Funding gap will be more than £10bn in next six months, research claims

Gathering responses from 261 civil society organisations, Pro Bono Economics says income will fall by £6.7bn, while demand for services rises by the equivalent of £3.4bn

(Photograph: Wiktor Szymanowicz/NurPhoto via Getty Images)
(Photograph: Wiktor Szymanowicz/NurPhoto via Getty Images)

The UK voluntary sector is expected to face a funding shortfall of more than £10bn over the next six months, new figures indicate.

Research conducted by the charity Pro Bono Economics among 261 civil society organisations found that charities in the UK are expecting income to fall by £6.7bn over the next six months while demand for their services rises by the equivalent of £3.4bn.

Eighty-eight per cent of respondents said they expected their charity’s income to fall over the next six months, while 59 per cent said they would have to significantly reduce their activity in response.

Seventy-two per cent of respondents said they expected demand for their services to increase over the next six months, from which figure Pro Bono Economics calculated the additional £3.4bn of resources it says the sector will need.

But with income expected to fall by £6.7bn over the corresponding period, that makes a funding gap of £10.1bn, according to Pro Bono Economics.

It said that charities with annual incomes of less than £500,000 were particularly exposed to the financial squeeze, with survey results indicating that one in eight of those charities expected to go out of business in the next six months.

Almost two-thirds of those charities said they had significantly reduced their activities because of the effects of the pandemic.

Overall, 12 per cent of charities said they feared they would have to shut down by December.

Ninety per cent of respondents said the pandemic would negatively affect their ability to meet their charitable objectives in the next six months, while 61 per cent said they had furloughed staff.

More than two in five, 42 per cent, said they had accessed their reserves because of the crisis.

Roberta Fusco, director of policy and communications at the Charity Finance Group, but responding on behalf of the #NeverMoreNeeded group of charities that has been calling for more government support for the voluntary sector, said: “The work of charities is never more needed to support people and communities hardest hit by Covid-19.

“Recent research shows that the original projected loss of income to the sector of £4.3bn to May 2020 was largely correct. Set against the government's response to date of £750m, the gap is ever widening and the impact on beneficiaries is felt ever more keenly precisely at a time when charities are needed the most and have the vital services that people need."

The survey results are from a weekly poll carried out by Pro Bono Economics on the effects of the Covid-19 outbreak on UK charities. This survey was conducted on 2 and 3 June.

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