January 11-18 Covid Charity Tracker Survey results 2020 was a tough year for charity fundraising. With events cancelled and shops closed for a substantial portion of the year, many normal income streams were compromised. In our previous Covid Charity Tracker reports, PBE found that charities are facing serious financial challenges, as well as a period of heightened need for their services. For around a third of charities, the winter holidays are an important fundraising period with seasonal public appeals going out, festive events being held and retail activity picking up through sales of Christmas cards and gifts. But with social distancing restrictions preventing many of these activities taking place, winter fundraising opportunities last year were more limited than usual. In this flash survey, we asked charities to reflect on fundraising over 2020 and the Christmas period in particular. We found that despite unprecedented economic challenges, over 2020 almost one in four charities saw their incomes increase from the year before (Figure 1). This could be from government and foundations stepping in to make up income lost as a result of social distancing - previous Covid Charity Tracker results found that grants (from government, trusts and foundations) were one of the few income streams where more charities saw an increase since the start of the crisis - or from public generosity. Previous research by CAF identified that the British public gave an additional £800 million to charity in the first half of 2020, compared to the year before. Much of this went to health related charities such as hospitals and hospices. However, the overall picture shows many charities saw their income decline in 2020. Almost half of charities saw a decrease in their income in 2020. More than twice as many charities saw their income decrease than increase. 16 per cent reported no change. Figure 1. Half of charities saw their income decline in 2020 Proportion of charities seeing decreases/increases in income in 2020 compared to 2019, by organisation size (with net balance) Notes: Residual is “about the same” and “don’t know”Source: PBE survey, 11-18 January 2021. n = 248 of which 156 larger charities (pre-Covid annual income of £500k+) and 91 smaller (pre-Covid annual income of <£500k) Moreover, the sums lost by those charities facing declines far outweighed that gained by those whose incomes increased. Four in ten charities saw their income fall by more than 10 per cent and, as Figure 2 shows, nearly a quarter of charities saw their income fall by more than 25 per cent. Conversely, increases tended to be much smaller, with just one in 20 charities reporting increases of more than 25 per cent. Figure 2. The magnitude of income declines far outweighed income gains Size of decrease/increases in income between 2019 and 2020, all charities Note: Residual is “about the same” and “don’t know”Source: PBE survey, 11-18 January 2021. n = 248 Christmas is a particularly important period for charities doing fundraising. Just under a third of charities receive a disproportionate share of their income in November and December, with one in five usually taking over a quarter of their yearly income in these two months. The fact that 46 per cent of charities saw their fundraising over the winter period decline in 2020 relative to 2019 is therefore especially concerning (Figure 3). Only one in four (26 per cent) charities reported a year-on-year increase. Figure 3. Almost half of charities saw their winter fundraising decline in 2020 How much total income did you raise in November and December 2020, compared to the same period last year? Note: Residual is “don’t know”Source: PBE survey, 11-18 January 2021. n = 248 As a result, PBE estimates that charity losses over the winter period are likely to amount to at least £200 million. While charities reported a reduction overall, the outcome was driven primarily by their experience in relation to income from Christmas/winter fundraising events and from retail income (from charity shops and online sales). As Figure 4 shows, around one in four charities reported falls in income from these sources. Just one in 20 charities said they’d made more income from these sources compared to the same period in 2019. In contrast, more charities reported an increase in income from appeals than reported a decrease. The implication is that the public responded generously to calls for help, but that this was more than offset at the aggregate level by the cancellation of events and closure of shops. Figure 4. Retail and events winter income took a big hit in 2020, but fundraising appeals performed better than the previous year How much did you raise in November and December 2020 in the following activities compared to last year? (with net balance) Note: Residual is “no change”, “don’t know”, and charities which did not receive income from these sources in 2019 and 2020.Source: PBE survey, 11-18 January 2021. n = 248 Looking at the size of the increases/decreases in income, the magnitude of events and retail income declines were significant. One in six charities reporting losses of over half of their winter income from these sources, compared to 2019. Christmas/winter fundraising appeals were a mixed picture, with nearly one in 10 charities generating more than 25 per cent more income in 2020 than in 2019, but a similar number seeing this income more than halve. Figure 5. One in six charities saw winter income from events and retail more than half, though one in ten saw their appeals income increase more than 25 per cent How much did you raise in November and December 2020 in the following activities compared to last year? Note: Residual is “don’t know” and charities which did not receive income from these sources in 2019 and 2020.Source: PBE 11-18 January 2021. n = 248 We asked charities who had raised less income over winter 2020 what impact they expected this to have on their organisation. Figure 6 presents the results. It shows that almost two fifths (39 per cent) said that they would be seeking additional funding, while a quarter (25%) said they would need additional cost saving measures. There are also implications for service delivery, both in the immediate and the longer terms: just under a fifth (19 per cent) said they would reduce staffing temporarily (for instance, through the furlough scheme) or permanently, and over a quarter (27 per cent) reported that they would be less sustainable over the long term. Only one tenth (10 per cent) said they did not expect there to be an impact from the income hit. Figure 6. Over a quarter of charities who saw their winter income decline expect to be less sustainable in the long-term as a result If you raised less income in November and December 2020 compared to last year, what impact do you expect this to have on your organisation? Notes: responses of charities who reported income losses in November and December 2020, compared to the same period in 2019Source: PBE survey, 11-18 January 2021. n = 248 While 15 per cent of charities whose winter income declined expect this to impact their delivery capacity in the coming months, the cumulative impacts of 2020 driving up demand for charities’ services and hollowing out delivery capacity, point to serious delivery challenges in the year ahead. Four in ten charities (42 per cent) do not expect to be able to meet demand for their services in the first quarter of 2021 (Figure 8). Figure 7. Four in ten charities don’t expect to be able to meet demand in the first quarter of 2021 What do you expect to happen to demand for your services over the first quarter of 2021, compared to the last quarter of 2020? Note: Excludes “don’t know”Source: PBE survey, 11-18 January 2021. n = 248 As Figure 7 highlights, while many charities expect demand to increase in the coming months, only a small proportion expect their delivery capacity to decline - suggesting that any impact from loss of income over winter may take some more time to feed through into challenges for their service delivery. But income losses experienced over the winter add pressure to organisations that were likely to have been hit hard by financial challenges throughout 2020, and that were already struggling with increasing demand and reduced capacity. While our survey shows a mixed picture of how charities have been impacted, it is clear that many are starting 2021 from a difficult position.  A Martin and A Kenley, “PBE Covid Charity Tracker results”, Pro Bono Economics, Charity Finance Group and the Chartered Institute of Fundraising, September 2020.  CAF, “UK Giving and Covid-19: A Special Report”, Charities Aid Foundation, October 2020.