Public Spending Cuts Could Reduce Charities' Income by £5 billion

A report from the think tank New Philanthropy Capital (NPC) is warning that charities could be facing cuts in income of between £3.2 - £5.1 billion as a result of the public spending cuts.

NPC’s Preparing for Cuts report estimates that nearly a quarter of charities in the UK are funded by government: 13 per cent get over half their income from Government, and for some this figure rises to more than 90 per cent. Total Government funding to the voluntary sector amounted to £12.8 billion in 2008/2009, a third of the sector’s income.

The Coalition Government plans to cut public services by 25 per cent to 40 per cent. NPC therefore expects the sector’s income to drop by between £3.2 billion and  £5.1 billion,  too big a gap for trusts and foundations or funding from the public and philanthropists to fill. To weather this storm and adapt to the changing circumstances, charities will need support from non-Government funders.

In the report, NPC looks at how funders can respond to these changes and support charities through the challenging times ahead. Funding will be harder, and decisions tougher, it says, but practical measures can save time and money.

The report suggests that sharing knowledge with other funders, keeping in close touch with grantees, and choosing charities by looking for evidence of effectiveness can help funders to help charities maximise their impact.


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