09/03/10

By Andrew Holt

The recession has had a dramatic and adverse effect on ethnic minority charities, depriving already disadvantaged communities of essential services, says a report released today by the Council of Ethnic Minority Voluntary Sector Organisations (CEMVO).

CEMVO's Report on the Impact of the Economic Downturn on Black and Minority Ethnic Third Sector Organisations reveals 45% of all Black and Minority Ethnic (BME) third sector organisations have had funding cut by local authorities and other funders since the beginning of the recession in 2008, despite a 77% increase in demand for their services over the same period.

The figures have led leading social justice campaigner Gary Craig, Visiting Professor at the University of Durham, to state his belief that the BME third sector is now "not just under pressure but under attack."

The report, based on a six-month study of BME charitable organisations by CEMVO, reveals that cuts in grants by local authorities have caused most problems for ethnic charities, 42% of which have incomes of less than £10,000.

Of those that had seen cuts in funding, 39% were cuts from local authorities alone, while 61% faced cuts from local authorities, government departments, grant making trusts, the Big Lottery Fund, and others.

"That nearly half of all BME charities are now struggling is a scandal,"
said Hashmukh Pankhania, chief executive of CEMVO.

"Unemployment is highest among BME communities and the current economic climate has brought an even greater demand for employment and debt management advice, education and training. BME charities should be benefitting from increased funding in 2010, not facing cuts that will marginalise and limit still further the inadequate help already on offer."

Professor Gary Craig writes in the foreword to the report that news of cuts from a variety of funding strands proves the value of BME organisations is consistently under-recognised.

"In a country where the BME population now exceeds 8% and is substantially larger in some areas, where this population has been shown to make an enormous social, economic and cultural contribution to UK life, it makes no sense to undermine the activities of organisations striving to maximise that contribution. Yet that is precisely, as the evidence in this report shows, what is now happening."

He added: "Society's failure, at all levels.to ensure proper resourcing of BME organisations is essentially a consequence of racism which remains a serious and growing problem in the UK. CEMVO's study of the BME sector shows a sector not just under pressure but under attack."

Although the UK government pledged up to £42.5 million to help the wider third sector weather the recession in February 2009, 99% of BME charities responding to the CEMVO survey said they had not been approached by or made aware of how they might benefit from this financial support by any infrastructure organisation other than CEMVO.

A succession of studies from the 1980s onwards has shown how BME organisations have been underfunded - even set against the context of general underfunding for the Third Sector - and struggled to survive.

The CEMVO report makes a number of recommendations to the government,
including:
Better marketing and promotion of help available to the sector
Ring fencing emergency funding for BME organisations' cash flow and interim payments to enable them to meet obligations
Adopting a policy of payment in advance (particularly by local
authorities)
Expediting the use of proceeds from dormant accounts
Giving greater publicity to the availability of interest-free or low-interest loans within the sector
Increasing investment in tailored capacity building to secure long-term sustainability for the third sector
Increased investment to encourage BME communities to engage in volunteering

The full report is available online at www.cemvo.org.uk under the Policy/Research section.

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