Running on Empty? The size of the deficit for small & medium size charities

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On Monday

26th November the Charities Aid Foundation hit the headlines [link] again with some troubling research on the finances of Britain’s small and medium size charities.

Using Charity Commission data, CAF uncovered steep deficits of more than £300m in 2011, in stark contrast to an overall surplus of £325m just five years ago, amongst small and medium charities (which are defined as those with an income of up to £1m). This research comes in the wake of this year’s UK Giving report by CAF in collaboration with NCVO, which reported an unprecedented 20% drop in individual donations to charity.

The worrying trajectory of charity finances continues to cause concern amongst the sector, who have called for help and solidarity from Government, business and the general public as part of the new national Back Britain’s Charities campaign.

We know, of course, that different charities have different circumstances but this is yet more evidence that small and medium sized charities – which make up the bulk of Britain’s voluntary sector– are being hit hardest. Many of the larger household name charities have fundraising capabilities and long-term reserves which insulate them against the problems in the economy and the drop in donations.

Charities of all sizes have been joined by businesses, politicians and individuals under the banner of Back Britain’s Charities, which strives to underline the value of the voluntary sector, and the intense pressures they are under at a time of cuts in government funding, a sharp decrease in charitable giving and increased demand for services. We know from the contact that we have already had from charities, that many smaller organisations of the sort who provide community or niche services are having to take drastic measures – such as turning down the heating at their premises – in order to keep costs low and avoid going to the wall. 

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We are calling for:

  • People to support charities through regular giving, regardless of how much time or money they can give.
  • The Government to modernise and promote Gift Aid and payroll giving so donations go further.
  • The Government to ensure that public bodies do not cut funding for charities disproportionately when making spending reductions.
  • Business to support charities either through donations, or through practical means.
  • Charities to work together with the Government to modernise and improve fundraising and enhance their impact, so that every pound given goes further towards helping beneficiaries. 

See the Back Britain’s Charities website for more information.

 

Fiona McEvoy

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