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The Charity Sector Outlook is Deteriorating

Comparatively speaking, fundraising during the peak of Covid might now be reasonably described as the ‘Good Old Days’.  The metrics below are 2 of the 100+ tracking metrics from the 9 dashboards in our new Microsoft data extraction tool, created with pro bono support from the OR Society, built by Sujith and funded by the GSR Foundation.  

In Sep 2023, our £1bn Funding Cuts report, suggested that the Government cuts may well derail the fragile recovery we were tracking at the time and highlighted the risk of widespread charity closures and potential long term structural damage. Below is the Sector Resilience Data for June 2020 to April 2024.

The far left dip is Covid, centre right is the CoL crisis. We slowly emerged but from late 2023 (far right), the £1bn public sector funding cuts began to bite.

If you look at the data, the crisis for charities actually began in late 2021 and has impacted everyone.  However, at least through to mid/late 2023, those in greatest financial distress were primarily the poverty and advice charities in the front line.  However, our analysis of the funding cuts data shows that this is impacting most on social care and health, education and justice charities.  And as council grant funding is non statutory, small local charities and community groups are being hit hard too.

The risk of long term sector structural damage we identified last year is now much more real.  We and others have suggested ways in which we might respond to prevent this (at the bottom of our online version of the Funding Cuts report) but it would require genuine collaboration between sector bodies and Government, and decisive strategic action.  We'd love to be proved wrong but think that is extremely unlikely.  

The Fundraising Performance data is even worse - more to follow on this next week.

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