One in seven charities to close within a year, survey warns

One in seven charities are anticipating closure within the next 12 months, a major survey of voluntary sector organisations has revealed.

The Covid-19 Voluntary Sector Impact Barometer is compiled by the NCVO and Sheffield Hallam and Nottingham Trent Universities each month, to see how the health crisis is impacting on the charity sector.

The latest survey, carried out between 24 October and 9 November, has found that
one in seven (14%) voluntary organisations are anticipating closure within the next year.

Of charities surveyed 5% said it was very likely they would no longer be operating in a year’s time, while 9% said it was quite likely they would be forced to close.

Most charities (80%) said that Covid-19 is set to negatively impact on their ability to deliver their objectives by autumn 2021.

Of the 639 charities that took part, 39% said their financial position had worsened over the last month, the same proportion as the previous month.

Income losses due to charity shop closures and restrictions on fundraising due to social distancing come as demand for services continues to increase. The proportion of charities expecting an increase in demand over the next month is 57%, while only 13% think demand will reduce.

The barometer also shows how charities are adapting to the pandemic. Over the last six months 41% of charities said they are increasing the range of services they are offering. However, the same proportion said they are decreasing their range of support.

Digital innovation is the chief change, with 92% of charities saying they have moved services online as a result of Covid-19.

Over the last month job losses across the sector have stabilised. While 16% said they had reduced their paid workforce over the last month, a similar proportion (15%) said they had hired more staff.

Over the next month the proportion expecting to reduce staff falls to 10%, while the number looking to increase staffing numbers has remained steady at 15%.

“The results of the barometer demonstrate that not all organisations are facing the same challenges. While many are struggling with reduced incomes or inability to offer their services, others have been able to adapt and some have even grown, said NCVO head of research Véronique Jochum and Nottingham Trent University professor of organisation studies Daniel King.

“That’s why it is important to identify where there is increased demand and need for resources.

“Secondly, shifting services away from face-to-face has undeniably been challenging, but covid-19 has also forced many organisations to do things differently and unlocked different ways of working.

“Our interviews have demonstrated that some organisations have managed to transform many of their services whereas others have found it extremely difficult.”

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