Open All Hours? Charity Closures in the UK 2024
Summary
The number of charities removed from the register fell from 5,918 in 2022 to 4,522 in 2023. However, a survey by Charity Excellence found that 4% of charities feel they may have to consider closure, and warned of a high risk of widespread charity closures across the sector. There have also been specific examples of charity closures in 2024, including Age UK West Cumbria, Jo’s Cervical Cancer Trust and Glasgow East Women's Aid. Closures are affecting large and small charities alike. There has been a £13.2bn reduction in council funds to charities since 2010. Charities use £2.4bn of their own funds to subsidise a shortfall in public sector contracts each year.
Background
Over 168,000 charities appeared on the Charity Commission’s register as of March 2023. And between March 2023 and January 2024, another 1,000 charities have been registered.
However, the full size of the sector is unknown, since only not-for-profits with a gross annual income of £5,000 or more have to register. It’s difficult to know exactly how many extra, unregistered charities there are in the UK but it’s estimated there are between 80,000 and 100,000 across England and Wales. Plus, as many as 20,000 organisations that aren't generally regarded as charities also have charitable status in the UK – like private schools, churches, and museums.
UK charity sector statistics & key facts
The UK had 168,893 registered charities in March 2023. A figure which is very similar to that recorded in April 2022 (168,961) with 132,000 charities in England, 7,000 in Wales, 19,000 in Scotland and 4,000 in Northern Ireland
The Charity Commission received 8,583 applications to register a charity in 2022/23, 48% of which were successful. In the same period, 4,146 charities were removed from the register.
During 2023, 396 charities applied to OSCR for consent to dissolve. This is a slight increase on the 373 that applied to dissolve in 2022.
The total income of registered charities in 2022/23 was £88 billion.In the same period, charities spent £85 billion.
Micro charities and small charities (defined by an income less than £10,000, and £10,000 to £100,000 respectively) make up more than 80% of the sector. Smaller organisations have declined in both number and proportion of charities over time.
Charity closures during the pandemic years of 2020-2022 were lower than initially predicted, despite the challenges posed by COVID-19.
The number of charities removed from the register fell from 5,918 in 2022 to 4,522 in 2023.
Data shows that 4,829 organisations in England and Wales registered as charities in 2023, up from 4,021 in 2022, while the number of charities removed from the register fell from 5,918 to 4,522 in 2023. There were 191 mergers in 2023, a sharp drop from the 1,588 registered in 2022.
Charity registrations in England and Wales have increased after dipping to a 33-year-low, according to Charity Commission data.
Why the closures?
There has been a £13.2bn reduction in council funds to charities since 2010, according to newly published findings. Research by Pro Bono Economics (PBE) and Nottingham Trent University suggests that further cuts to services can be expected and even closures announced by charities in the coming months.
Charities use £2.4bn of their own funds to subsidise a shortfall in public sector contracts each year, according to new research from a think tank. Responding to a survey by New Philanthropy Capital (NPC), 62% of charity leaders said their organisation uses money from other sources such as fundraising to deliver public services for which they have been contracted.
Four councils have gone bust in the past year while others said that only with drastic cuts can they avoid imminent insolvency in the face of soaring social care, homelessness and special educational needs costs. Charities fear community grants are seen as a priority for cuts as town halls retreat to bare legal minimum levels of service.
There's no doubt that the spending down of endowments as an emerging strategic shift amongst some major trusts and foundations is affecting the UK charitable sector. A few specific examples on spending down include the Albert Hunt Trust, Lankelly Chase Foundation, The Foyle Foundation alongside those that are under review including Henry Smith and The Tudor Trust.
Closures so far in 2024
Small, and medium-sized charities are currently the most likely to close. Charities with an income under £1 million accounted for over 97 per cent of charity closures for each of the last 10 years.
A brief search highlighted the fact that smaller, local charities across various sectors like childcare, mental health, and support for older people are particularly vulnerable to closure amid the cost-of-living crisis, rising operational costs, and funding challenges. Closures reported to date in 2024 include;
Age UK West Cumbria, a charity with around 50 staff and 90 volunteers supporting older people in the area, announced its closure at the end of May 2024 due to financial challenges (Total income 31st March 2023 £1,481,005)
Ethos Group Oswestry a health charity supporting people with spinal injuries, announced it will close in April 2024 due to dwindling finances and staff shortages (Total Income 31st March 2022, £156,417. Currently 131 days late reporting)
Kids and Adults Together in Glasgow, a charity providing childcare and community services, is set to close in April 2024 after its funding application was rejected.
