Charities at risk as State and private funds shrink

MANY IRISH charities are struggling to cope in the face of an economic downturn which is squeezing fundraising and leading to unprecedented demand for services.

The Wheel, a support organisation for hundreds of charities, community groups and social enterprises, says the sector is under increasing pressure and expects to see significant changes over the coming years.

The larger groups with professional fundraising arms – especially those focused on international aid – are faring the best. However, it is the smaller groups which risk closure with shrinking State aid and fewer donations.

Deirdre Garvey of the Wheel says the bottom line is that many charities are now experiencing a “double whammy”. “Demand for many of their services has gone up and the supply of money from the State as well as through fundraising is going down. The sector will change significantly as a result over the next few years,” she says.

In all, there are an estimated 7,900 charitable, community and voluntary groups of all shapes and sizes scattered around the country. In many cases they help to deliver public services for children, older people and those with disabilities, ensuring that vulnerable people have a minimum level of income and have access to the type of supports that allow them to live with dignity.

State funding for this sector has, in general, been trimmed back sharply over recent years and generally at a faster rate than overall Government cutbacks. This means many charities are increasingly reliant on a public which has less money to give.

It is not all bad news, however. Many of the bigger charities actually managed to increase their fundraising last year, especially those in the international development sector. A report on fundraising in Ireland by the not-for-profit consultancy group 2into3 focused on just over 170 groups in 2010. It found that these groups recorded a 24 per cent increase in fundraising in 2010, though much of that was related to the Haiti earthquake appeal.

Despite the reported increase in fundraising, the charities’ accounts also show a squeeze on resources, with the gap between income and expenditure narrowing sharply over the past two years, except for international aid groups. The State was a key source of income for the sector, accounting for 34 per cent of total income, down on 2009.

“The data presents a challenge for many charitable organisations, as the recovery is not uniform and is led by increased donations to a relatively small number of organisations,” Dennis O’Connor, director of 2into3, told this newspaper earlier this year.

“The international development and health sectors dominate in terms of fundraising performance, with increased donations of 30 per cent. Donations to organisations providing a range of services to domestic clients increased by a much smaller amount in the order of 5 per cent.”

Despite the bleak backdrop, there is other encouraging news. Figures released earlier this month show that Ireland was ranked the most charitable country in Europe and the second most charitable nation in the world. The World Giving index, compiled by the Charities Aid Foundation, found that some 75 per cent of Irish people donated money to charity while almost 40 per cent volunteered their time each month.

If the recession has forced people to lose their livelihoods, it has also meant that many have more time on their hands. In fact, since the recession begun, there has also been an increase in volunteering as people have found themselves with extra time.

Latest official figures show that most people had regular contact with their neighbours, a quarter had done unpaid charitable work, almost two-thirds had taken part in voluntary activities and a similar number felt a strong attachment to their neighbourhood. As Yvonne McKenna, chief executive of Volunteer Ireland says, these results show that first and foremost we are a society, not simply an economy.