Charity research in the recession

Today’s article in the Law Society Gazette (‘Charities may be in for a difficult year, but there remains cause for hope’) prompts me to report on the results of AMRC’s latest survey of its member charities and how they are faring in the recession.

As you may remember AMRC’s survey in March last year attracted quite a lot of media attention and we said at the time that we would continue to survey members at periodic intervals to inform our work to support members through the economic downturn but also to ensure a well-informed debate.  Our essential message on the back of the survey was that continued public and government support was vital to help medical research charities weather the storm and ensure life-giving research could continue.

Our latest survey conducted in October/November last year had a lower response rate (22%) than our March survey (54%).  However, my sense is that this is probably symptomatic of a more sobre charity view of the operating environment which is no less difficult but around which the headlines and hyperbole is less distorting.  Nonetheless we must place the usual health warnings on the results although I would say that they affirm the narrative we get from charities in our daily contact with them.

Our latest survey’s findings are as follows:

  • 68% of member charities who responded described the impact of the recession as ‘very significant’ or ‘significant;’ 28% described the impact of the recession as ‘not very significant at all.’
  • In terms of income, investments and corporate giving were quoted as the being most affected by the recession followed by public donations and legacies.
  • Member charities have employed a number of tactics to mitigate the impact of the recessions including: co-funding/collaborative partnerships (29%); decreasing the number of awards (19%); decreasing the amount for new awards (19%) or; delayed new initiatives (14%).  A number have adopted more than one of these tactics.
  • 54% of member charities said that they had not changed or revised their funding profile or streams as a result of the recession.  However, of those charities that had, most (35%) cited project grants as the focus for any change in approach.
  • Looking ahead to the new financial year (2010-2011), 63% of charities expect to keep their research expenditure at the same levels as this year, 21% plan to increase research funding and 8% plan to reduce their funding.

Two quick compare and contrast points about the two surveys we have conducted.

First it is interesting to see that a number of members have gone down the co-funding or partnership route.  You may recall that in our first survey almost two-thirds of charities said they were looking at this as a strategy and it would seem that some have followed through on the idea.

Second, as regards member forecasts for expenditure it is worth recalling that in the March 2009 survey one tenth of member charities who responded (9.3%) said they expected to increase their funding in 2009-2010, approximately half (51.9%) planned to keep research funding at the same level as the previous year, and a quarter (25.9%) planned to reduce their funding.

Our latest results suggest a slightly more optimistic outlook than nine months ago but it is far too early to assume that the sector is through the worst.  I was struck, for instance, by the member who told us: ‘We will do our best to maintain this level of commitment in the coming years. But it is by no means certain that this will be possible and we may need to reduce our funding level if our income drops further.’

None of us are out of the woods yet and the real unknown for charities as for many other organisations is how public funding cuts following a general election will affect them directly or indirectly.  Some may not be exposed that much to the fallout, but others – such as those who provide care services as well as funding research – will find a new harsh wind blowing through the wood.

As for any other sector contributing to the UK economy there are lots of factors that contribute to ‘business confidence’ and the unpredictability of what might lie ahead is key.  But given what we do know I see no reason to change our message to donors or government: “we need your support, now”.

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