One in five charities in Scotland face a “critical threat” to their financial future over the next year, according to research released by the Scottish charity regulator (OSCR).
More than half the charities surveyed said they had lost income from fundraising as a result of the coronavirus crisis, and over 40% said they had lost income from other sources including trading.
The research was conducted over ten days in May, and analysed responses by 4,800 charities in Scotland.
OSCR found that 95% of charities had taken action to try and counter the impact of Covid-19.
However, the ability of charities to conduct their work had also been affected by the pandemic, with 78% reporting that they had postponed or cancelled events and programmes, and nearly a third saying they had seen their volunteer numbers decrease.
20% predicted they would be “unable to do the work they were set up to do” at some point in the next year.
Asked how they would like OSCR to support them, charities told the regulator that they would welcome more general support on funding, more flexibility with deadlines and payments, and for OSCR to keep the sector informed on government guidelines.
Charities face 'very serious long-term impact'
Maureen Mallon, chief executive of OSCR, said: “It is clear that the pandemic has hit many charities hard. Nearly every charity in Scotland reported some form of negative impact from Covid-19 or the lockdown measures.
“Charities have shown passion, skill and expertise in countering this impact as much as they can, but there is a significant proportion that still need support in a number of areas. While the lockdown measures are starting to be lifted, the very serious long-term impact on Scottish charities and the support they provide to beneficiaries is beginning to become clear.
“Many are accessing the wide range of financial and other support and guidance being made available during this time. It will be vital to ensure that this continues to be offered in a thoughtful and targeted way.”
OSCR said they will use the research findings in their work with the Scottish government.
SCVO: 'Perfect storm' ahead
David McNeill, director of development at the Scottish Council for Voluntary Organisations (SCVO), said: “It is clear is that while there has been a colossal and inspiring adaptation to support people through the lockdown period, many voluntary sector organisations are likely to face the perfect storm of reduced income and surging demand over the coming months.
“As predictions point towards some significant economic and social challenges as we begin to exit lockdown, organisations will be facing a greater demand for services which support those who have lost jobs, have seen their financial situations change, have faced abuse at home, are struggling without regular childcare or education, and much more.
“The initial response from the Scottish and UK governments has been focused on the immediate needs of organisations who have had a sudden drop in income or can provide vital support to communities during the crisis. Funders have been collaborating more than ever, working innovatively to ensure emergency funds can be accessed quickly by those most in need and allowing existing funds to be used flexibly.
“In the coming months, organisations will need support from all funders – including Holyrood, Westminster, local authorities, independent grant and trust funders and members of the public – to help them as much as they can to survive.”