Three in five charities take advantage of furlough scheme, study reveals

More than three in five charities have furloughed staff as a result of Covid-19 disruption, a major study has revealed.

The figures form part of the weekly tracker by Pro Bono Economics (PBE), a weekly survey designed to assess the pressures and challenges faced by the not-for-profit sector.

According to the barometer, almost all (96 per cent) charities have taken “some form of action” in response to the financial challenges raised by the Covid-19 pandemic.

This includes 61 per cent of respondents using the Government’s job retention scheme, which pays up to 80 per cent of furloughed staff’s wages, including the employer’s national insurance and pension contributions.

Meanwhile, around 56 per cent of charities say they have “reduced their activity in a significant way”, while over half (52 per cent) have sought “funder flexibility” on their spending plans, project delivery and reporting requirements.

And while 44 per cent have drawn down on financial reserves, just a quarter (23 per cent) have applied for financial support via the Government’s £750 million emergency capital finance package.

The study also reveals that over nine in 10 (94 per cent) charity leaders believe the pandemic will have a “negative impact” on their ability to meet objectives over the next six months.

Commenting on the report, Matt Whittaker, chief executive of Pro Bono Economics, said: “The charity sector is accustomed to working under pressure, but these latest results highlight the new pressures it is now having to deal with as a matter of course.

“Many organisations, both small and large, say they are in grave danger of falling through the cracks and that their long-term survival is at threat. Smaller charities feel that financial support is only being channelled to larger organisations, while larger charities say that there is a disproportionate – if understandable – focus on front-line services dealing directly with the Covid-19 crisis.”

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