Charity leaders' confidence levels hit rock bottom

97 per cent of charity leaders expect economic conditions within the sector to be negative over the next 12 months, according to our latest Charity Forecast survey.

With the post-Budget fall-out still dominating the headlines, the survey suggests that confidence levels in the voluntary sector's financial future are at an all-time low.  Respondents also demonstrated low confidence in their organisation's general situation and finances and the UK economy as a whole. 

Commenting on the findings, Sir Stuart Etherington, our Chief Executive, said:

"This latest survey shows how the looming tide of cuts is weighing heavily on everyone's minds.  The Budget brought with it some welcome sweeteners for the sector, but more needs to be done to ensure that voluntary and community organisations have the support they need to continue providing vital services.

"In particular, we urge the government to address urgently the issue of charities not being able to recover VAT on shared services, which currently presents a sizeable obstacle to effective collaboration.  Giving charities the incentive to work together would really help many organisations to maximise their resources in these challenging economic times."

Nearly two-thirds of respondents (66 per cent) expected their organisation's expenditure to decrease over the next twelve months, an increase of ten percentage points since the previous quarter's report. And, in a trend which has worrying connotations for voluntary and community organisations' role within the Big Society agenda, 35 per cent plan to decrease the extent of services they offer during the next three months.

Over half (53 per cent) of respondents said that their organisation's financial situation had worsened over the past year. And 55 per cent said they planned to reduce staff numbers over the next three months, more than double the amount from December's report.

Other key findings from the quarterly survey include:

• 64 per cent of respondents felt that the general situation of their organisation would worsen over the next twelve months.  This is an increase of three percentage points since the previous quarter.
• 83 per cent of respondents felt that economic conditions within the UK as a whole will be negative over the next twelve months

NCVO voluntary sector members can download the full Charity Forecast report for free - it is also available to non-members to purchase from our online publications store.