Cost bases in charities have come under pressure during the pandemic but there have been some savings and reserves have not been drained. Jonathan Orchard, partner at Sayer Vincent, considers the financial challenges facing the charity sector
If we did not already realise it then it should now be very apparent – the charity sector is hugely diverse. Compare a museum with an international aid charity; or a hospice with a professional membership body; or a medical research charity with a leisure centre. Pretty much the only thing these organisations have in common is that they are (most likely) all charities. How they generate their income, their models for delivering their charitable work, much of their regulation and their likely size and complexity are all very different.
Consequently, the impact Covid-19 has had on these different organisations has understandably been hugely varied. In the first lockdown in the spring of 2020 there were headlines about the potential levels of income loss to ‘the charity sector’ and the prospect for widespread financial failures. The actual picture one year on is much more complex.
B
