06/08/10
By Andrew Holt
New figures suggest that one in three operating charities have no funding in reserve.
And the median reserve level for those in receipt of state funding is only one month’s worth of expenditure.
The assets and reserves figures published today by the National Council for Voluntary Organisations (NCVO) suggest that drastic cuts could threaten the survival of many organisations providing vital services.
The research also showed wide variation in reserve levels for different types of voluntary organisation.
While housing associations typically hold nearly 20 months’ (19.9) worth of expenditure in reserve, at the other end of the scale this level falls to 4.5 months for employment and training organisations and only 1.4 months for playgroups and nurseries.
Commenting on the findings, Sir Stuart Etherington, chief executive of NCVO, said: "These figures show how vulnerable many community and voluntary organisations will be in the testing and unpredictable times ahead. Without a financial safety net, vital services for local people and communities will be at risk.
"This really demonstrates the need for public sector funders to work with voluntary and community organisations where cuts are necessary, to make sure they are properly planned and implemented.
"As the recession has driven up the need for many frontline services, it is critical that the sector retains its capacity for supporting some of the most vulnerable people in society."
Other key findings include:
The sector’s level of free reserves is estimated to be worth £46 billion in 2007/8.
The sector’s net assets are worth a combined £96.6 billion, including tangible fixed assets such as buildings.
Overall the sector has an average of 17 months’ expenditure in reserve, but this average is driven up by the significant unrestricted assets held by research bodies and grant-making foundations.
NCVO is now examining options for taking this work forward, including in-depth qualitative research and collating case studies.
Other stories you may find of interest:
David Cameron: Leadership for a better Britain
David Cameron put the Big Society at the heart of his keynote conference speech yesterday, stating: "My driving mission in politics is to build a Big Society, a stronger society." He said: "It starts with families. I want to make this the most family-friendly government the country has ever seen. More childcare. More health visitors. More relationship support. More help with parenting. And for the 120,000 families that are most troubled - and causing the most trouble - a commitment to turn their lives around by the end of this Parliament."
Budget 2011: Sector verdict is broadly positive
The sector has given its verdict on the budget, and there is much positive comment, but this is tempered by some disappointment and criticism. The Chancellor’s budget speech did herald some significant – and in some cases unexpected – changes to the reliefs available for charities and philanthropists. Key measures announced in the Budget include proposals to simplify Gift Aid, encourage wealthy people to give more to charity...
Sector welcomes Giving White Paper
Sector organistions have broadly welcomed the Government's Giving White Paper published today. ACEVO, NCVO, CFDG, CAF, IOF, Volunteering England and the Philanthropy Review all welcome the paper, albeit with different levels of qualification. The Social Enterprise Coalition's Peter Holbrook and the DSC are the most critical....
The European Union is one of the largest donors to civil society in the world, but also accused of not truly engaging with sector organisations. Peter Davy investigates the EU/sector relationship
Current struggles over the Eurozone debt crisis have done little to endear the EU to British voters, it seems. Two polls in July had half the population saying they would vote to leave were a referendum held. In the survey by pollsters AngusReid, only a third thought EU membership had been positive for the country...
With morale in the sector at its lowest ebb, Duncan Jefferies asks what makes an effective leader and how charities can attract and develop the best management talent in the current environment
Andrew Holt investigates the vital and often unique work taken on by faith charities, the
part they play in the Big Society, and how they will survive in a testing environment
Faith-based charities form a significant part of the charitable sector, with 30,115 charities in England and Wales focusing on religious activities,equating to a shared income of £6.643 billion....
