Economic Downturn

NCVO's research into the economic downturn

Counting the Cuts

Counting the cuts: The impact of spending cuts on the UK voluntary and community sector (PDF 2.8MB) offers our best estimate of where, how, and how much the cuts from Government in public spending already are and will continue to impact our sector. The report contains key information about the impact public sector spending cuts will have on the voluntary sector from 2011-2016. Here are some key figures:

• The UK voluntary and community sector will lose around £911 million a year in public funding by 2015-16.
• This means voluntary and community sector stands to lose £2.8 billion from Government over the current spending review period running from 2011- 2016.
• These are likely to be conservative estimates based on analysis of the Government’s own figures published by the Office of Budgetary Responsibility. The figures assume that cuts with be made proportionately, they provide us with a solid baseline figure to measure any further cuts against.

Read the full report

Browse our advice sector on how to cope with the cuts.

Recession Summit

NCVO held the third recession summit with the Office of the Third Sector on Thursday 21 January 2010. This summit brought together sector leaders and the Minister for the Third Sector, Angela Smith to discuss the impact of the recession on the community and voluntary sector and respond to the Government's Action Paper.

 View Karl Wilding's presentation 'Recession and the Voluntary Sector: a short evidence review' (PPT 668KB)

The impact of the recession on charitable giving in the UK

This briefing paper complements UK Giving 2009 which can be downloaded below.

Key Findings

•In the UK over half the adult population (54%) continue to donate to charity in an average month.
•The total amount of charitable giving has declined during the recession, down by 11% from 2007/08.
•The recession has had a similar impact in the United States, where charitable giving declined by 6% between 2007 and 2008.
•Historic evidence suggests that the length and severity of a recession will impact on the levels of charitable donations, but that not all causes will be affected equally.
•Legacy donations have decreased in value during the recession, although there has been an increase in the number of legacies received.
•Individual motivations for charitable giving go beyond personal finances: charities should continue to ask for support during an economic downturn.

Download The impact of the recession on charitable giving in the UK (PDF 114KB)

Read more about charitable giving

Economic downturn and the voluntary and community sector

On Tuesday 25 November 2008 NCVO hosted a summit bringing together 25 sector leaders and government representatives to discuss the economic crisis and its impact on civil society. Karl Wilding, Head of Research at NCVO gave a presentation at the summit and produced a paper.

• Read the presentation (PowerPoint 751KB)
• Read the full paper (PDF 92KB)
• Notes from the recession summit (PDF 28KB)

The NCVO research team found a generally thin, conflicting evidence base which leads us to conclude that any impacts are mixed: some organisations will fail; others will emerge stronger; some sectors will face increased demands, others fewer. Some income sources and costs will decline; others will increase. Evidence suggests the sector is relatively poorly capitalised and in the short-term mid-sized organisations in particular are financially vulnerable.

Government funding (grants/contracts) and donations/purchases from the public are crucial to the ability of the sector to emerge from any downturn: they account for three-quarters of total income. Evidence suggests philanthropy is relatively resilient; therefore, the funding practices and policies of statutory contractors and funders will have a major say on the health of the sector.

Key findings from the paper

• The sector's total income does not necessarily decrease in economic downturns. 
• The sector's assets are held by a relatively small number of organisations, mostly foundations. Therefore, many VCOs will not be directly affected by falling asset values. However mid-sized organisations in particular have been unable to build surpluses and therefore reserves. These organisations in particular are susceptible to short-term falls in income.
• The largest organisations are more capable of resilience.  And smaller or less established organisations are the ones more likely to suffer hardship.
• VCOs do not have sufficient reserves to withstand an even relatively short downturn. Many medium-sized charities do not have enough reserves for 12 months.
• Government funding policies, practices and attitudes are crucial.
• Charitable giving from individuals does not fall in economic downturns but corporate giving varies with economic performance. 
• Some VCOs are cutting staff, but this may not be widespread. 
• Donors focus giving on existing recipients during downturns, implying that those organisations or sub-sectors already attracting widespread support will emerge stronger. 

More about the economic downturn

The research team has also bookmarked a variety of articles and papers about the economic downturn and it's relation to the voluntary sector on delicious.com. Visit the website to read more.