Sector well placed to ride out recession, says NCVO study

Predictions of widespread gloom 'may be exaggerated'

Charities might weather the economic storm better than they expect, according to a paper from the NCVO and the University of Southampton.

In Economic Downturns and the Voluntary Sector: what can we learn from historical evidence?, published this week, NCVO head of research Karl Wilding and Professor John Mohan from the university assess the likely impact of the recession on charities by studying past downturns such as the Great Depression.

The paper claims the sector should be wary of negative forecasts because charities have historically been well equipped to deal with tough economic conditions.

The impact of the recession "will depend as much on the internal management, decision-making and resources of individual charities as on the external environment", the paper says. It says charities have historically created new sources of income during a downturn.
The paper also suggests conditions might prompt a rise in giving to local, community-based organisations, so larger charities will not necessarily fare the best.

Data from the Charity Commission shows there has been a steady increase in the formation of new charitable organisations even during recessions, the paper says.

"Charities should beware of crying wolf," said Mohan. "Inevitably, some types of organisation will suffer more than others, but predictions of widespread gloom may be exaggerated."

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