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Impact Of COVID On Charities Will Be ‘Uneven & Unpredictable’ Throughout 2021

Mon Mar 15 2021

This is the fifth such snapshot of how the sector is doing as part of the project called Respond, Recover, Reset: The Voluntary Sector and Covid-19.

A study, just released by the National Council for Voluntary Organisations, in conjunction with Nottingham Trent and Sheffield Hallam universities, based on 600 NotForProfit organisations has found that charities fundraising sources are projected to decline right across the sector during 2021, as the pandemics impact continues to be “uneven and unpredictable”.

 

The study is the fifth such snapshot of how the sector is doing as part of the project called Respond, Recover, Reset: The Voluntary Sector and Covid-19.

 

The organisations involved were asked to project any changes to their revenue streams during the 21/22 financial year to be compared with the same streams pre-pandemic.

 

  • 40% of charities reported having only six months of operating reserves left
  • 46% of those surveyed said reported that the demand for their services had been increasing over the last 30 days
  • Just over 33% have said their running costs had increased in the last year
  • 46% said they’d had to use cash reserves just to cope during the pandemic
  • Nearly 10% reported they had either no cash reserves left or not enough to last out a month.

 

Making the situation worse, NonProfits overall grant income is also expected to decrease slightly in 2021 by an average downturn of at least 3% according to the report… that’s despite numerous warnings of the sector being under pressure with emergency grants expiring at the end of the year.

Even larger declines are projected for service delivery contracts, public donations, investments and other income sources.

 

Whilst none of this may sound unexpected, the report also underlines the reasons they think the pandemic has put the NonProfit sector under such pressure whilst the effects on individual charities continue to vary wildly.

 

  • 43% of respondents had reduced their range of services due to COVID
  • 37% had actually widened their range of services
  • Nearly 33% have recorded an increase in total income YoY
  • 47% have said their overall income had dropped.
  • 33% said their financial position had taken a downhill turn in the last 30 days
  • Nearly 50% said it had remained stable in the last 30 days
  • 18% said the last 30 days had seen an improvement.
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While many organisations have been able to build up reserves, half of organisations are using them to cover day-to-day costs. The expected downturn in income – even for those organisations seeing only marginal declines – is worrying not just for the charities and groups involved, but for the lives and communities that they serve.

Alex Farrow - Head of Networks and Influencing, NCVO

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Not Quite Ready To Gey Back To Work Just Yet?

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Mon Mar 15 2021

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