Most charities expect the near future to hold further drops in income, but anxiety over cashflow has lessened as the recession came to a close.

But while on the whole fewer charities expect to see a fall in fundraising ahead, the level of anxiety over potential government funding cuts has increased significantly, according to the Managing in a Downturn report released today.

The report, produced by the Institute of Fundraising, CFDG and PricewaterhouseCoopers, polled members of the first two organisations in November 2009 and follows on from an initial survey of the same membership group in May of the same year.

While the survey was undertaken while the UK was still officially in recession, it showed that charities were still planning on investing in fundraising, with 44 per cent planning to invest in major donor fundraising and 40 per cent looking to put money into corporate fundraising.

On the topic of corporate fundraising there was a divergence of opinion between large and small charities, with smaller organisations being far more pessimistic that income from corporations will fall.

Sustainability

The survey authors also suggest that “charities are not being as realistic as the private sector” in its predictions about staffing costs. Sixty-eight per cent of charities expected their wage bill to increase over the next 12 months, whereas 60 per cent of private companies had already imposed a pay freeze, or planned to.

Charities reported using their reserves in order to maintain services, but the report warned that such action may not be sustainable. Organisations need to have fall-back plans - such as for collaborations, mergers or scaling back services – in case reserves dwindle too low.

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Charities more optimistic, despite predicting income falls

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Directory: Charity Finance Directors' Group (CFDG) | Institute of Fundraising | PricewaterhouseCoopers LLP