The British Youth Council to close after 75 years supporting young people due to “ongoing financial challenges (Total income 31st March 2022 £825,671)
National LGBTQ+ charity, Opening Doors, announced closure due to insolvency (Total income 31st March 2022 £616,749)
The Inter Faith Network, a 37-year-old interfaith charity, said it is preparing for "imminent closure" as the government considers withdrawing £155,000 in funding over concerns about one of its trustees connected to the Muslim Council of Britain.
Glasgow East Women's Aid were given no notice of the domestic abuse charity's sudden closure in February. The charity cited mismanagement as the reason for closing.
Sea Sanctuary in Cornwall, which delivers therapeutic sailing programmes, announced its closure at the end of January after running an unsuccessful emergency appeal to prevent its closure.
Jo’s Cervical Cancer Trust announced its closure in May 2024 due to facing “insurmountable” financial challenges (Total income 31st July 2022 £1,360,286)
The Donkey Sanctuary plans to close four of its sites with redundancies expected due to financial pressures.
35-year-old charity, International Refugee Trust (IRT) said it had been unable to generate sufficient funds quickly enough to remain viable and decided to close.
Care Collective (TCC), previously known as Carers Trust South East Wales, said it would close permanently in March
London-based Against Violence & Abuse (AVA) is reported to be winding down in February (Total income 31st March 2023 £1,200,209)
162-year-old charity The House of St Barnabas who supported people affected by homelessness announced its immediate closure in January
Also in January Autism Understanding Scotland (AUScot) announced it will be closing its doors after the Scottish government cut its funding
40-year-old charity in Scotland Right Track Scotland entered liquidation after reporting “significant” financial losses last year due to a delay in EU replacement funding.
North-east based disability charity, Bliss=Ability, closed in March after 30 years due to a lack of funding.
40-year-old charity Cancer Support Scotland announced its closure in June. A combination of rising costs, challenging operating conditions and a reduction in fundraising income over the last few years led to this decision.
Down but Not Out
Some 12% of charities are reducing staff numbers as more are turning people away due to the cost-of-living crisis, according to new research by the Charities Aid Foundation (CAF). According to the survey, 50% of charities were operating at full capacity, down from 53% in CAF’s previous report published in October.
This month the suicide awareness charity, the Campaign Against Living Miserably, made 15% of its workforce redundant. Calm, which supports people – particularly men – affected by suicide, said it had made 10 of its 63 staff redundant as part of a organisation-wide restructure. Simon Gunning, chief executive of Calm, said the restructure came as the organisation faced a drop in its income, higher costs and huge increases in demand.
Those also announcing redundancies this year include;
Largest trainer of dogs in country, Guide Dogs UK, is trying to prevent an estimated £20m funding gap opening up by 2026 as it plans 160 redundancies. The charity blamed Covid and the cost of living crisis: veterinary bills have increased by almost 20% and pet food bills by 12% since 2023, with further increases expected.
Macmillan Cancer Support, one of Britain’s biggest and best known charities, is planning to axe 150 jobs – one in 14 of its workforce – saying that it is getting harder to raise money to cover rising demand for its help due to increasing numbers of people living with cancer.
Homelessness charity Crisis has proposed a restructure of its services, which could see more than 100 roles made redundant, due to financial pressures. -
The Christian development charity Tearfund is cutting its internal policy work as part of restructuring activity that will mean about 10 per cent of its staff have been made redundant over the past year.
Let’s not forget, (thanks for the reminder Rachel Beer), that the UK hospice sector, which supports 300,000 people annually, is facing a collective estimated deficit of £77 million in the financial year 2023-24.
The way forward
The National Council for Voluntary Organisations (NCVO) stated that they are "continuing to call on the government to provide further targeted support for organisations that are struggling to keep up with increased costs." This suggests the government has not provided sufficient support to prevent charity closures amid the cost-of-living crisis.
A report by the Centre for Social Justice urged the next government to reserve a proportion of public funds as grants for grassroots charities, stating that smaller charities account for 97% of charity closures in the last 10 years. It highlighted the widening gap between large and small charities since the pandemic.
Chief executives of major UK charities have shared their thoughts on how the ongoing cost-of-living crisis could affect organisations deciding to merge or close down.
This briefing note has been developed with Perplexity and Gemini AI with an old fashioned dose of trawling through the news archives of Civil Society.
Further Listening
https://www.civilsociety.co.uk/news/civil-society-launches-pilot-podcast.html
Sources
https://www.thinknpc.org/resource-hub/state-sector-2024/
https://www.oscr.org.uk/news/charity-lifecycles-dissolution-and-evolution/
https://www.civilsociety.co.uk/news/smaller-charities-underfunded-and-overlooked-by-commissioners-says-report.html
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