Eighteen per cent of chief executives says their organisation is “struggling to survive”, according to a report published today.
The Social Landscape 2017 report, published today by the Charities Aid Foundation in association with Acevo, is based on a survey of the 472 chief executives who completed the Acevo pay and equalities survey in September and October 2016.
Charities were asked the question “How strongly do you agree or disagree that your organisation/charity is struggling to survive?” A total of 18 per cent said they were struggling.
More than a quarter of smaller charities struggling
However the situation was very different for large and small charities. Of the 287 charities with annual incomes under £1m, 28 per cent said they were struggling to survive, and only 47 per cent actively said they were confident of survival. However among the 63 charities with incomes over £5m, none agreed, and 83 per cent were actively confident.
The last time the survey was conducted, in 2015, 21 per cent of small charities, and 15 per cent of all charities, said they were struggling to survive.
Struggle to generate income
Charities of all sizes said their biggest challenges were generating enough income, and achieving financial sustainability. The top five challenges were:
- Generating more income/achieving financial sustainability (57 per cent)
- Meeting demand for services (36 per cent)
- Reduction in public/government funding (34 per cent)
- Raising awareness of our charity/cause (24 per cent)
- Measuring and demonstrating impact (21 per cent)
Other key findings
The other findings of the report showed that many charities have needed to make redundancies, dip into their reserves, or cut services in order to survive.
- 35 per cent of organisations had to dip into their reserves last year to cover income shortfalls.
- 82 per cent of charities saw a growth in demand for their services, and 86 per cent expect to see further growth in the next 12 months.
- 61 per cent say they either have restructured in the past 12 months or will be doing so in the next 12 months.
- 33 per cent have reduced staff numbers in the last 12 months, or plan to do so in the next 12 months.
- 28 per cent say they have or will be reducing front-line services.
- 10 per cent have plans to merge with another organisation over the next 12 months.
- 85 per cent want to increase their social media presence, 79 per cent plan to introduce new technology, and 59 per cent plan to introduce new methods of giving.
John Low, chief executive of the Charities Aid Foundation, said: "In 2017 charities are facing ever-growing pressure on already-stretched resources. They are less confident than they were a year ago that they'll be able to meet this demand. In some cases they are being stretched to breaking point. Faced with tough times, charities are restructuring, reducing staff and in some cases adapting their mission.
“Charities remain optimistic despite an unpredictable political climate, a challenging economy and public sector funding cuts and are getting on with the job of improving people’s lives and making a positive difference in the years ahead.”
Vicky Browning, chief executive of Acevo, said: “The Social Landscape report provides evidence that charities are facing a perfect storm of rising demand and decreasing funds in a time of challenging economic conditions and volatile public trust.
“It is essential that local and national government work to protect the longer term capacity of the voluntary sector and the irreplaceable role that these organisations play in our communities.”
