A survey of third sector (charity and voluntary) organisations has shown that 87.9% of charities have been negatively impacted by the COVID-19 pandemic. The fears of leaders of third sector organisations grew as the pandemic progressed. —
When the pandemic began and various restrictions came along with it, it had a significant effect on charities and not-for-profit organisations. With income declining and business slowing, charities had to find ways to survive. However, even with support from the Government, which many felt was offered too late, charities all over the country have had to brace for disaster.
Third Sector Organisations are at Risk of Collapsing
Third sector organisations that have been affected by the pandemic are at risk of collapse. One of the primary issues is the nature of funding within the sector, with many organisations raising funds for individual projects. This leads them to be cash-poor, often with no more than three months funding at a time. Charity leaders have been feeling much less confident about their chances of survival after the coronavirus pandemic. The Chartered Institute of Fundraising says that £12.4billion will be required to make up the shortfall caused by the last year.
Adapting to Market Conditions post Pandemic
Some charities have made efforts to adapt and create a plan to persevere. They have made moves such as reallocating funds to online fundraising and other direct marketing efforts. Other organisations have cut their costs, closed offices and delayed new research grants, in addition to forecasting shrinkage of their organisations.
As the pathway to the end of lockdown in the UK is being followed, it is imperative that the third sector starts to move forwards. Charities and nonprofits must start thinking about how to recover and rebuild, strengthening their organisations.
As Head of Charities, Active Members Group – Kevin Lucas of Lucas Ross, Business Rescue, Recovery & Insolvency believes that planning is crucial. Having specialised in supporting Third Sector Organisations for over 20 years he believes many charities face an “existential threat” from the coronavirus crisis.
He says: “It can be difficult emotionally for a trustee of a charity or not-for-profit organisation that is failing. You may be struggling with the feelings you have for a great cause(s) you have worked so hard for as well as all the stakeholders connected with your business. It is uncomfortable to imagine yourself becoming the trustee who has had to take the hard decision to close.
"Now imagine yourself as the trustee who delayed seeking advice about your insolvent charity which led to the position being far worse. Facing the pressure of knowing that creditors were worse off would be one thing but also imagine the potential press or PR backlash to come from your actions. If you are a figure of high profile or are involved in several charities, this is especially relevant."
Lucas Ross, Business Rescue, Recovery & Insolvency helps third sector organisations to ensure they are not leaving it too late. Their business rescue services help organisations of all kinds to get back on their feet, and helps them to prevent negative publicity caused by insolvency.
Find out more about Lucas Ross Business Rescue on the company website: https://www.lucasross.co.uk/. For enquiries, please contact Philip Ross by phone on +44 03301289489, by email at email@example.com, or by writing to Head Office, Stanmore House 64-68 Blackburn Street, Manchester M26 2JS.
Name: Philip Ross
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Organization: Lucas Ross Business Rescue
Address: Head Office, Stanmore House 64-68 Blackburn Street, Manchester M26 2JS
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