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Two in five aid charities could close within six months, survey finds

Two in five international development charities risk closure in the next six months unless they receive additional funding, a survey from umbrella body Bond has found.

Bond surveyed 116 aid charities, which represents about a quarter of its membership, to try to gauge the impact coronavirus is having on the sector.

Some 50 respondents (43%) said their organisations will not survive longer than six months without extra funding. Half of them are small organisations with an income of less than £2m, which are especially at risk.

One in ten organisations already made redundancies

More than half of the respondents said their organisations have already started cutting back on staff in some form, with 10% having already made redundancies, 28% having asked staff to take temporary pay reductions and 54% having furloughed staff.

The majority of organisations (70%) also said that they expect the long-term economic consequences of the crisis to last into the next financial year.

Finally, more than half (53%) organisations have either already scaled down their overseas programmes, or are planning to do so in the near future.

‘We risk failing to contain the virus globally’

Bond said that one likely consequence of aid organisations cutting back on services is that it will be harder to get the virus under control in vulnerable countries, which means it will be a global threat for longer.

Stephanie Draper, CEO at Bond, said: “NGOs are doing everything in their power to absorb the impact Covid-19 is having on their organisations to avoid any adverse consequences on the vital services they provide to people living in poverty around the world.  

“But if over a third of organisations, particularly small specialist ones, fold over the next six months then more vulnerable people will be at greater risk of going without food, clean water, education and healthcare. This will leave many people dealing with Covid-19 without help, in countries without adequate healthcare systems and the financial strength to protect livelihoods.

“We also risk failing to contain the virus globally, which will mean it continues to be a threat, undoing any progress made towards building a healthier, more sustainable and just world.    

“To support NGO programmes and their response to global challenges around the world, we ask donors to explore new funding mechanisms, including a stabilisation fund, that allow NGOs both big and small to cover their core costs so they can to continue to provide essential services and ensure we do not leave the poorest behind.”

Among the biggest aid charities, Oxfam has furloughed two-thirds of its staff, is losing £5m a month due to charity shops closure and said financial constraints force it to proceed with its restructure plans right away. These had previously been postponed because of the lockdown.

Both Save the Children and Action Aid have launched coronavirus emergency appeals, with Save the Children aiming to raise $100m globally in its biggest appeal ever.

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