Weathering the storm: armed forces charities prove resilient in response to the Covid-19 pandemic

The Covid-19 pandemic brought about unprecedented challenges for charities and the communities that they serve.  

Research undertaken by the Charity Commission for England and Wales, found that nine out of ten UK charities experienced some negative impact from the Covid-19 pandemic (CCEW, 2021). More than 8 out of ten (85%) charities experienced impacts on service delivery. While three-fifths (60%) of charities reported a loss of income and a third (32%) experienced a shortage of volunteers (CCEW, 2021).  

The effects of the pandemic on the UK charity at large, are relatively well documented but, until now, little has been known about the impact on armed forces charities as a unique subsector. This article explores some of the key findings from DSC’s latest Sector Insight report.  

While the number of armed forces charities fell over the course of the Covid-19 pandemic, there’s been no cliff edge in closures

Between 2020 and 2023, the number of armed forces charities closing was consistently higher than the number opening, which contrasts with the picture for the wider UK charity sector (Chan et al., 2022).  

However, the percentage of armed forces charities closing in each year, was actually slightly lower during 2020–22 than during the three-years immediately prior (2017-2019). This is welcome news and highlights the strength of the sector. 

There was a clear fall in the armed forces charity sector’s real income and expenditure following the onset of the Covid-19 pandemic

The armed forces charity sector’s income and expenditure increased steadily between 2012 and 2019, before falling sharply in 2020. After adjusting for inflation, the sector’s real income fell from £1.06 billion in 2019 to £0.82 billion in 2020 – that’s a fall of 23%. This was notably larger than the 6% fall in income seen in the wider charity sector during the same period (Tabassum and Fern, 2023).  

Meanwhile, expenditure also fell but not as quickly, decreasing from £1.00 billion in 2019 to £0.92 billion in 2020 (a fall of 8.0%).  

Income fell more quickly than expenditure after the onset of the Covid-19 pandemic, causing charities to dip into their cash assets

In 2020, the armed forces charity sector’s expenditure was 11% more than its income – this marked the highest gap between income and expenditure recorded since DSC’s analysis began back in 2012. The value of cash assets relative to 2017 remained almost unchanged in 2018, but it dropped to 89.2% in 2019 and then again to 81.2% in 2020.  

This suggests that armed forces charities responded to the onset of Covid-19 by using their liquid cash reserves to maintain or increase their support to beneficiaries, despite experiencing an overall fall in income.  

The majority of armed forces charities experienced negative growth in real income at the onset of the Covid-19 pandemic 

Close to two-thirds (63%) of armed forces charities had less income in 2020 than they had had in 2019. Moreover, around two-fifths (59%) of armed forces charities had less income in 2021 than they had had in 2020.  

Before the Covid-19 pandemic, the (median) average annual change in income was close to zero, but this fell sharply (to -17%) in 2020. This mirrored trends in the wider charity sector in 2020, where a sudden drop in charities income was labelled ‘highly distinctive’ compared to previous years (Clifford et al., n.d., p. 7).  

The future looks cautiously optimistic for post Covid 19 income recovery

Provisional data for 2022 suggests that 54% of armed forces charities had more income than they had had in 2021. However, this isn’t enough to offset the cumulative impact of the prior two years. Over two-thirds (69%) of the armed forces charities (with available data), had less income in 2022 than in 2019.  

Armed forces charities had fewer volunteers and employees in 2021 than seen in previous years

By 2021, the number of volunteers dropped to only 58% of what it had been in 2017 (the year for which data is first available). This broadly aligns with the wider UK charity sector, where rates of formal volunteering also ‘dropped sharply’ following the onset of the pandemic (Tabassum and Fern, 2023).  

The number of employees also fell by around 9% between 2020 and 2021, resulting in a smaller workforce. These findings contrast with those for the broader UK charity sector, where the number of employees didn’t fall until 2023 (Tabassum and Fern, 2023).  

Overall, armed forces charities have shown incredible resilience and adaptability in response to the Covid-19 pandemic but the sector’s income has yet to fully recover. To learn more about the challenges experienced by charities, in their own words, download DSC’s Sector Insight Report.  

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