One in five small charities worried about the future, research reveals

Around one in five charities with an income of less than £1 million are “struggling to survive”, a new study has revealed.

The finding forms part of the Charities Aid Foundation’s (CAF) Charity Landscape Report 2019.

The study – which compiles the responses of some 452 charity leaders – also reveals that 14 per cent of all charities, no matter their income, are struggling to make ends meet.

According to the report, the greatest challenges facing charities include generating more income, as cited by 59 per cent of respondents, followed by meeting demand for services (33 per cent) and a reduction in public Government spending (32 per cent).

Likewise, More than nine in 10 (92 per cent) charities believe that, over the next five years, the Government will expect the third sector to fill in gaps in public service provision.

In respect of Brexit, the majority (63 per cent) of charity leaders believe that leaving the European Union behind will have a negative impact on their organisation, with a further one in three (37 per cent) anticipating a drop in income.

Charity leaders also report staff shortages and difficulty recruiting and retaining staff, as well as “anxiety, uncertainty and fear” over the future of EU funding projects.

Commenting on the report, Susan Pinkney, Head of Research at the Charities Aid Foundation, said like all private and public sector organisations, the charity sector is no exception to uncertain times.

“Charity leaders have spoken with a united and clear voice, emphasising several key points. They are fearful of the impact that Brexit will have, for example on staff retention and the ongoing funding that allows them to provide services for those who need them.”

She added: “Despite this, there are reasons to be optimistic. Eighty-seven per cent of charity leaders are investing in technological innovation in order to meet the evolving needs of their beneficiaries, reflecting a strong desire to plan ahead for the future.”

Trustees are required to consider whether their charity will be able to continue for a period of 12 months from the date the accounts are signed, and reflect any concerns in their financial statements.

If you are a charity who is concerned about your financial future, speak to the team at Clemence Hoar Cummings to discuss how we can assist with cashflow planning.