Coronavirus: 10% of charities likely to close by November

Around 10% of UK charities think it is 'likely' they will cease to operate before the end of November, a new survey has revealed.

A survey by Pro Bono Economics revealed a number of stark statistics about the financial state of the charity sector, highlighting a potential loss of thousands of UK charities by November.

Around 10% of respondents said they feared for their future beyond November, which Pro Bono Economics said will have 'significant consequences for vulnerable individuals and for the wider UK economy'. It estimates the total value of activity in the sector at around £200bn a year.

The survey findings come as Chancellor Rishi Sunak warned the UK is facing a 'server recession', with no guarantee of a quick bounce back.

The economic impacts have affected charities throughout the lockdown period, as demand drastically outstrips resources. Many charities have had to furlough a significant proportion of staff at the same time as an acceleration in demand for services.

Of those surveyed by Pro Bono Economics, 90% said they think the crisis will negatively affect their ability to meet their charitable objectives in the coming six months, while 64% say they've already cut back on activity in a 'significant' way.

Furthermore, 95% of charities are expecting Covid-19 to affect their income over the next six months, with more than one in four (28%) expecting their revenue to more than halve to pre-crisis expectations.

The survey was taken over the past week and concluded on Wednesday when the Culture Secretary Oliver Dowden announced £150m in funding for charities.

This will top up the £750m previously allocated to charities by the UK government, although leaders have criticised the amount as a 'just a drop in the ocean', compared to the sector's predicted loss of £4.6bn.

A majority of charities responding to the survey declared themselves 'unimpressed' with the support on offer from the government.

When asked to rate the adequacy of the government’s approach, 71% scored it at five out of 10 or below.

The organisation conducts a weekly survey within the sector and next week's is set to provide the first test of any change in sentiment in the sector.

Next week’s survey is set to provide the first test of any change in sentiment in the sector.

“The Chancellor warned this week that the UK’s post-Covid economic recovery was likely to lack any ‘bounce’, and our survey findings point to a similar sentiment across charities," the firm's chief executive, Matt Whittaker said.

"It is in the DNA of charities to cope with difficult circumstances but, eight weeks into lockdown, it is clear than many in the sector are under extreme pressure.

“Not only do nine-in-ten say they are being negatively affected, but two-in-five say they’ve become more pessimistic over the last seven days. Most worryingly, one-in-ten say they expect to go out of business within six months.

“With smaller charities appearing to be even more exposed, the opening of applications for support through the new Coronavirus Community Support Fund from today is hugely welcome. Many charities tell us they fear being overlooked by the scheme, however – something we’ll be monitoring through our survey in the weeks to come.”

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