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Cost of living: charities face uncertain months ahead as half say they used reserves to get through tough winter

Charities have been a lifeline to millions this winter – providing food, warmth and support for the vulnerable – but new research has found just half of charities are confident they can afford to meet their current overheads, including energy, rent and supplies. The Charities Aid Foundation (CAF) surveyed more than 1,300 organisations across the UK over the previous four challenging months.

With the Government’s support for their energy costs set to be cut from April, many charities face prolonged uncertainty as they continue to deal with rising demand for their help, increased costs and falling donation income – unlike businesses they cannot pass extra costs on to consumers.

Overall, three in five charities (57%) report demand has increased since last year, and a quarter (24%) say this increase is significant.

Many charities say they are being stretched beyond their means, as their incomes have also taken a hit. Less than a third (31%) have high levels of confidence in their current funding, and half (50%) have had to use their reserves to cover day-to-day running costs.

For some, this means uncertainty about the future. More than half (53%) worry about surviving, up from just over a third (35%) in April 2022. The challenges are particularly acute for charities who offer care and support services. Currently, seven in ten (71%) charities providing these vital services for disabled people, children or older people say they are worried about their future survival. 

There is clear indication too that the impact on charities has been uneven across the country. Charities based in the North of England appear to be more vulnerable than elsewhere across the country. Demand has increased for nearly seven in ten (67%) charities in the North, and two-fifths (40%) say this has increased significantly (compared to 55% and 24% across the rest of England). Charities in the North are also significantly more likely to have used their reserves to meet running costs than those based elsewhere in England (63% compared to 50%).

Neil Heslop OBE, Chief Executive of the Charities Aid Foundation, said:

“Imagine what this winter would have been like without charities helping people day in, day out with food, shelter and care. Even as the economic outlook might look brighter than feared, charities are saying loud and clear that they are still facing the squeeze.

“The dramatic cut in Government support for energy bills from April will put many charities in an even more precarious position, particularly those who are helping the most vulnerable. But they are not businesses and have no way to pass their costs on. The Chancellor should use his upcoming Budget to acknowledge the contribution charities are making – and provide the additional ongoing support they need to face the future with confidence.”

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