Charities fear previous sources of income will not return post-Covid

Charities are fearful that their previous sources of income will not return as the UK recovers from the Covid-19 pandemic, according to latest research.

Those responding to academics, who are researching the pandemic’s impact on the charity sector, say they are concerned that emergency funding they have been offered over the last year is drying up as will fundraising and other traditional income sources.

Trading and public donations may struggle, “particularly with many expecting an economic recession looming”, according to the research by the National Council for Voluntary Organisations and academics at Sheffield Hallam and Nottingham Trent universities.

Their latest report says: “Concerns about potential recession and the impact on individual finances might mean that individual and corporate giving might reduce as donors may not have the resources to contribute.”

It adds: “Some interviewees reflected that the pandemic has continued to highlight how fragile the sector finances are. With many organisations operating on tight margins, and being dependent on short-term funding, COVID-19 intensified questions about the long-term sustainability of their organisation and the sector as a whole.

“So even for those organisations that have survived in the short-term, to get through the pandemic organisations have had to use reserves and cope with cuts, meaning that they are in a worse situation than 12 months ago. This raises considerable anxiety about their long-term survival.”

One charity representative told researchers that they were concerned about the financial future of their organisation in 18-months time when “all of this funding stops” and “our contracts start to end.”

Another said: “It’s the unknown and the uncertainties about how the economy will recover, how our donors will respond in the future.

“With more and more people losing their jobs of course they’d have to prioritise their own food bills. They’re not going to be giving to charity or the third sector.”

Previous research released through the project found that charities felt better prepared for Covid-19 lockdowns this year than when they were first imposed in 2020.