Pandemic causes one in four small Scottish charities to stop operating, research finds

More than one in four small Scottish charities have stopped operating as a result of the coronavirus pandemic, according to new research.

The Office of the Scottish Charity Regulator canvassed more than 2,500 charities in November for its latest Covid-19 impact survey.

It found that nearly one in five charities had suspended all operations, but this figure rose to more than one in four organisations with annual incomes of less than £25,000.

Meanwhile, fewer than one in 20 charities with an annual income of £100,000 or more had suspended all operations.

About two-fifths of all charities had suspended some operations, the survey found, although this rose to half of charities with annual incomes of £100,000 or more.

A study published in August last year found that one in five charities would not be able to operate at some point in the next 12 months.

The OSCR found that of the one-third of charities that reported a disruption in services to beneficiaries, 54 per cent had 11 or more employees, half were mental health charities, and just under half were social care charities working with older people and people with disabilities.

Four out of five charities that received income from donations and fundraising have reported a decrease in their income, with those established more than 50 years ago and religious charities most affected.

Similarly, over four out of five charities that were reliant on trading income have reported a decrease from this income during the pandemic.

A total of 88 per cent of arts and culture, and sports and recreation charities reported lost income from trading.

More than four-fifths of charities said their financial viability was under threat in the next two years, and 12 per cent of respondents described this threat as critical.

This figure rises to 18 per cent for mental health charities and social care charities working with children and families.

In a blog post on the Scottish regulator’s website, chief executive Maureen Mallon said: “Our research shows that many now face significant financial challenges if they’re to continue this essential work when we start to rebuild and recover in 2021.

“I hope that by releasing the full data from our research, sector leaders and policymakers can begin to take the steps required to ensure a more stable future for this vital sector.”

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