Charities 'fear closure' due to cuts and donation fall


Hannah Terrey from CAF: "Many charities are now very worried"

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One in six UK charities questioned for a survey say they fear they may have to close in 2013 due to public spending cuts and falling donations, the Charities Aid Foundation has said.

The poll of 252 senior charity workers also found just under half of their organisations have been forced to dip into reserves to stay afloat.

Over a third have said they may be forced to cut services or jobs.

The Cabinet Office said the charity sector "cannot be immune from cuts".

There are more than 160,000 charities in the UK.

Almost all of the 252 charities questioned for the CAF said generating more income was going to be their greatest challenge in the coming year.

Hannah Terrey from CAF said it was small and medium-sized charities, rather than large ones, which were feeling the pressure.

"Those [are the ones] that are in your local community doing vital things, providing social care, hospices, working with children and vulnerable young people - they may be the ones that are feeling the effects now."

The survey was completed online by charities of differing sizes by polling group Research Now.

Start Quote

Many organisations are having to dip into their reserves, cut vital frontline services and some are even concerned about whether they can survive in these toughest of times.”

End Quote John Low Charities Aid Foundation
  • Some 40% of those questioned worry that they will be forced to close if the economic situation does not improve
  • A quarter have already been forced to cut frontline services and staff
  • About 80% believe that the economic situation is the greatest threat to UK charities
  • Nearly three-quarters believe that charities are unable to fulfil their goals because of reductions in donations or government funding

The foundation is calling on the public to support charities through regular giving, regardless of how much time or money people can give.

Ms Terrie said said CAF and the National Council for Voluntary Organisations were urging charities to consider ways in which they can share resources and do things as efficiently as possible "to make the money that [they] do have... go as far as possible".

CAF is also lobbying the government to modernise and promote the Gift Aid scheme and payroll giving, so donations go further.

The Gift Aid scheme is for gifts of money by individuals who pay UK tax, and allows the charity to reclaim the basic rate tax on the donation.

John Low, chief executive of CAF, said tough economic times meant the public had less money to donate to charities.

He added: "This combined with significant public spending cuts and increased demand for charity services is having a shocking effect on many charities, calling into question their very viability.

"Many organisations are having to dip into their reserves, cut vital frontline services and some are even concerned about whether they can survive in these toughest of times.

"Charities of all sizes play an essential role in our society, providing social care and education as well as helping some of the most vulnerable people in our communities."

Investment help

A report last month found that donations to charity have fallen by 20% in real terms in the past year, with £1.7bn less being given.

The number of people donating also fell - as did the amounts they gave, from an average of £11 to £10 a month.

A Cabinet Office spokesman said "We know it is a very challenging environment for charities, especially for those previously dependent on taxpayer funding, but the sector cannot be immune from cuts."

The spokesman said the government was "committed to strengthening the sector through programmes such as the £10m Investment and Contract Readiness fund and the £65m Advice Services Transition Fund".

"We have introduced new ways for the sector to finance itself through Big Society Capital, capitalised with £600m, giving charities access to affordable loans and investment to grow, so they can do more," he added.


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  • rate this

    Comment number 195.

    So charities along with the rest of us are having to watch their pennies in these difficult times. Most of us have had to deal with cuts in income of around 20% since 2008 and survived, charities must do the same. Cut executives pay, sell off assets, cut staff numbers and run a more efficient enterprise. Recruit donors directly, instead of paying marketing companies £150 per donor signed up.

  • rate this

    Comment number 194.

    the national lottery awards a great use of money for good causes big champagne swilling event to say how good the people who distribute a proportion of this gambling money are oh presented by an American and now owned by Canada

  • rate this

    Comment number 193.

    Charity begins at home!

  • rate this

    Comment number 192.

    members of the public (HYS) shouldn't need to be commenting on this very serious matter_ it should be ministers_ and specifically those who expounded the idea of a 'Big Society'

    unless of course that idea was just another attempt to distract us while funding was leached away from those in need

  • Comment number 191.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 190.

