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Supporting Scotland's vibrant voluntary sector

Scottish Council for Voluntary Organisations

The Scottish Council for Voluntary Organisations is the membership organisation for Scotland's charities, voluntary organisations and social enterprises. Charity registered in Scotland SC003558. Registered office Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh EH3 6BB.

Evidence library

Patterns of financial vulnerability in English and Welsh charities after the onset of Covid

Key finding: A quarter of charities lost at least 40 per cent of their income from 2019 to 2020 as the coronavirus pandemic hit.

This paper provides an assessment of the scale of changes in the incomes of charities after the onset of Covid until late 2020. Comparing measures of financial vulnerability with the previous experience of charities from 2000 onwards, it demonstrates how charity finances have become more volatile over the past decade, and shows that a significant minority of charities are experiencing financial changes of an order of magnitude not recorded previously in recent times. Using data on the distribution of awards to charities in response to Covid, it also shows that these were not necessarily made to organisations experiencing the greatest financial difficulties.

Findings

  • In the past twenty years there has been a steady upward trend in the proportion of charities for which expenditure exceeds income by at least 25%.
  • This is particularly noticeable for organisations with incomes below £25 000. The recession of 2008-9 signalled a further upward shift in this indicator although this is less noticeable for organisations with incomes above that level. Early data for 2020 indicate a significant upward shift for organisations with financial years ending after the first Covid lockdown.
  • A typical charity reporting after April 2020 experienced a 15% real-terms reduction in income.
  • A charity at the 25th percentile experienced a reduction of over 40%. These are figures of a different order of magnitude than experienced at any point in the past twenty years.
  • The latter figure means that one quarter of organisations had lost two-fifths of their income from 2019 to 2020.
Last modified on 29 August 2022