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Financial sustainability Coronavirus

Winter fundraising chill heralds more charity cuts

CFG's new joint research shows that winter income drop is likely to amount to at least £200million.

The cancellation of winter events and the closure of charity shops across the country drove a steep drop in fundraising income for charities over the final months of 2020, according to a survey by Pro Bono Economics (PBE) conducted in partnership with Charity Finance Group and the Chartered Institute of Fundraising.

Small charities found raising money over the Christmas period particularly tough, with one in five (20%) reporting that their incomes during November and December last year were less than half what they would expect pre-pandemic. Overall, almost half (46%) of charities raised less over the final two months than they did over the same time period in 2019.

PBE estimates that this loss is likely to amount to at least £200million. This latest blow to charity finances has left many organisations in the sector warning further cuts to both jobs and services are imminent. A quarter (25%) of charities that experienced income drops over the festive period say additional cost-saving measures will be required in the coming months, with the same proportion (27%) saying it means they’ll be less sustainable in the long-term.

One in five (19%) charities that reported a drop in income over November and December say they are expecting to have to reduce their staff numbers in the months ahead. Previous research has indicated that frontline service roles are some of the most likely to be lost, and current PBE estimates are that 60,000 jobs will be lost from the charity sector over the course of the pandemic.

It is inevitable that further cuts will affect how much help can be given to people who rely on charity services, with economists labelling the present situation a ‘capacity crunch’, where need is outweighed by provision. 42% of charities say they are going to have difficulty meeting demand for their services over the coming months.

Social distancing and lockdown measures have been key drivers of the funding loss charities have experienced over the winter period. 28% of charities say they raised less from their fundraising events in November-December last year than usual, and 26% say they raised less from their retail activities.

Caron Bradshaw, CEO of Charity Finance Group said:

“Twice as many charities have seen their income decrease than increase, and the magnitude of the losses are much larger than the modest welcome gains. The further cuts to staff and services reported represent losses of capacity and activity at a time when demand and need continues to soar and when government relies on our sector to help combat the crisis. The elongated nature of this crisis sees charities’ financial resilience put on a much longer road to recovery while need continues to increase. We must remember that this is not about individual charities and social enterprises surviving or thriving. It is about the overall ability of civil society to meet need. At the upcoming Budget, the Chancellor must deliver measures tailored to the sector to reflect the urgent need to support delivery.”

Anoushka Kenley, Research and Policy Director at Pro Bono Economics, said:

“Months of stunted fundraising and depleted reserves have taken their toll on the charity sector. With these figures indicating another income loss in the region of the hundreds of millions, it is only a matter of time before we see more reports of service cuts and job losses for this sector, which is a vital source of services and support for the vulnerable. The Christmas period is a crucial one for charities, and while the public has been generous, donations haven’t made up for the drops in income from fundraising and sales of cards and clothes. After almost a year in crisis mode and with a capacity crunch underway, getting additional resources into this vital sector has to be a priority for the Chancellor as the Budget approaches.”


Peter Lewis, CEO of the Chartered Institute of Fundraising said:

“The necessary public health lockdown measures continue to have a significant impact on charity services and activities that so many people rely on. While the public have responded generously to the fundraising that has been able to take place, this income is much reduced from previous years due to the limited opportunity to trade and fundraise as normal. Further support must now come - Government needs to take action now and raise the Gift Aid level from 20% to 25% which will both incentivise further donations and keep vital services running.”

Read the report here

 

Key findings:

Table 1. “How much total income did you raise in November and December 2020, compared to the same period last year? (this includes all income streams)”

 

Total

Smaller (<£500k)

Larger (£500k+)

Over 50% less

12%

20%

6%

26-50% less

12%

10%

13%

1-25% less

22%

18%

25%

Total proportion seeing decrease

46%

47%

45%

About the same

15%

16%

15%

1-25% more

14%

16%

13%

26-50% more

3%

2%

4%

Over 50% more

8%

10%

8%

Total proportion seeing increase

26%

29%

24%

Don't know

13%

8%

16%

Note: Figures may not sum due to rounding
Source: PBE survey, 11-18 January 2021. n = 248 of which 156 larger charities (pre-Covid annual income of £500k+) and 91 smaller (pre-Covid annual income of <£500k)

Table 2. “If you raised less income in November and December 2020 compared to last year, what impact do you expect this to have on your organisation?”

 

Total

Smaller (<£500k)

Larger (£500k+)

No impact

10%

13%

8%

Difficulty meeting demand in coming months

15%

19%

12%

Reducing staffing numbers (temporarily or permanently)

19%

10%

24%

Require additional cost-saving measures

25%

15%

29%

Less sustainable in the long-term

27%

22%

30%

We did not raise less income this year compared to last year

37%

37%

37%

Seeking additional funding this year

39%

37%

40%

Note: Figures may not sum due to rounding
Source: PBE survey, 11-18 January 2021. n = 248 of which 156 larger charities (pre-Covid annual income of £500k+) and 91 smaller (pre-Covid annual income of <£500k)

Table 3. “How much did you raise in November and December 2020 in the following activities compared to last year?”

 

Retail (including charity shops and online retail)

Christmas/Winter fundraising events

Christmas/Winter fundraising appeals

Over 50% less

15%

17%

8%

26-50% less

6%

5%

2%

1-25% less

5%

5%

6%

Total proportion seeing decrease

26%

28%

16%

About the same

4%

5%

9%

1-25% more

2%

3%

12%

26-50% more

1%

2%

5%

Over 50% more

1%

0%

4%

Total proportion seeing increase

4%

 

5%

 

21%

 

Don’t know

4%

2%

3%

Note: Figures may not sum due to rounding
Source: PBE survey, 11-18 January 2021. n = 248 of which 156 larger charities (pre-Covid annual income of £500k+) and 91 smaller (pre-Covid annual income of <£500k)

 

Table 4. “What do you expect to happen to demand for your services over the first quarter of 2021, compared to the last quarter of 2020?”

 

Total

Smaller (<£500k)

Larger (£500k+)

Increased demand for services – but we have the capacity to meet it

29%

24%

33%

Increased demand for services – and we will not have capacity to meet it

30%

37%

26%

No change in demand for services - but our delivery capacity will decline

12%

11%

13%

Decrease in demand for services

13%

12%

14%

No impact

10%

12%

10%

Don’t know

4%

3%

5%

Note: Figures may not sum due to rounding.
Source: PBE survey, 11-18 January 2021. n = 248 of which 156 larger charities (pre-Covid annual income of £500k+) and 91 smaller (pre-Covid annual income of <£500k)

 

To find out more about this latest research, or arrange an interview with Caron Bradshaw, please email Emma Abbott, Communications Manager, CFG.

 

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