Round-up: Coronavirus impact on charities
Since the coronavirus pandemic arrived in the UK, the third sector has been impacted significantly with services being postponed and fundraising efforts scaled back. We are starting to see the impact of coronavirus on the sector. Below is a summary of the key research and news stories so far:
There have already been several surveys looking at the impact of coronavirus on charities:
SIDCN carried out a survey asking small charities working overseas (defined here as charities with an income of less than £1 million) about how COVID-19 has impacted them. There were 53 responses. The key findings from the research are:
- 45% of charities working overseas will have to close this year without additional funding.
- 15% of charities working overseas will have to close within six months without additional funding.
- 77% of charities surveyed say that COVID-19 is already affecting their finances in this financial year.
- 59% said they had already or were currently accessing their reserves during the pandemic.
- 72% of charities surveyed said they had an increased demand for their services during the pandemic.
- 57% of charities surveyed said they have had to postpone programmes/projects during the pandemic.
- 66% of charities surveyed say they are responding to COVID-19 directly and a further 23% say they are responding in part.
- 64% of charities have found new ways to deliver services.
- Just 11% of charities say that they have been able continue their work overseas as normal.
Research from the charity paints an alarming picture. The key findings are:
- Nearly half (47%) of London's youth charities and community groups have furloughed staff.
- 78% say they are reaching fewer youngsters than before the crisis.
The organisations received 74 responses to the survey, having asked 37 NEWC members and a further 126 other equine rescues about how the pandemic had affected their organisaitons.
The key findings include:
- 80% of respondents reported that the pandemic had had a negative impact on fundraising.
- Over half of respondents reported that their income had fallen by over 50%
- More than 40% of respondents reported that their organisation had furloughed some of their staff.
- But 62% reported that their organisation were able to continue taking the most urgent animal welfare cases during the pandemic.
In partnership with NCVO, CFG and supported by PwC, we produced a second round of research looking at the impact of the coronavirus crisis so far and the expected impact on charities over the coming year.
On average, charities report that they are expecting a 24% reduction in total income for the year which equates to a £12.4 billion loss in total. During lockdown (between 23rd March and the 12th May)
- Charities received 29% less income than they had budgeted for.
- 84% of charities reported a decrease or a significant decrease in their income.
- 92% of charities reported a fall in trading income during the lockdown with just 5% reporting that income from trading had increased.
Looking at the year ahead the research shows that charities:
- Expect to see their total income significantly reduced, with their total income on average 24% lower than previously forecasted
- Are planning on an average fall of 57% on trading income
- Have revised their voluntary income for the year down by an average 42%
Institute of Fundraising
- Charities are reporting a projected loss of 48% to their voluntary income, and a third wiped off from their total income
- 52% of charities have reduced existing or previous levels of service, with a further 12% intending to in the future.
- 83% say that the most important thing for their organisation’s sustainability over the coming 3 to 6 months is access to emergency grant funding.
- 84% of charities think their organisation could play a role in responding to the coronavirus outbreak, with the majority saying that government funding was needed to help them to do so.
- 91% of charities surveyed have already or expect to have their cash flow disrupted, with 62% indicating that these would result in reduced charitable activity.
- 90% said they expected Covid-19 to have a negative impact on their ability to meet their charity objectives over the next six months, with nearly half (47%) saying they expected it to be a “large” negative.
- 95% said they expected Covid-19 to reduce their income over the coming six months relative to previous plans. 40% said they expected a reduction of up to 25%; 27% thought their income would be 25% to 50% lower; 18% thought the drop would be 50% to 75%; and 10% said they expected income to be down on previous plans by more than 75%.
- 64% said they’d reduced their activity in a “significant” way.
- When asked to rate the sufficiency of the government’s financial support for civil society in the face of Covid-19 (where 1 = entirely insufficient and 10 = entirely sufficient), the average score across all respondents was 4.4. 71% scored the response at five or below, with 43% scoring it 1-3 and 8% scoring it 8-10.
- One-in-ten said they thought it was “likely” that the financial challenge associated with Covid-19 would cause their organisation to stop operating altogether in six months’ time.
Have launched a Charity Health Check which asks 174 charities across England and Wales about changes seen in April across five key markers of financial health. A score above 50 means an improvement. A score below 50 is a deterioration. 50 means no change.
