More people seek help from charities as credit crunch hits home » Health » 24dash.com

One in five charities saw an increase in demand for their services over the last 12 months, a survey reveals today.

Among charities providing services, such as health, care for the elderly and social services, 21% reported a surge in the calls for help they received in the last year.

One in four charities that collect monetary donations reported a fall in funds received from the public and one in 12 of these said they had had to make redundancies as a direct result.

The Charity Commission, the independent charity regulator that carried out the survey, said the findings indicated the third sector was being squeezed by the credit crunch.

It said 38% of charities reported being hit by the economic downturn of the last year in some way, with more than half (54%) affected by increased costs for basics such as energy, food and travel.

Housing and homelessness charity Shelter said it had seen a surge in demand for its services due to problems experienced in the current economic climate.

A spokesman said: "People are struggling with their mortgages and are facing repossessions so they are calling our helpline to ask for advice."

The Samaritans central London branch said it experienced a 25% increase in calls in August and September compared to the same months last year.

This period saw the collapse of investment bank Lehman Brothers and the accompanying loss of thousands of British jobs.

Oxfam also said it had seen an increase in demand recently and is reportedly cutting its UK budget by 15%.

But the survey revealed that three quarters of charities had not put any new measures in place to deal with the credit crunch and did not plan to do so in the future.

The Charity Commission described this figure as "slightly concerning."

The measures implemented or planned by the other 25% are thought to include cutting back on, or cancelling, projects, scaling back PR operations and making redundancies.

Dame Suzi Leather, Charity Commission chairman, said: "Charities, like many organisations at present, are facing a great deal of uncertainty and for some the situation could get much worse.

"Even before last week's problems with Icelandic bank collapses, some charities were really being squeezed by higher costs and higher demands for vital services.

"They will wonder how they are going to survive the current crisis while trying to continue meeting people's needs."

She urged the public to carry on donating to charities during the current credit squeeze.

"They need our help more than ever," she said.

It emerged last week that British charities are estimated to have at least £120 million tied up with stricken Icelandic banks.

Stuart Etherington, chief executive officer of the National Council for Voluntary Organisations, said: "Although these figures do point to a downturn for charities over the last year, they clearly demonstrate that there isn't a need to panic.

"What is being highlighted are the mixed messages we seem to be getting from various pieces of research. Some are saying that a quarter of charities have made redundancies. This evidence demonstrates less than 2% have."

:: About 500 charities were interviewed between September 17 and September 30, ranging from those with incomes of less than £10,000 a year to those with annual incomes of more than £1 million. The charities surveyed remain anonymous.