£306million deficit of small and medium-sized charities

Small and medium sized charities reported deficits of more than £300million in 2011, compared with an overall surplus of £325million in 2007, according to an analysis of the latest accounts by the Charities Aid Foundation (CAF).

The research by CAF, which promotes charitable giving and provides financial services and social finance to not-for-profit organisations, found losses among small and medium sized charities have spiralled since 2007.

CAF's analysis of accounts lodged with the Charity Commission found that charities of all types with incomes of up to £1million a year reported total deficits of £306million in their financial year ending in 2011, compared with an overall surplus of £325million in the 2007 financial year.

The situation reported in 2011 had also markedly deteriorated from 2010, when small and medium sized charities, who represent more than 130,000 of Britain’s 162,831 registered charities, reported an overall loss of only £20million.

Findings from the research included that:

• Registered charities with incomes of less than £10,000 reported total losses of £111million in 2011, up from reported losses of £19million in 2007
• Charities with incomes between £10,000 and £100,000 reported total losses of £113million in 2011, compared with a surplus of £33million in 2007.
• Charities with incomes between £100,000 and £1million reported total losses of £83million in 2011 compared with a reported aggregate surplus of £311million in 2007.

This reduction in resources comes at a time when many charities face reductions in support from the public purse, reductions in giving and low income from any reserves or investments they have.