    Well ofcourse the RNLI would be better off if VAT as waived on its purchases. However due to Brussels this is not posible and from all VAT Brussels takes a cut which is why after it is imposed it can never be removed. VAT on gas and electricity being a case in point.

  • rate this

    Comment number 189.

    Donations to large charitites goes only partly to help the objects. There are administration costs which have to be covered.
    They need to use legal and accountancy firms which do it for profit.
    They need to employ people - c/f the volunteers they rely on to raise funds.
    Charities should suffer in a recession - they are not imune.
    The UK has an ethos of voluntary charitable work - unlike abroad

  • rate this

    Comment number 188.

    @Kingfisherphil 145- oh, this is such an excellent idea! I suppose we could all pull it of for the price of setting an altar in the corner of the living room and informing the council to that effect. Saving a grand or two per year can't be bad!

  • rate this

    Comment number 187.

    Welcome to caring conservatism. Charities depend on donations from ordinary people. Wages are falling in real terms, and many people are struggling to make ends meet. The rich not only avoid paying tax, they don't give to charities either. The Tories are cutting local services, cutting grants, and expecting charities to fill the gaps with less. Cameron's big society sounds good but means nothing.

  • rate this

    Comment number 186.

    I have worked for a few very large commercial global organisations, and also in the Charity sector. The Charity sectors still seem to operate with a cottage industry mentatlity, very well meaning but will not really embrace "Best Practice" when it come to operating model.

    The answer is in front of them, "if" they worked together.
    They could reduce costs, and improve the services.

  • rate this

    Comment number 185.

    We need another general election soon before they completely ruin this country...
    But they've changed the rules so we are effectively powerless to get rid of them until 2015..... Looks like the Egyptians have been learning a thing or two from Dave and his cronies...

  • rate this

    Comment number 184.

    How many charities have their bases in London?
    In this day and age overhead costs could easily be cut if they moved to cheaper offices in other parts of the country, surely?

  • rate this

    Comment number 183.

    Live within your means. That includes charities. If we stopped giving corrupt "aid" to other countries then some of that saving could be given to WORTHY causes. How about some of the grossly over paid chief executives of charities actually practising what they preach. So-called charities should get out of prime location offices. Has anyone seen the luxury offices of the Salvation Army in London

  • rate this

    Comment number 182.

    176. family guy

    It is not sustainable, especially for larger charities, to be able to depend purely on volunteers.

    Some people would be willing to volunteer for front line services, but you would struggle to find many people willing to volunteer in a finance or IT department.

    People need to earn a living. Unfortunately voluntary work can not meet this need.

  • rate this

    Comment number 181.

    Why does charity exist in a "civilised" society?

  • rate this

    Comment number 180.

    @jumbolumbo (30)

    By definition charity is doing things that are charitable in nature such as education, relief of poverty or promoting religion. While recently modified to add a requirement to show that "public benefit" is being provided the underlying principle in unchanged.

    The source of funds to do that are utterly irrelevant. Almost all universities are charities for example.

  • rate this

    Comment number 179.

    While all charities should not be tarred with the same brush, there is room for performance related improvements in many areas.
    Example: take those involved in collecting for & funding research into serious medical problems afflicting mankind on a global scale. In Britain it appears that as with much else, they no longer feel the need to listen to outside opinion - it's all down to genes now!

  • rate this

    Comment number 178.

    It seems to me that in the UK, if you wish to have a decent income, with very little effort, then you should set up and manage your own charity for some vague cause. The vast majority of cons ...err....charities in this country have been so formed.

  • rate this

    Comment number 177.

    People are breaking in to The Salvation Army buildings,to rob the charitable donations around here.What does that say,about the state of the nation..

  • rate this

    Comment number 176.

    No one should be employed and paid by a charity... The clue is in the word "charity"


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