Small charities are being urged to act now to ensure their survival after a second survey this week revealed flat levels of income.
The report Taking the Pulse of the Small Charity Sector says voluntary income for charities with maximum annual turnovers of £1.5m has risen by just 1 per cent since June 2013. Demand for services has increased by 91 per cent over the same period.
The FSI, a charity that supports small charities, published the report two days after the Charities Aid Foundation launched UK Giving 2017, which said people in the UK gave £9.7m in 2016, compared with £9.6m in 2015.
Pauline Broomhead, chief executive of the FSI, said the findings in the two documents suggested income was flat-lining and "a ceiling in giving might have been reached".
She added: "The work of small charities is vital and, if they are to continue to exist, it is imperative that trustees are investing in the skills of their staff and volunteers and looking at potential collaborations or mergers with each other."
Broomhead said there had been a real increase in the number of charities considering mergers, with 22 per cent looking into it over the past year.
The perilous state of many organisations is highlighted in the report, which shows that 20 per cent of small charities don’t hold any reserves and 38 per cent of those that do had dipped into them during the three months from December 2016 to February this year.
The FSI has published the Small Charity Index quarterly since 2013. The results are based on consultations and surveys with more than 2,000 small charities each year.