Many charities 'facing imminent collapse' and UK sector could lose £4 billion as result of coronavirus crisis

Many charities are "facing imminent collapse" and the UK sector is estimated to be facing a £4 billion loss in the next quarter as a result of the coronavirus crisis, officials have warned.

The cancellations of fundraising events and closure of high street charity shops due to the pandemic are expected to hit finances hard.

Giving evidence to a Government select committee on Tuesday, the National Council for Voluntary Organisations (NCVO) said it would usually expect charities to generate an income of £12.5 billion in the next quarter.

But NCVO's chief executive, Karl Wilding, said losses for the sector during the crisis could "be in the region of £4 billion" - a figure based on survey data and analysis of charity's accounts.

According to NCVO, UK charities employ around 900,000 people in paid positions.

More than 40,000 people run the marathon each year while around 750,000 spectators line the streets to cheer them on. Credit: PA

Mr Wilding added: "Charities are facing a real crunch, with more pressure on the services they offer at the same time as losing out on fundraising income.

"This is something that's affecting all charities, large and small, and they urgently need answers."

One of the high profile losses this year is the London Marathon - currently postponed until October - which many charities rely on for income, as well as small charity sporting events.

The London Marathon raised more than £66 million last year.

Non-essential shops have closed their doors after the Government announced lockdown measures. Credit: PA

Charities have also closed high street shops in accordance with current Government guidelines to try and limit the outbreak.

For Oxfam that has meant the closure of around 600 outlets around the UK.

In the last financial year the international aid organisation's shops raised £17.3 million for the charity, after costs.

The charity has announced it will furlough "about two-thirds of its UK workforce" until June 1, factoring in a "reduction in income" due to the crisis.

Elsewhere, Cancer Research UK says it expects to see its fundraising income decline by up to 25% in the next financial year as a result of the pandemic.

The charity has been forced to shut its 600 stores - which raised £109 million in the last financial year.

The group has also made the "difficult decision" to partially cut research funding as it tries to mitigate the impact of the outbreak.

Runners take part in the Cancer Research UK London Winter Run in February last year. Credit: PA

The future of fundraising events for Cancer Research are also in question, the charity says it is "reviewing the feasibility of its event series for 2020".

This includes fundraisers like the Race for Life.

Events in aid of Cancer Research generated 8.5% of the charity's income last year.

Michelle Mitchell, Cancer Research UK's chief executive, warned: "There can be no doubt that this global pandemic is going to cause huge strain on charities in the coming months," adding: "It is clear that Cancer Research UK will be hit hard.

"We've already deferred our spring research grant funding round, and we are making further cuts to our research funding.

"This is uncomfortable for us, but we must be realistic about what we can deliver given the current circumstances.

She warned: "Support from both the Government and the public will be vital.

"We simply will not be able to continue funding our life-saving work without it."

Charity shops have closed their doors following Government guidance for 'non-essential' stores to shut. Credit: PA

Smaller charities have projected financial hits from the crisis too.

Brain Tumour Research has forecast a 50% shortfall in its annual income, a drop from £4 million to £2 million.

Hugh Adams, a spokesperson for the charity said the crisis will cause "a massive financial hit".

Mr Adams warned it "could mean that charity-funded research into brain tumours will stop and the vital progress we have made so far will be lost."

High streets and shopping districts have fallen silent as non-essential shops close. Credit: PA

Animal charities like the PDSA said they were also expecting a significant financial blow as a result of the pandemic.

A PDSA spokesperson said the outbreak "will have a very significant and long lasting effect on our income, running into many millions of pounds".

All of the organisation's charity shops have been temporarily closed following the Government's lockdown measures.

While the PDSA's Pet Hospital service is offering urgent life-saving treatment only at its 48 branches.

Dogs Trust has closed its centres to walk-in members and will not be starting rehoming processes for new adopters. Credit: PA