Research by Help Needed has found 1,400 charities at risk of crisis due to COVID-19

24.04.2020

The foundation Help Needed has presented a study on the risks faced by the NGO sector during the coronavirus pandemic.

The study, Coronavirus as a test for the resilience of charitable organisations, was published 24 April 2020. The Help Needed analysts have understood the risks which coronavirus poses to charities. It turns out that of the sample group of charities, 35% were at risk.

For this research, charitable organisations such as foundations and institutions were selected out of those which submitted reports to the Ministry of Justice.

A risky position

Researchers assessed the risks faced by charitable organisations through looking at their financial stability. To do this, they analysed ON0001 report forms submitted to the Ministry of Justice – particularly sources of money receipts.  The initial finding was that 61% of organisations (approximately 2,500) included in the study were at risk because they rely on one or two sources of funding.

However the authors of the study noted “This would be an unnecessarily pessimistic outlook, since funding sources do vary. The principle of diversification, which ensures sustainability, can also be applied very well when considering private donations – where there are various donation amounts coming from lots of different people”.

By accepting that private donations can reduce risks faced by charitable organisations, researchers have also found that there is a reduced number of organisations under threat. In total, there are about 1,400 charitable foundations and institutions under threat, which is approximately 35%.

However, this statement does also have a limitation: the results would be more accurate if researchers knew the share of a particular source in the organisation’s budget. Furthermore, according to the authors, risk reduction can occur not only through increased funding; other important factors include how the money is spent, the safety of the team and the quality of the management.

Source: https://www.asi.org.ru/news/2020/04/24/nuzhna-pomoshh-krizis/