The recession has forced the closure of an Oxford charity and many more in the county could follow, say worried fundraisers.

Oxfordshire charities said the outlook for the next two years was bleak as they battle the effects of the credit crunch.

Ithaca, an East Oxford-based arts organisation working with people with disabilities, will close its doors for good this month.

Director Brona O’Toole said: “We were founded in 1982 as Southern Arts Link and were fully funded by the Arts Council.

“Eight years ago that funding ended and since then we’ve had a small amount from local authorities but that only accounted for 30 per cent of our core overheads,the rest had to come from fundraising.

“We managed to do that successfully but the fundraising climate has become harder and harder in the past two years, especially with the credit crunch.

“Charitable trusts are now much more cautious over what they fund and there has been a diversion of funds to the Olympics.

“Charities like us, who have had their core funding cut, will eventually fold. It might take years, but it’s just not sustainable.

“You have to be able to plan ahead and often the funding does not allow that. You need to be able to get two or three years ahead of yourself, rather than living hand to mouth, as we were. That’s what killed us off.

“We’re not going to be the only ones to fold. It’s always the small ones that go.”

At the Ley Community, a drug-rehabilitation centre in Yarnton, chief executive Wendy Dawson said: “We have just had to make two people redundant and we have had to dovetail that with a re-organisation of the programme.

“I think people are more reluctant to give to charity at the moment. They’re scrutinising charities more and being more selective of the ones they give to.

“A lot of families have been hit by redundancies and for them it’s a case of charity begins at home.

“We’re going to have to pay a professional fundraiser to help us. You have to speculate to accumulate.”

Jayne Manley, of the Northmoor Trust, which manages the Wittenham Clumps estate, said: “The number of applications for grants has gone up and the amount of money has gone down.

“When you do get them, they rarely last for more than three years. You can’t plan on yearly grants – it’s not sustainable.

“The next two years will be very difficult. You have to look at other ways to donate to charity. People can give their time and expertise, rather than money.”

Pat Conafray, of the Thames Valley and Chiltern Air Ambulance, said: “We anticipate negative growth this year and next.

“We need to raise about £2m a year, but that’s a moving target. If the pound continues to weaken, the cost of our spare parts will go up because the company we get them from is in Germany.”

Julie Alsford, of Age Concern Oxfordshire, said: “One of the things that is facing us, and all charities, is our reserves.

“Some of the places offering better interest aren’t covered by the Financial Services Compensation Scheme.

“You can put money in a bank but that will give you almost no interest, or put it in a more specialised system – but if that goes down, we wouldn’t get the money back.”

The county’s biggest charity, Oxfam, had an income of £299,700,000 last year, exactly the same as the previous year.

Meanwhile, Helen and Douglas House hospice, in East Oxford, saw income reach £6,422,000 last year, up from £3,927,023 in 2007.