One in six charities believe it is likely that public spending cuts and falling donations may force them to close next year, a survey has discovered.
Two-fifths (40 per cent) fear their charitable organisation will fold if the economic situation does not improve, according to the online poll of 252 senior charity workers for the Charities Aid Foundation (CAF).
It is not just falling donations from the general public that are causing problems, with the total value of charitable donations worth £1 million or more falling to its lowest level since 2007, a report showed today.
The dire outlook comes as just under half (49 per cent) have had to dip into their reserves to stay afloat this year while more than a quarter (26 per cent) have cut frontline services and one in four (25 per cent) have shed staff.
John Low, chief executive of the Charities Aid Foundation, said: “Times are tough and people have less money to donate to charities.
“This, combined with significant public spending cuts and increased demand for charity services, is having a shocking effect on many charities, calling into question their very viability.
“Many organisations are having to dip into their reserves, cut vital frontline services and some are even concerned about whether they can survive in these toughest of times.”
The foundation called on the Government to ensure public bodies do not “disproportionately” cut funding for charities when making savings.
It also implored businesses and the public to support charities, either through giving or practical means.
Charities also face problems as philanthropy falls – there has been a fall of £400 million in the past five years, a report from Coutts reveals today. More than £1.2 billion was raised through UK charitable donations of £1 million or more in 2010/11, according to the Coutts report. That was down significantly from the pre-financial crash total of more than £1.6 billion in 2006/7.
But the number of £1 million donations has increased from 193 to 232 over the same period, suggesting donations are generally getting smaller.
A higher proportion of philanthropists (60 per cent) were giving money to charities rather than charitable trusts, the report, produced in association with the University of Kent, showed.
There has also been a big increase in the number of £1 million donors, with 130 different donors identified, up from 73 the previous year.
This figure includes individuals, charitable trusts, foundations and corporations, some of whom made more than one donation worth £1 million or more.
Higher education, arts and culture and international development remain the most popular destinations for the largest gifts among donors.
But support for environmental causes also increased in 2010/11, and all types of charities attract some support from £1 million donors, according to the report.
There was a wider spread as 191 organisations received £1 million donations, compared with 154 in the previous year.
Organisations that received multimillion-pound donations tended to be the oldest universities, such as Oxford and Cambridge, or national arts and cultural institutions.
The most frequent size of donation is worth exactly £1million, indicating that “giving a million” has both economic and psychological significance for donors, and is the size of gift that establishes a donor among the “top rank” of UK philanthropists, the report said.
Maya Prabhu, executive director of philanthropy services at Coutts, said: “It’s extremely encouraging for the development of UK philanthropy to note that this is the highest number of donors and donations since we began compiling this report in 2008.”
Dr Beth Breeze, from the centre for philanthropy at the University of Kent, and co-author of the report, said: “Before we started this annual study of million pound donations, there was no clear understanding of the scale, role and significance of the largest philanthropic acts in the UK.”