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Charities weathering economic storm

PUBLISHED: 09:03 18 March 2009 | UPDATED: 13:21 03 July 2010

EAST Anglian charities are weathering the storm of recession thanks to local support but fear for the future it was revealed yesterday, as a national report says one in three has already taken steps to combat the impact of the economic downturn.

EAST Anglian charities are weathering the storm of recession thanks to local support but fear for the future it was revealed yesterday, as a national report says one in three has already taken steps to combat the impact of the economic downturn.

Charities face a double whammy as many find a higher demand for their services while donations are likely to drop - with six months from now likely to be the critical period for finances.

Experts believe prudence in the past is the saving grace of charities at the moment but fear donations could dry up as the recession tightens its grip.

Brian Horner, chief executive of Voluntary Norfolk, an umbrella group representing the sector, said: “Locally we think the recession will hit voluntary organisations in a few months time. I am certain some national charities have already seen a drop in funds from things such as direct debits. A lot of local organisations rely on a mix of grants and fundraising events but grants might not be given out in the future.”

A Charity Commission report of more than 1,000 charities in England and Wales shows about 52pc had been affected by the credit crunch, up from 38pc when similar research was carried out in September.

Nearly two-thirds of charities with an annual income of more than £1m also said that they were concerned that the economic problems would impact on the work they did.

One in three charities said they had taken steps to try to combat the impact of the downturn, with 14pc reducing their costs, 11pc increasing fundraising efforts and 6pc drawing on their reserves.

About 5pc also said they were holding off from offering new services, while 2pc had cut their staff numbers.

But only 3pc of charities said they had considered collaborating with another charity, and the same proportion had thought about merging.

Dame Suzi Leather, chairman of the commission, said: “Clearly the impact of the financial downturn on charities is widening and deepening.

“Some charities still face that double whammy of a drop in income as well as an increased demand for services.

“However, not all charities are putting measures in place to protect their work and their funds. It is very surprising that more charities are not considering collaboration with others, as this can help them share expertise and costs.”

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