Forty-seven per cent of charities say they will have to dip into their reserves to support their activities over the next year, according to the fifth annual Managing in a Downturn report released today by the Charity Finance Group, the Institute of Fundraising and the financial services firm PwC.
The report, which surveyed 488 members of the CFG and the IoF in October and November last year, found that 17 per cent said they would cut back on services.
It found that 93 per cent of fundraisers said the fundraising environment had got tougher in the last 12 months, and 94 per cent said they expected the environment to become even worse over the next 12 months.
Twenty per cent of charities said they were considering a merger, up from 12 per cent in the previous year’s survey.
Among respondents, 28 per cent were considering making further redundancies, 36 per cent were considering a pay freeze and 21 per cent were planning to reduce staff hours.
In addition, 63 per cent said they had been hit by government spending policies. Only 5 per cent said that government policies had had a positive impact, with the rest saying it had not had an effect.
"What absolutely emerged from the responses was that the sector was in the middle of a major-reshaping", said Ian Oakley-Smith, a director at PwC. "The energy and capabilities of charities are being pushed to the limit as they look to survive.
"And of course now it would be fair to say there is uncertainty around what hand government might deal next."