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Over 90% charities faced ‘negative impact’ of Covid, Commission research finds

01 Nov 2021 News

More than 90% of charities were negatively affected by the coronavirus crisis, according to research conducted by the Charity Commission.

Six in 10 of the charities surveyed saw their income fall as a result of Covid-19, while 57% were forced to cancel events or planned work.

Charities are also worried about the ongoing financial impact of the pandemic, with 62% saying that they “anticipate a threat to their charity’s financial viability” during the next year.

The findings are based on polling of 1,966 charities which was conducted in July and August this year. The data was released last week.

Impact of Covid-19

The Commission said that 91% charities had experienced “some negative impact” from the pandemic.

This included having to cancel events or other work (57%), losing fundraising income (49%) or having less access to volunteers (32%). Some 60% lost income from their charitable activities.

One in 100 charities reported that they had folded as a result of Covid-19, with another 1% saying they had merged with another organisation or were in the process of doing so.

How charities responded to the pandemic

Just under a fifth of charities had furloughed some staff (18%), rising to half of charities with incomes of more than £500,000 a year. Four in 10 said they had used their financial reserves to get through the crisis.

One in five accessed local authority funding and around one in seven accessed funding from the UK government. 

Around half (49%) said the pandemic meant they have “made better use of digital technology” in working with both staff and beneficiaries, while a similar proportion (45%) reported that they “adapted their services in light of restrictions”.

The future

The survey also found “frustration and uncertainty” about the future among charities, the Commission said.

Over a third said that they expected to generate less revenue from fundraising next year, while 62% anticipated “a threat to the charity’s financial viability in the next 12 months”.

However, the majority also said they expected to be in the same or better overall position next year.

Only 1% said that they expected to make staff redundant in the next 12 months because of the direct and indirect pressures caused by Covid-19.

Commission: Some charity disputes growing ‘in ferocity’

In a blog accompanying the survey findings, the Commission said that financial risks “don’t tell the full story” as charities think about the future.

The blog continued: “Drawing on our own data, as well as the research findings, we consider that there may be more subtle threats on the horizon for charities, relating to their governance and culture. 

“We know from our own case work, for example, that disputes in charities seem to be increasing in volume and, in some cases, in ferocity. 

“It is also our experience that disputes between trustees are often at the heart of governance failures. We fear that will continue, to the detriment of charities’ beneficiaries, and perhaps also to public trust in charities.”

The Commission added: “While society has been re-opening over the summer, uncertainty about the course of the pandemic continues, and we are yet to see the impact of the closure of the furlough scheme.

“Many trustees and senior leaders will face tough decisions about their charity’s long-term future in the months ahead.”

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