Give and take

‘There is a paradox at the heart of charity finance. We’re not like a business that can reduce costs as income falls.’

Leslie Morphy, chief executive of homelessness charity Crisis, is in no doubt about the charity’s responsibility in a recession.

‘We must be on the frontline to meet the needs of an increasing number of homeless people.’

But meeting the growing demand for aid while coping with a fall in donations is a conundrum that the majority of homelessness charities are wrestling with. Shelter made 18 redundancies on 30 April this year, after a consultation period with unions.

Crisis took action after corporate donations fell £500,000 short of target from July 2008 to May 2009. Although it has not scaled down any services, it has been forced to make job cuts internally - for now it is refusing to say how many.

Crash, a charity which helps the building industry donate resources to renovate hostels and shelters, has also had problems.

‘We’ve lost a few patrons and long-term supporters and fundraising has been down by a third since October last year,’ says a spokesperson.

But it is meeting its demand, which more than doubled from 40 projects in 2007 to 85 projects last year.

It is the smaller charities, which rely heavily on donations and an army of volunteers, that face some of their most challenging times yet.

Housing Justice runs emergency shelters throughout the country via a network of churches. Donations to the charity have fallen by 25 per cent from £102,000 in 2007/08 to £75,000 for 2008/09.

This winter it saw demand for shelters increase to a record high. In London alone it housed 1,300 people in just 16 shelters. The capital’s co-ordinator, Sally Leigh, explains: ‘We have seen more people trying to access the cold weather shelters than ever before and longer waiting lists of people wanting an opportunity to sleep in our church shelters… [We] had to turn people away.’

And it says there is another major problem on the horizon that could reduce its voluntary workforce. From October this year, all volunteers working with vulnerable groups will be vetted by an independent organisation set up under the Safeguarding Vulnerable Groups Act 2006.

‘We’re anticipating it will pose a huge threat to the shelter services… Many volunteers will be put off offering their time and energy if they have to go through this process,’ says Ms Leigh.

Churches are likely to suffer the biggest blow. They have a regular source of volunteers from their former client bases - many of whom have criminal records and who could be barred as a result of the vetting process.

‘The shelters try to encourage ex-rough sleepers to return and volunteer,’ says Ms Leigh.

‘We recognise that [these people] can reach those on the extreme margins of society better than we can and significant numbers of these people have prison records which they don’t wish to reveal to anyone. If they had to be checked, they would not come forward.’

Some charities are appealing for other types of help rather than direct cash donations to enable them cope with demand.

The London-based Simon Community reports a ‘steady trickle’ of donations dropping off.

Manager Jo Nurse says: ‘We’re stretched with fewer donations and we expect that will get worse down the line’.

It has now taken a different tack and asked shops such as Marks & Spencer and Sainsbury’s to ramp up food donations.

Corporate culture
But corporate donations can make such a big difference it can be difficult to avoid hard choices when they dry up.

Michael Chuter, head of finance and enterprise at Foyer Federation, a charity for young homeless people, says a major contributor has
reduced their planned donation by £700,000.

‘When we were talking this time last year the figure being floated around was £1 million. But now we’re talking about £300,000,’ he says.

Bracing for any future sting, the organisation has already made modifications to its ‘flexible expenditure’.

In part this has meant drawing up a ready pool of consultants rather than employing staff full time.

For others, the recession is not the only thing pulling hard on their purse strings.

Rough sleeping charity Broadway says a tug-of-war for lottery funding against the Olympics is also beginning to hit home.

‘For a period of five years and through a number of grants, we received on average £165,000 each year from the lottery.  The figure for 2009/10 is £120,000,’ a spokesperson explains.

‘This has little to do with the recession, but is due to changes at the lottery with a contributing factor being the earmarking of funds to support the Olympics.’

The other big worry is the removal of the ring fence from Supporting People funding.

A survey published in April by homelessness umbrella body Homeless Link reveals that a third of its members reported a reduction in the level of Supporting People funding allocated to homelessness services in 2009/10 compared with 2008/09.

Andrew Redfern, chief executive of Framework, a charitable housing organisation providing supported housing and floating support for homeless people, says: ‘There’s a real worry that about cuts in programme and that’s the biggest threat we face - bigger for us than the recession.’

But not everyone is having such a tough time.

Rough sleeper charity St Mungo’s boasts: ‘We raised £4 million in charity income last year - a record for us.

‘[We] are fortunate to be marking our 40th year financially strong, having recently secured around £2 million worth of new contracts.’

Additional reporting by Isabel Hardman

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