- The score for May was 30.8 out of a maximum 100.This low score shows charities had an extremely bad April and face an enormous financial squeeze.
- New business and donations are worse for 70% of charities surveyed.
- Cashflow – a key measure of organisational health which allows bills and wages to be paid – has worsened for 59% in the last month.
- Reserves have worsened for 61% of charities.
- Spending on front-line services has remained steady, with 70% of organisations either improving or sustaining expenditure despite the falls in cash, reserves, donations and grants.
A survey of 116 Bond members found that:
- 43% believed they would not survive the next six months without urgent additional support as a result of the coronavirus pandemic.
- One in 10 of the respondents reported that their organisation had made redundancies.
- 54% had furloughed staff.
- 28% had asked staff to take temporary pay cuts.
- 70% of organisations said they expected the crisis to affect their organisational finances this financial year and to start affecting them in the next one.
Pro Bono Economics
Pro Bono Economics is conducting a weekly tracker to find out how coronavirus is affecting charities.
- 92% said coronavirus has had a negative impact on their ability to meet their charity objectives over the next six months.
- Two-in-five (39 per cent) respondents said the single biggest issue they were facing was the impact of social distancing on their ability to deliver their services. One-in-three (31 per cent) said that the way in which Covid-19 had affected their ability to fundraise was the biggest single issue.
- More than half (57 per cent) said they’d reduced their activity in a significant way in response to financial challenge raised by the crisis.
- When asked to rate the sufficiency of the government’s financial support for civil society in the face of Covid-19 (where 1 = entirely insufficient and 10 = entirely sufficient), the average score across all respondents was 4.3.
Small Charities Coalition (SCC)
SCC published the results of a survey which found eight of ten small charities (80%) have had to alter or drop services. Other findings include:
- Only one in five (20%) small charities are able to provide normal services because of the pandemic.
- One in ten small charities expect to make redundancies.
- Less than four in ten (37%) had set up remote working.
Looking specifically at London-based charities, London Plus released research which highlights:
- Four in five charities are impacted by the coronavirus
- 43% said they have had staff absences due to coronavirus
- 59% of respondents agreed coronavirus has had a notable impact upon the sector.
A survey conducted by IoF Cymru includes data from 91 fundraisers on the impact of the crisis on their organisations:
- 70% say that they expect their charity will have to make cuts to the services they deliver.
- 86% of respondents either have low confidence or no confidence at all that they will be able to achieve their individual financial targets during this financial year.
- An overwhelming 96% of respondents say the government has not done enough to support charities which are losing fundraising income.
- Available government scheme are making a difference but there are gaps in funding: 59% of respondents say the proposed government support will help their charity, whilst 41% say that none of the proposed government schemes will help their charity.
In Northern Ireland, NICVA published the results of their COVID-19 Impact survey. The key findings are:
- Nearly every respondent indicated that the crisis was impacting their organisation (98.3% of organisations).
- Just under a quarter of charities said the pandemic threatens their survival.
- About forty-five percent (45%) reported they had stopped services and their activities which impact 100 service users a week.
In Northern Ireland, CO3 conducted a survey in partnership with the Institute of Fundraising Northern Ireland:
- 38% of respondents said their cash flow is in an unstable or very unstable position, with 27% of respondents citing that they have lost £100,000+ of income to date.
- 32% stated that their organisation is at risk at closing in the next 12 months due to Covid-19.
- 39% said they have stopped some services, and a further 33% citing that they may have to in the near future.
- 29% shared they have under two months running costs in the bank.
- 74% of charity CEOs worried about the poor mental health of staff, 68% stating that their staff are highly anxious due to lack of job security and 54% highly anxious due to increased demand for services.
Directory of Social Change
Directory of Social Change (DSC) has surveyed thousands of charities it supports to understand the impact of coronavirus on the charity sector. Key findings:
- Half of the charities surveyed said they had been experiencing financial difficulties because of the pandemic with a further 42% expecting to have financial issues soon.
- More than 6 of every 10 charities surveyed said they were using the governments Coronavirus Job Retention Scheme to furlough staff.
