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Small and medium-sized charities 'under threat' in Scotland, warns SCVO

Finance | Jonathan Last | 12 Sep 2012

The Scottish Council for Voluntary Organisations has today released figures that it says indicate reserves are running out for the country’s small and medium-sized charities.

Scotland’s smaller charities are the ones most affected by funding cuts, according to SCVO, and are suffering from spending more than they have coming in. While larger charities and housing associations saw modest income growth in 2011, other charities’ turnover has been falling since 2009.

The umbrella body for voluntary organisations in Scotland has published SCVO Scottish Third Sector Statistics 2012. It presents a statistical overview of the sector’s income and expenditure broken down into categories such as annual turnover, staff costs and assets, as well as drawing some more general insights.  

More employed, but hours cut

According to the document the voluntary sector is employing more people, but on less hours. Rather than cutting jobs, the sector is reducing hours for staff. Staff numbers have increased to 138,000, but of that only 83,350 are employed full-time.

Assets and reserves have in fact increased slightly to £9bn. But SCVO is concerned that the growth in assets held by large charities and housing associations is masking the struggles of the smaller organisations, and covering up a much more dire picture.

The sector’s income was £4.5bn in 2011 – modest growth compared to £4.4bn in 2010, says SCVO. With the exception of credit unions and housing associations, charities’ turnover was down to £3.21bn in 2011 compared to its 2009 high of £3.33bn.

The report focuses on data from Scotland’s 19,483 regulated charitable organisations. There are an estimated 45,000 in total in the country; these results do not include charities that operate across the whole of the UK.

It is available on the Scottish Council for Voluntary Organisations' website.

‘Something will have to give’

Martin Sime, SCVO chief executive, said that charities were running out of ways to compensate for the funding drain, with many having dipped into already-limited reserves last year.

“As income falls short of expenditure, particularly for smaller charities, organisations are being forced to use what assets and reserves they have to keep their doors open for as long as possible,” said Sime.

“Organisations are working hard to maintain the high quality services they provide to communities across Scotland and keep their staff. With ever-growing demand set to skyrocket as the UK welfare cuts kick in, organisations are facing an impossible conundrum.

"Something will have to give to secure a sustainable future for the sector.”

Directory: SCVO
Who's Who: Martin Sime