Assessing financial vulnerability and risk in the UK's charities during and beyond the COVID-19 crisis

This research will provide an analysis of the variegated impacts on charities of the very severe financial constraints they will experience due to the immediate and longer-term economic effects of the COVID-19 crisis.

Project overview

We know that the lockdown will have immediate effects on the fundraising and trading activities of charities. We also anticipate that the economic recession will both increase social needs for the services of charities while simultaneously undermining household incomes, and therefore levels of donations. We want to know which organisations are likely to be most vulnerable to these events.

There is an urgent need for evidence on this. A DCMS Select Committee report (published 6.5.20) highlights limitations of the existing (somewhat anecdotal) evidence base, and notes the ongoing requirement for robust evidence to inform efforts to stabilise the charity sector.

Building on our extensive prior research on the finances, distribution and exposure to risk of charities we will assess the distribution of financial vulnerability across the population of charities, showing how it varies according to organizational characteristics.

Following international literature on this topic, we will construct indicators of financial vulnerability (disruption to finances; excess of expenditure over income; shortages of reserves; fluctuations of particular income sources) and relate these to organisational and community characteristics.

Using these analyses we will produce indicators and guidance which will inform decisions by stakeholders as to which organisations require support. Working closely with long-time collaborators the National Council for Voluntary Organisations, we will generate accessible presentations and graphical materials which can be used by stakeholders to inform responses to the crisis. We will run events – most likely on-line – which will provide a basis for discussion and reflection on the findings.

The project will run from 2020 - 2021.

Project team

David Clifford

David Clifford is Associate Professor in Demography within Economic, Social and Political Sciences at the University of Southampton. David has research interests at the interface of demography and social policy. His research on the voluntary sector describes patterns in the prevalence, funding, and growth of voluntary organisations.

Alasdair Rutherford 

Alasdair Rutherford is Professor of Social Statistics at the University of Stirling. His research focus is the analysis of administrative and survey data in the fields of health, social care and the third sector. He has also been involved in a number of initiatives to build data analysis skills amongst third sector practitioners.

John Mohan

John Mohan is Professor of Social Policy and Director of the  Third Sector Research Centre  (TSRC) at the University of Birmingham. He has worked on academic studies of voluntary action and voluntary organisations for over 25 years and in recent times has overseen the development of TSRC’s quantitative contributions to the evidence base on the voluntary sector in the UK.

 

The National Council for Voluntary Organisations are collaborating with the project team; we have worked with their research team for many years on the evidence base for the third sector, including on the construction of quantitative datasets about voluntary organisations.