Community groups in England have experienced a fall in their total income of about 8 per cent over the past year, according to a membership survey by Locality.
The membership body estimates that income among Locality’s members – made up of 461 community organisations – was down to £297m in 2012, compared with £325m in 2011.
The figures are based on responses to a survey of 218 Locality members carried out in September.
The number of staff employed also fell last year, with members collectively employing an estimated 5,000 people, which is 5 per cent down on the previous year.
Thirty-six per cent of members had been forced to make redundancies in the past year, with 80 per cent losing up to five staff. Funding cuts, the end of contracts and restructuring because of financial difficulties were cited as the main reasons for the job losses.
When asked about their future financial stability, 61 per cent of respondents said that the risks were manageable, 35 per cent said that they faced significant financial risks and 4 per cent said they faced possible closure.
The study also showed a significant increase in the number of people volunteering for community groups. An estimated 23,000 volunteers supported Locality’s members last year, which represents an increase of 24 per cent on 2011.
Steve Wyler, chief executive of Locality, said: "These figures demonstrate that the cuts are already biting deeply, with a third of our members forced to make redundancies last year – indeed, two out of every five community organisations in our network report significant risks to their future viability."
"Despite this, our movement is demonstrating incredible dedication and determination. The massive increase in volunteering is a tribute to the ability of these community organisations to mobilise people in adversity. Moreover, even modest trading surpluses in bleak economic times are a tribute to the entrepreneurial can-do culture within Locality’s membership."