Charity leaders expect their financial situation to worsen in 2012

As a year of economic struggles draws to a close, a new survey suggests that charity leaders expect their financial situation to get even worse in 2012.

The Charity Forecast Survey, published today by the National Council for Voluntary Organisations (NCVO), shows that nearly two-thirds (65 per cent) of charity leaders expect their financial situation to worsen over the next twelve months.

This is a higher level of concern than the 63 per cent expressed at the peak of uncertainty about spending cuts in the last quarter of 2010.

The survey also suggests that charity leaders’ optimism has declined throughout the past year, with 60 per cent of respondents saying that their organisation’s financial situation has worsened over the last 12 months.

One respondent said: "We have only got through the last year with a mixture of reserves, reorganisation, redundancies and resilience."

Commenting on the findings, Sir Stuart Etherington, chief executive of NCVO, said: "The voluntary sector has held its nerve during a very challenging year, but we are not out of the woods yet.

"While charity leaders are doing all they can to keep their heads above water, most are feeling frustrated and concerned about their ability to carry on supporting those most in need.

"Whilst the sector cannot be immune from the cuts, it is essential that both central and local government do all they can to mitigate the impact of these cuts on the sector’s ability to provide essential services and support vulnerable beneficiaries.

"Councils must manage cuts intelligently, engage the sector in the decisions they make and give charities adequate notice of funding cuts that will affect them.

"Any decisions made after 1 January will be in serious breach of the statutory guidance which stipulates that charities should be notified at least three months before the removal or reduction of funding."

Other findings from the quarterly survey include:

Thirty per cent of respondents plan to increase the extent of services they offer over the next three months. This is a fall of eight percentage points since the September survey.

Twenty-seven per cent of respondents have plans to decrease paid staff numbers over the next three months.

Sixty-five per cent of respondents expect to collaborate more with other organisations over the next 12 months, and the same amount expect to compete more.