Charities expect surge in demand for services

More than three quarters of Scotland’s charities and voluntary sector organisations expect demand for their services to rise next year, a survey has revealed.

But at the same time, almost a third expect the amount of cash they have to fall, while just over a quarter believe their income will rise.

The findings were contained in a report by the Scottish Council for Voluntary Organisations (SCVO), which warned that “meeting this increased demand and higher spend may prove challenging”.

The SCVO surveyed 268 organisations on what the coming year will hold for them and the sector.

A total of 77% expect demand for their services to grow, while 60% anticipate their expenditure will increase in the next 12 months.

But only 27% of charities surveyed believe their income will increase next year, while 30% expect the amount of money they have to fall and only 22% expect to have more paid workers.

This means that few charities “will have any additional capacity with which to meet the anticipated increase in demand”, the SCVO report said.

“This pattern of increased demand coupled with no corresponding increase in income and staff has been a key feature for the third sector in recent years.”

Almost four out of 10 charities (38%) reported they were unable to confidently plan ahead, given their current funding arrangements, while just 8% said they could plan more than three years ahead.

The SCVO highlighted this as a ” serious issue for the sector, as a lack of long-term funding makes it harder for the sector to deliver better outcomes and more sustainable public services for Scotland’s communities”.

While 70.6% of charities said they were planning to develop new projects in the next 12 months, 10.5% said they were looking to close some services or projects, and 18.4% are looking to restructure in 2014.

Just over a third (35%) of charities believe their financial situation will worsen next year, while almost six out of 10 (58%) believe the financial situation for the sector as a whole in Scotland will deteriorate.

While the SCVO said this “appears bleak”, the report added: “It does show a significant improvement on last year, when 81% thought the situation would worsen.”

The SCVO said: ” Once again, funding is the stand-out issue for the coming year. It is clear that sustainable funding continues to be a real challenge for our sector, which damages the third sector’s ability to deal with long-term, complex problems as well as it might.”

Despite difficult economic conditions, 4 1% of charities and voluntary sector organisations grew in size during 2013 – up from 31% in the previous year.

SCVO chief executive Martin Sime said: ” We are seeing a strengthening of the third sector in the face of a very challenging economic environment. More organisations are hoping to develop new services and extend current projects but this is being jeopardised by rising demand and funding shortages, with a lack of long term funding for charities further aggravating the situation.”

He added: ” Charities are showing great resilience and the ability to innovate and adapt quickly to meet challenges.

“The sector can make an even bigger difference to people’s lives if we take a more strategic and longer term approach to funding, so that charities can plan ahead and tackle generational issues around poverty and inequality. This means charities can make a real difference to the lives of even more vulnerable people and communities across Scotland.”