Criminal justice charities are struggling to recover all the money they spend on service contracts they are delivering, according to new research.
Some 224 organisations responded to a survey by membership body Clinks. The body also did 10 in-depth interviews and analysed the financial data of 752 charities and 220 companies.
Only 22 per cent of respondents said they always achieved full cost recovery on contracts they deliver, while 14 per cent said they never received full cost recovery.
Some five per cent of organisations said they were at risk of closure, but this rose to 30 per cent for organisations providing specific services for people from black, Asian and Minority Ethnic communities.
Compared to the wider charity sector, voluntary organisations working in criminal justice had much lower reserves.
Voluntary organisations as a whole in the UK had on average around six months of reserves in 2013/14. For the same year, organisations working specifically in criminal justice had an average of 1.9 months of reserves, which fell to an average of 1.7 months of reserves in 2014/15.
Grant funding from government has significantly declined for organisations who are criminal justice specialists.
In the financial year 2008/09, government grants for organisations whose core purpose is to work in criminal justice were worth £23.9m but this had dropped by 50 per cent by 2014/15.
But during the same time period, larger non-specialist criminal justice organisations experienced an increase in government grant funding.
Many organisations were increasingly concerned about their staff wellbeing, with 41 per cent saying their workers are taking on larger caseloads.
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Anne Fox, chief executive of Clinks, said poor conditions were preventing charities from delivering prison services.
“Voluntary organisations play such a large role in supporting people affected by the criminal justice system that it is almost impossible to imagine what it would be like without them.
“We know that our prison system is in desperate need of reform, and probation services are struggling to resettle people leaving prison.
“Organisations are partnering more, developing new services, involving service users and their families to change what they do. In order to truly reform the criminal justice system we must ensure that we have a vibrant and healthy voluntary sector that can deliver change.”