One in ten charities may have to close next year
Funding cuts mean one in ten charities risk closure in the next twelve months
Research from the charitable think tank New Philanthropy Capital has found that charities are facing serious economic challenges. One in ten are at risk of closure, up to two thirds are having to cut front line services and three quarters intend to harness the power of volunteers to minimise the impact of cuts.
The research focused on the UK's top 750 charities and also found that almost three quarters were having to make staff redundant dues to significant funding cuts, up to 20% in some areas. 62% were having to rely on reserves to keep going.
The findings come as charities are due to face a new funding challenge following the Treasury's decision to cap tax relief for charity giving next year.
Commenting on the research Dan Cory, CEO of New Philanthropy Capital said "We already have anecdotal evidence that philanthropists are pulling out because they are both upset and angry that they are being compared to tax dodgers."
In addition commissioning policies by local government is squeezing many smaller charities out of being able to tender to deliver public services as commissioners opt to contract with bigger companies who they see as being able to provide savings with large scale operations. In response nearly 80% of charities plan to work more collaboratively with others which they hope will help them to get a look in on big government contracts.
Despite the funding cuts many charities are seeing a marked increase in demand for their services.