Half of charities are using reserves to counter recession

Charities Aid Foundation poll shows 41 per cent are operating on less income than they had budgeted for

More than half of charities affected by the recession have dipped into their reserves, according to a survey by the Charities Aid Foundation.

The online survey of 322 voluntary organisations painted a bleak picture of a sector struggling to cope with the economic downturn.

A total of 41 per cent said they had received less funding in the past three months than they had budgeted for. Of these, 60 per cent had used their reserves to meet the shortfall.

Corporate income has been particularly badly affected: 41 per cent of charities said they had received less than they had budgeted for. None said they had received more.

Half of all charities are expecting total income to decline over the next 12 months.

John Low, chief executive of CAF, said the modest assistance offered yesterday by the Government's third sector action plan, which pledged £42.5m to help the voluntary sector through the recession, would help.

"It is most welcome that government is now offering practical and well directed help to charities and social enterprises," he said.

"Our latest survey clearly shows a rapid increase in demand for charities' services and government needs to do all it can to ensure that any help is given quickly and effectively."

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