More than one in five charities report cancelled contracts

Finance | Vibeka Mair | 28 Feb 2012

A survey commissioned by Charity Bank has revealed that more than 20 per cent of charities have suffered from the cancellation of contracts with businesses and government bodies during the last year.

A further 25 per cent of charities with contracts reported that lengths of existing contracts have been shortened within the past 12 months.

The research, conducted by the Charity Technology Trust in January and February this year, polled 386 charities across the UK.

It found 36 per cent had increased monitoring of spending and performance with regards to government and statutory funding in the past 12 months. The survey also shows that charities’ cashflow is being squeezed as they are being forced to wait longer for funds to be received.

The types of payment affected include public sector earned income (24 per cent of relevant respondents indicated that payments were taking longer), public sector grants (22 per cent), trading (25 per cent) and trusts, lottery and foundations (25 per cent).

Charity Bank is using these findings to review how it can best serve the charity sector in very tight economic conditions.

“Not so long ago charities and social enterprises were encouraged to engage with government and business as a key to sustainability,” commented Malcolm Hayday, chief executive of Charity Bank.

“But now we are seeing the effect of the economic crisis in cancelled contracts and tighter trade terms for organisations whose bargaining position has never been as strong as the role they play in society.”

Directory: Charity Bank Ltd | Charity Technology Trust (see CTT)
Who's Who: Malcolm Hayday

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