One in seven charities are struggling to survive, according to a report released today by the Charities Aid Foundation and Acevo.
The report, Social Landscape: The state of charities and social enterprises in 2015, was compiled using responses from 572 charity chief executives. Some 15 per cent said their organisation was “struggling to survive” – with the figure rising to 21 per cent for smaller charities. A third of charities said they dipped into reserves to cover income shortfalls during the past year.
The report said charities were facing increasing financial pressure at a time when demand for services was increasing. Three quarters - or 78 per cent - of charities saw an increase in demand for services in the last year and 83 per cent anticipated a further rise over the next twelve months, the report said.
Some 59 per cent of chief executives questioned said they were pessimistic about government support for the sector. Leaders of charities with an income of above £5m are particularly worried about public and government spending cuts, with 40 per cent listing this as one of their biggest concerns, the report said.
Sir Stephen Bubb, chief executive of Acevo said: “These are tough times to be a charity. Acevo members tell me that in recent years demand for their services has surged while the funding environment has got tougher. This survey shows that charity chief executives are cautious but optimistic about their organisations’ future.
“Politicians of all parties should take on board the main message from this report and act on it: the third sector is vital to a free and fair society, and it needs their support. Politicians and the public should listen to charities and their beneficiaries, not close their ears to their concerns. We’ll be watching closely to see which parties take heed of this important message.”
John Low, chief executive of the CAF said: “Charities are facing many tough challenges in this continued age of austerity as generating income continues to prove difficult, whilst demand for services increases significantly.
“It is very worrying if a significant proportion of charities, especially smaller organisations, feel they are reaching breaking point. Charities play a central and essential role in UK society, working closely together with the state at a national and local level to enrich our communities, carry out vital support work and deliver services.”
But according to CAF, some charities are funding creative ways to cut costs, including "teaming up with other voluntary groups or private companies" to "help cut costs and make their work more effective".
The survey was compiled using interviews from 321 chief executives from small charities with an income of up to £1m; 147 chief executives from charities with an income of £1m-£5m and 104 chief executives from large charities with an income of more than £5m.
