Charity Resilience Index: Charities still struggling to meet demand and cover costs

Charities that survived the difficult winter continue to struggle to meet costs and provide for those that need them, despite a more positive economic outlook for the UK. More than 600 charity leaders were surveyed in April and May 2023 from across the UK, and results show that charities have entered a protracted period of rising demand, increased costs and falling donation income.

Four-fifths (81%) of charities say that demand for their services has increased compared to a year ago, while fewer than two-fifths (38%) of charities have high levels of confidence that they can afford to meet the current demand for their services and only half (55%) of charities are confident they can meet their current overheads, including energy, rent and supplies. 

Staffing is emerging as a major issue for many charities with three in five (60%) struggling to recruit or retain suitably qualified candidates or volunteers. Seven in 10 (70%) charities now say that the rising cost of living is affecting workforce morale, compared to 53% at the start of the year.

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

“Charities are still feeling stretched. They are worried about recruiting staff and struggling to meet demand for their help. Like the rest of us, they are having to adjust to inflation being higher – but they face the added challenge of people needing them more than ever, while donors’ incomes are squeezed.

“Britain can’t afford to have charities facing such uncertainty. We need a resilient, vibrant charities sector supported by a renewed culture of giving. That is why the UK needs for the Government to draw up a strategy for philanthropy and charitable giving to mobilise effort across society and business.”

The Charity Resilience Index is unchanged at 67%


In April-May the index remained at the same level recorded in January 2023.

Just over half of charities had high levels of confidence in their ability to meet current overheads (55%), and afford their current staffing levels (53%).

More charities in April-May were confident that they have a plan for maintaining or growing their income, compared to when a similar sample was surveyed in January (45% vs. 37%), while fewer than four in 10 (38%) charities have high levels of confidence that they can afford to meet current demand (down from 54% in January).

Figure 1

More charities are feeling confident about their ability to cope with the effects of the crisis

There has been little relief from the effects of inflation since our last survey in January 2023. Most charity leaders (85%) agree that the people and communities they work with are likely to be severely impacted by the crisis, but more now agree that their leadership team is confident to face these challenges.

Similarly, slightly more charities reported having developed a plan to help them face the cost-of-living crisis, possibly signifying the planning activity that typically takes place around the start of a new financial year (36% in April-May, up from 31% in January). Those charities with more than 200 employees were three times as likely as those with fewer than 20 employees to have developed such a plan (74% vs. 26%), highlighting the difficulty that many smaller charities experience around committing resource to strategic planning.

Figure 2

There is an increasingly negative impact on the voluntary sector workforce

Seven in 10 (70%) charities now say that the rising cost of living is impacting the morale of their workforce, and six in 10 are struggling to recruit or retain suitably qualified candidates or volunteers. These are substantial increases since we surveyed a similar sample in January (from 53% and 43% respectively).

As we moved into the 2023-24 financial year, the proportion of charities offering below-inflation pay rises increased (57% in April-May, up from 28% in January). This likely reflected a general increase in salary reviews taking place at the time.
“We cannot give pay rises anywhere close to inflation. This prevents us offering a competitive wage to new recruits and means we are haemorrhaging care staff to supermarkets and other employers.” 

Large disability charity in the South West



Figure 3