One in five Scottish charities facing 'critical threat', survey by regulator shows

One in five charities in Scotland are facing a critical threat to their finances and will be unable to operate at some point over the next 12 months as a result of the coronavirus crisis, a major new survey shows.

A survey of almost 5,000 charities by the Office of the Scottish Charity Regulator found that one in five would be unable to do what they were set up to do within a year.

Lost income from fundraising is affecting slightly more than half of organisations and lost income from other sources such as trading is affecting 42 per cent of respondents.

The survey found that more than a third (36 per cent) of organisations said they had temporarily stopped operating, a quarter had applied for emergency funding, and almost a fifth had furloughed staff. 

Almost a half of organisations said they had switched to providing support over the phone or digitally.

Louise Meikleham, policy and research engagement manager at the OSCR, said that while the overall results were startling, it was not an equal picture.

Smaller charities were much more likely to have stopped operating (45 per cent of those with annual incomes of below £25,000) than larger organisations (19 per cent income of those with annual incomes of more than £100,000).

But the critical threat to financial viability over the next year was stronger in charities with more than 11 employees and those with annual incomes of more than £100,000. 

Lost income from trading and other sources was significantly higher for larger charities, affecting more than 60 per cent of charities with annual incomes of more than £100,000.

Additionally, a higher proportion of sports and recreation charities (56 per cent), and charities working in culture and the arts (48 per cent) have stopped operations compared with those working in other areas. 

Meikleham said the regulator was planning another survey towards the end of the year to look into other areas including the impact on beneficiaries, and the support the Scottish sector needs over the next six to 12 months.

“While charities are finding new ways to operate and share their experiences, we are also adjusting. These findings have created new priorities for OSCR. We are considering the partnerships and data that we need to support the sustainability and long-term resilience of the Scottish charity sector,” said Meikleham.

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