£10 billion funding gap causes chaos in UK charity sector

Almost six in 10 UK charities say they are likely to cut back services amid the coronavirus crisis

The COVID-19 pandemic is set to cost the UK charity sector 60,000 jobs with many organisations expecting years of financial pain ahead, new research warns. 

Pro Bono Economics, in partnership with the Institute of Fundraising and Charity Finance Group, surveyed 455 charities and found that 19 per cent have already made redundancies, with a further 23 per cent planning to make further cuts once the UK government’s furlough scheme ends.

While 5,400 charity job losses have already been announced during the pandemic, Pro Bono Economics estimates the actual figure is closer to 25,600.

The organisation warned another 34,100 sector employees may lose their jobs by the end of the year.

This comes on the back of recent research that uncovered a £10 billion (A$18 billion) funding gap over the next six months for UK charities, with incomes expected to drop by £6.7 billion (A$12 billion) as demand grows by £3.4 billion (A$6 billion).

Matt Whittaker, the CEO of Pro Bono Economics, said an “alarming proportion” of charity jobs were now at risk.

“That means many of the charity workers who have provided vital support to millions across the country since the start of the COVID crisis are facing a very uncertain future,” Whittaker said.

“Navigating this period rests in part on getting more resources into the sector, from government, from existing funders and from members of the public. But it also rests on reversing the public policy neglect the sector has suffered from over many years.”

While 68 per cent of charities expect demand for their support to grow in the next six months, 58 per cent said it was likely they will have to reduce their services.

Researchers also found that 70 per cent of charities expect it to take more than 12 months for their income to go back to pre-crisis levels, with a quarter indicating this will take more than two years.

Daniel Fluskey, head of policy and external affairs of the Chartered Institute of Fundraising, said the findings show just how challenging the situation is for charities across the country.

“The stark figures on reduction of services and job losses are of real concern and will have a real impact for the people, families, and communities who rely on charities every day,” Fluskey said.

“At a time where so many people are struggling, we are seeing charities’ ability to help them severely reduced, not just in the short-term, but over the months and years ahead.”