Assessing Financial Vulnerability and Risk in the UK’s Charities During and Beyond the Covid Crisis, 2020-2022
- URL
- https://doi.org/10.5255/UKDA-SN-855941
- Description
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We advise that users familiarise themselves with the reporting requirements of the regulators on whose data we have drawn for this work. Some variables are easily understood (headline income and expenditure figures, or dates of registration and dissolution); others less so (e.g. familiarity with definitions of the components of income which charities are required to report would be desirable for work on the exposure of charities to specific income sources). We carried out work on various aspects of the financial vulnerability of charities and charitable companies, as follows: 1. patterns of registration and dissolution, as measured by the dates on which these events are recorded by the regulators. 2. the extent to which organisations held reserves prior to the onset of Covid-19. We used measures of "unrestricted reserves" which are usually provided only for larger organisations and expressed these as a proportion of the organisation's annual expenditures; 3. financial vulnerability, expressed in various ways - substantial (over 25%) fluctuations in incomes, or fluctuations in the excess of expenditure over income; 4. exposure of organisations to particular income streams. We define these in "VariableDescriptions_covid19_project.doc", attached to this deposit. Note that for time series analyses, the Charity Commission website data on the incomes and expenditures of charities only contains data for relatively recent time periods; a longer time series providing charity financials from the late 1990s to 2012 is available in the Third Sector Research Centre data collection at https://reshare.ukdataservice.ac.uk/850933/ and we recommend this is linked to the current data from the Charity Commission. Financial histories are not available for as long a time period for Scottish charities since the regulator was not established until 2006. Other data of relevance to work on this project would be a publicly-available classification of charities at https://charityclassification.org.uk/ Charitable organisations largely fall into a small number of sections of the Standard Industrial Classification and as a result scholars have developed more granular schemas. the data at the above website are publicly-available and can be linked via charity ID numbers. Project papers describing the work in more detail are available at https://www.birmingham.ac.uk/research/tsrc/research/assessing-financial-vulnerability-and-risk-in-the-uks-charities-during-and-beyond-the-covid-19-crisis.aspx
There are significant public concerns about the impact of the economic consequences of COVID-19 for UK voluntary organisations. The lockdown has caused the cessation of income generation activities involving face-to-face contacts; it will be followed by longer-term impacts depending on the scale and duration of the post-crisis recession. The impact will be highly differentiated, between organisations of different missions and size, and between communities. Central and national government, funders, voluntary organisation infrastructure bodies, and organisations themselves require analysis of these impacts if they are to make informed decisions. The immediate needs are for understandings of: 1. exactly what sorts of funding streams are at risk, and how the reduction or cessation of that funding has differentiated impacts 2. the extent to which the economic impacts of COVID-19 will differ in magnitude and character from previous shocks to voluntary sector income (there is a baseline degree of fluctuation in organisations incomes and expenditures, but we anticipate the crisis will affect far more organisations); 3. ongoing differential impacts depending on the progress of moving out from lockdown. Our work will contribute to an improved evidence base, providing actionable information on the exposure to risk of charities, drawing on a growing volume of administrative and transactional data. This will provide more granular, policy-relevant data on the impacts of economic change on charitable organisations. In turn this will provide a firmer evidential basis for interventions such as targeted financial support for strategically-significant charities.
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- Sample
- Format
- Single study
- Country
- United Kingdom
- Title
- Assessing Financial Vulnerability and Risk in the UK’s Charities During and Beyond the Covid Crisis, 2020-2022
- Format
- Single study