Cost of living: Charities still struggling to meet demand and cover costs

23 June 2023

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.

Four-fifths (81%) of charities say that demand for their services has increased compared to a year ago, according to new Charities Aid Foundation (CAF) research with 621 charities. Fewer than two-fifths (38%) of charities have confidence that they can afford to meet the current demand for their services. In contrast, the confidence level was at 54% in January in a similar CAF survey.

As inflation has remained high, only half (55%) of charities are confident they can meet their current overheads, including energy, rent and supplies, a small increase from 50% in January’s survey. Additionally, nearly half (46%) have used their reserves to cover shortfalls in income. However, a third (36%) of charities now say they have a plan in place to help them face the cost-of-living crisis, with two-fifths (43%) having asked funders for help.

Staffing is emerging as a major issue for many charities. Around half (53%) say they can afford their current staffing levels, while three in five (60%) are struggling to recruit or retain suitably qualified candidates or volunteers, a significant increase from two-fifths (43%) in January’s survey.  Seven in 10 (70%) charities now say that the rising cost of living is affecting their workforce, 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.”

Notes to Editors

Data collection took place in April and May 2023 with a total of 621 organisations as part of the Pay and Equalities survey with ACEVO. In January, data was published as part of CAF’s Charity Resilience Index and included survey results from 1300+ organisations.
Respondents were drawn from all four nations of the UK, across the income spectrum of the charity sector and a range of cause areas.