "Although the Chancellor may be optimistic about the prospects for the economy, we are not as optimistic about the financial environment for charities.
"The sector is facing a difficult fundraising environment and falling reserves at a time when the stock market has dropped by about 50 per cent since 2000. If house prices fall, legacy income will be hit hard unless we see dramatic increases in the market."
However, the Budget did contain some measures that affected the sector. Brown announced a £1 million Enterprise Promotion Fund for the private and voluntary sectors.
It will fund projects to promote "enterprise awareness" in schools, business and the wider non-business community.
The Chancellor also announced a follow-up to last year's Treasury review on voluntary sector involvement in public services.
A new study will be made on how government departments help the voluntary sector in local public service delivery, and "the potential for going further". It will form part of the Treasury's next spending review.
Brown also confirmed an announcement made last year. From April 2004, self-assessment taxpayers will be able to nominate a charity to receive all or part of any tax rebate. This will be under Gift Aid, provided the donor ticks the appropriate box on their tax return.