27th February 2012 - Charities feel the strain as economic downturn continues.
London, 27th February 2012
A new survey commissioned by Charity Bank has revealed that more than 20% of charities have suffered from the cancellation of contracts with businesses and government bodies during the last year. A further 25% of charities with contracts reported that lengths of existing contracts have been shortened within the past 12 months. The research, conducted by CTT in January and February this year, polled 386 charity workers across the UK. It exposes the difficulties that charities are facing as cash strapped businesses and government organisations struggle to fulfil business agreements.
It has been suggested that government measures launched almost a year ago, to help charities win government contracts, may not be working. The scheme, supported by David Cameron, had included the launch of a new online facility, Contract Finder, with details of public sector contract opportunities. It had been put in place to enable charities and smaller organisations to compete for billions of pounds worth of central and local government contracts. The government had also pledged to make the procurement process more transparent, with less paperwork and bureaucracy.
As budgets are tightened, 36% of charities reported increased monitoring of spending and performance with regards to government and statutory funding in the past 12 months. The survey also shows that charities’ cash flow is being squeezed as they are being forced to wait longer for funds to be received. The types of payment affected include public sector earned income (24% of relevant respondents indicated that payments were taking longer), public sector grants (22%), trading (25%) and trusts, lottery and foundations (25%).
Charity Bank is using these findings to review how it can best serve the charity sector in very tight economic conditions.
“Not so long ago charities and social enterprises were encouraged to engage with government and business as a key to sustainability,” commented Malcolm Hayday, chief executive of Charity Bank. “But now we are seeing the effect of the economic crisis in cancelled contracts and tighter trade terms for organisations whose bargaining position has never been as strong as the role they play in society.”
About Charity Bank
Charity Bank is a UK regulated bank that is also a registered charity. It lends to charities, social enterprises and community organisations, including those that would find it difficult to secure funding from the traditional banking sector. It invests its depositors’ money in supporting charities and enterprises that benefit society and publishes details of every loan that it makes.
Charity Bank is committed to transparency and community involvement. It provides hands-on support to the businesses and charities it lends to, as well as encouraging its own staff to volunteer within the community. Charity Bank’s innovative approach to banking and its mission to benefit society have enabled it to lend over £165m to charities and social enterprises, touching the lives of 3.5 million people in communities across the UK. www.charitybank.org
About Charity Technology Trust (CTT)
CTT is an impartial, non-profit-making organisation which provides the charitable sector with information technology and support services including hardware, software and support for e-mail marketing and online payments systems. Nearly 12,000 charities across the UK are registered with CTT to receive technology donations of hardware and software. CTT is the only UK registered charity devoted to improving the operational efficiency of charities through the use of information technology.
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