Charities in deprived areas to be hit hardest by Covid-19 pandemic, says report

Charities in deprived areas “will be more severely impacted” financially by the Covid-19 pandemic than those in more affluent areas, research has found.

A study has found that charities operating in areas of deprivation in the North of England will be hit hardest by the pandemic. This is because communities in these areas are disproportionately affected by lockdown and recession for longer and have less money and time to support good causes.

This adverse impact on charities operating in less affluent areas was mirrored in the last financial crisis, the aftermath of the 2008 crash, the research found.

“During the Covid-19 crisis to date, we have seen how it has had a disproportionate impact on those communities with the highest levels of inequality and deprivation,” said the research by think tank IPPR North, into the affect of the pandemic in the North of England.

“Similarly, we should expect the financial impacts of Covid-19, to also be highly uneven. Like in the aftermath of the 2008 crash, we can expect that those TSOs (third sector organisations) in the most deprived areas will be more severely impacted.”

The experience of the 2008 crash showed that charities “in areas with the highest levels of deprivation were much more likely to face significant financial challenges throughout the following decade.

“Between 2008–10 and 2010–12, the percentage of organisations in the poorest areas with significantly falling income increased from 17% to 33%. By comparison, in more affluent areas, the percentage increased from just 10% to 15%.”

Another group of charities set to be hit hard are those that rely on earned income.

The report added: “Those reliant on earned income will have already seen a significant negative impact, because of lockdown and social distancing rules that have meant that many functions will have had to close, or to change their operations radically.

“Revenue from charity shops, venue hire, large scale events which bring in substantial sponsorship revenue (such the Great North Run), and cafes, for example, will have collapsed, and organisations will also have incurred financial costs to ensure that their facilities are Covid-secure.”

Earlier this month it emerged that fundraising income may fall back to levels last seen six to seven years ago, due to the Covid-19 pandemic.