- Over half of the respondents to the survey say they will close within the next 6 months without additional financial support.
National Lottery Heritage Fund
National Lottery has produced a survey to help understand the impact of coronavirus on the UK heritage sector. Receiving 1,250 replies, the survey finds:
- 91% of respondents have had to cancel events
- 69% of heritage organisations have been affected by a loss of revenue.
- 82% of organisations have reported moderate or high risks to their long-term viability. For charities, this is even higher - 90% of charity, third sector (and private) organisations have reported these risks.
- About a third (33%) of heritage charities surveyed reported they would be unable to continue past July if current circumstances persist.
The Childhood Trust has surveyed child poverty charities in London in relation to the impact of coronavirus. Their research finds:
- About 40% of child poverty charities in London will have to close within 6 months if they cannot raise the funds they previously forecasted to get prior to coronavirus.
- Almost 90% of charities report that vulnerable children will go hungry due to the absence of free school meals, the loss of parental earnings and some food shortages.
- 57% of charities expect that the fallout of coronavirus will leave vulnerable children as risk of abuse.
Conducted 24 phone interviews with a range of charity sector staff. The research found:
- Income was the overriding concern for all our respondents and this was causing high levels of worry and stress. Staff in some organisations had already been ‘furloughed’ and others were facing this or the more difficult decision of redundancies. For many there is a concern that they will struggle to remain relevant or visible as their cause is not directly connected to the current crisis and that income would be damaged in the short and long term as a result.
- For some charities there is a massively increased need from service users. Staff are really worried about their clients, and are hearing and seeing heart-breaking stories. This is particularly difficult when service users don’t understand what is going on, or can’t keep themselves safe. Even if charities are managing to keep up their own services, the knock-on effect of other services closing or being reduced is causing tension e.g. street shelters.
Research from SCVO , carried out between March and May 2020, found:
- Over a third of charities are experiencing an increase in demand.
- Half of charities expect to run out of cash in six months with fears that they could run out of funds before reopening.
- 90% of respondents have moved at least some of their services online.
- 7 out of 10 charities are worried about cuts to budgets and services.
- 1 in 10 charities are concerned that they might have to close for good.
- Between 15-30% of sector staff have been put on furlough.
OSCR conducted a survey from the 5th May to the 15th May asking charities about the impact of coronavirus (COVID-19). There were 4,827 responses. The research found:
- cancelling or postponing planned work or events was the single most common impact of COVID-19 and the associated lockdown upon charities, with 78% affected in this way
- over half of the charities (51%) had lost income from fundraising.
- one in five (20%) reported a critical threat to their financial viability in the next 12 months
- one in five (20%) Scottish charities predicted that they would be unable to do the work they were set up to do at some point in the next 12 months.
Pro Bono Economics have carried out an economic analysis of the charity sector which suggests that:
- UK charities face a £10.1 billion funding gap over the next six months.
- 72% of charities expect demand to rise over the next six months.
- In order to meet the increase in demand, the sector would require £3.4 billion of funding.
- 59% of charities have had to significantly reduce their activity due to reduced income as a result of the pandemic.
Reduced services and/or risk of closure
- Treetops hospice estimates that they have had a loss of funding of £1.4 million which will have a drastic impact on the services they provide.
- Catherine Bosworth, Director of Income for Hospice UK, reports that hospices have recorded a fall in income of approximately £70 million since the beginning of March. She anticipates many hospices will have to reduce or cut services as a result of reduced funding.
- Animal Health Trust has seen serious financial difficulty since they had to suspend their services in light of government measures promoting physical distancing. In response to the crisis, the charity has put all of its staff on furlough and plans to take a decision on its future by the end of April.
- Sue Ryder has said that without new funds it will have to close its hospices and it will be unable to care for people within their own homes for months.
- Many food charities have struggled to get food supplies with reduced donations and difficulties in procurement.
Increased demand for services
- Lighthouse Construction Industry Charity has seen calls to their Construction Industry Helpline increase by 25% a week during the coronavirus pandemic.
- Matthew 25 Mission, a homeless charity in Eastbourne, has seen a 50% increase in people using their help centre at the start of April.
- Age UK report that demands for its services ‘have g through the roof’ despite having to furlough 70% of its staff.