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.

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.