Delays in granting probate are causing charities to cut vital services as finances tighten, new research has revealed.
More than a quarter of charity directors said they had been forced to make redundancies because probate delays had affected their finances, according to research published by asset management firm Rathbones.
Research shows that almost all charities, 99%, are currently affected by hold-ups in probate.
Andy Pitt, director of Rathbones Charities, said: “Due to significant probate delays, charities are missing out on millions of pounds of income needed to fund vital services and life-saving research.” said.
Testamentary gifts to charities in the UK currently raise around £4 billion a year.
However, due to recent increases in waiting periods, families are now having to wait more than 11 months on average for probate to be granted, the study found.
The asset management company, which is responsible for managing £9.4bn of funds for more than 3,000 charities, said around 14% of each charity’s income was currently held up by probate issues.
As a result, charity representatives have been forced to make difficult decisions to fill funding gaps.
Eight in 10 charity executives said the issue was impacting on recruitment plans, and 51% said it was causing cuts to services.
The survey also found that 43% said they had sold assets such as real estate to fill the gap, and 27% had cut staff.
Mr Pitt said: “This impasse, from property sales falling through to having to pay inheritance tax interest, not only increases financial stress for grieving families, but also reduces the financial stress of many charities. “It has also forced group leaders to make difficult decisions about how to respond.” To address cash flow disruptions.
“They don’t know how long they can wait until they receive these much-needed funds, making it impossible to budget or plan for the future.”
