One-third of charities say they will need to make redundancies within the next 12 months

July’s Charity Health Check shows no indication of financial recovery after Spring’s heavy losses. In addition, this month the survey included a new question (not used in calculating the score) to find out how many respondents think they will need to make redundancies over the next 12 months. 33% said they think they will need to make redundancies and a further 36% said they were unsure. At its worst, this would mean almost seven in 10 charities making redundancies within the next 12 months.

Read about last month’s results here

This is the fourth Charity Health Check, a monthly survey monitoring the financial health of a group of charities based in England and Wales. Charities were asked to consider whether, during the month of July, financial conditions have improved, deteriorated or stayed the same in five key categories

  • New business and donation income
  • Cashflow
  • Number of employees (FTE)
  • Reserves
  • Spending on front line service delivery (n=77)

July’s score was 48 out of a maximum 100, indicating a stable or unchanging environment. Because the Charity Health Check is a ‘rolling survey’ comparing this month to last, the overall trend data shows a marked decline in May followed by conditions staying approximately constant at this new, lower level.

Kristiana Wrixon, head of policy at ACEVO said: “It appears that the huge number of redundancy announcements we have seen over the last few weeks are just the tip of the iceberg. The chancellor has said he wants to protect as many jobs as possible, but with only 3 in 10 respondents saying they do not think they will make redundancies over the next 12 months, it is clear a lot more support is required to protect jobs so that charities can be there for all of us as we feel the impact of what is predicted to be the biggest global economic crisis for almost 100 years.”

  • Data was collected between 28 July and 3 August 2020 and findings relate to the previous 4 weeks.
  • Data covering the months of April, May and June.
  • All respondents were members of ACEVO and registered charities headquartered in England or Wales.
  • 85 respondents, of which 77 provide front line services.
  • Analysis conducted by Nick O’Shea, chief economist at the Centre for Mental Health
  • Questions to be directed to Kristiana Wrixon, head of policy, ACEVO – Kristiana.wrixon@acevo.org.uk, 07894 668508.

Specific results are:

New income and donations
Better28%
The same39%
Worse33%
Grand Total100%

Cashflow – a key measure of an organisations’ health and ability to pay wages and bills – stayed the same for 40% of organisations, better for 33%

Cashflow
Better33%
The same40%
Worse27%
Grand Total100%

Full-time staff remained the same for 68% of organisations (figures include furloughed employees)

Number of Full Time Staff
Better15%
The same68%
Worse16%
Grand Total100%

Reserves are the worse for 36% of charities and the same as last month, for 45%.

Reserves
Better19%
The same45%
Worse36%
Grand Total100%

Spending on frontline services is the same as last month for 53% of charitable organisations.

 Spending on Frontline services (N=77)
Better26%
The same53%
Worse21%
Grand Total100%
Do you think you will need to make staff redundancies within the next 12 months?
No31%
Unsure36%
Yes33%
Grand Total100%

Detail : The surveys ask five short questions requiring short answers – better, worse, same.  The PMI score averages those scores and is calculated as:

PMI Score = (percentage of questions that reported an improvement) + (1/2 x percentage of answers that reported no change)

So, if 100% of the questions were answered with an improvement, the score would be 100.

If 100% of the questions were answered with no change, the score would be 50.

This means that a score above 50 is good.  A score below 50 is a deterioration. 50 means no change.

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