Charity Finances in Uncertain Times

The following is a guest post. Enjoy! 

Warning! The following statement may be entirely unsurprising: charities have been affected by the recession…badly.

A drop in income has been matched with a rise in demand for charitable services, after the government continues to cut important aid to vulnerable families and individuals throughout the world. Matched with job scarcity, the bedroom tax, and fewer welfare benefits, many people have found themselves leaning on charities that just don’t have the resources to support them.

Charities have been attempting to reduce costs, as a result of the recession, and many are boosting their fundraising efforts, in a bid to recuperate their losses. In order to keep humanitarian efforts running, staff members have been made redundant in many organisations. All the while, the number of people who need aid increases.

With such a large challenge ahead, a minority have considered joining forces, to ride out the recession storm. This is surprising, considering that pooling resources and skills can help keep charities healthy, during financially difficult times.

Although things got off to a good start at the beginning of the recession, the amount of individual donations has fallen in recent years by 20% (which accounts for a several billion Dollar reduction in funds for charities across the country).

As things stand, two out of five charities face closure by next year. One in three fear they will have to cut services, just when the public needs them most. The government is increasingly letting charities catch the public’s fall, but without support, these organisations don’t have the financial means of giving families the help they need.

In the coalition’s first few years of office, an additional 900,000 people fell below the poverty line, including 300,000 more children – all from working households. As the seventh richest country in the world, we’ve seen those living in poverty increase by almost one million. And charities are taking the strain.

 

What’s The Government Doing?

Charities largely rely on the financial support of the government, but with £5 billion cut from their third sector spending budget, not-for-profit organisations are struggling to balance the books.

As a result, the NSPCC has launched an emergency appeal, because levels of domestic violence have increased, while their income has dropped by 15%. Food banks have seen an unprecedented level of families needing aid, as many people drop below the poverty line.

The chancellor, George Osborne, has expressed a wish for the public to up their donations. He hopes that it will become de rigueur for people to leave 10% of their wills to charitable causes. The inheritance tax has also been lowered for those who leave money for not-for-profit organisations, from 40% to 36%.

However, with years of austerity grinding the public into the ground, and rising resource prices continuing to cause financial difficulty, can we expect the UK to dig into their pockets, when the state – that is responsible for the current levels of national poverty – continues to slash welfare and third sector aid.

How about you all? Has the recession since 2008-2009 affected the amounts that you donate to charity each year?

Share your experiences by commenting below!

***Photo courtesy of http://upload.wikimedia.org/wikipedia/commons/3/3c/Charity_work.JPG