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.

In January, nearly three in five (57%) charities reported that demand had increased compared to the same time last year, including a quarter (24%) of charities who say that it has increased ‘a lot’. Our research indicates that charities working for the prevention or relief of poverty are particularly likely to report an increase in demand for services.

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 struggling to survive, and 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 struggling to survive. A charity offering care and support services who took part in the research said: “We cannot continue for long under our present circumstances. There is nothing left to cut. We have not replaced staff and this has had a detrimental effect on current staff who are asked to do more with no reward.”

Recommendations

CAF is calling on the Government to ensure charities receive targeted support with energy costs, and speeds up the automation of Gift Aid to help the 126,000 charities not benefitting from this valuable tax relief. They call on donors to consider resilience funding for charities, including covering core costs and multi-year funding, to give charities the time and space to strengthen their organisation.

For charities, CAF recommend prioritising resilience-building, engaging with donors, and taking advantage of the many resources now available to help them manage the crisis, including from the Charity Commission and National Council for Voluntary Organisations (NCVO).

CAF has developed a resource hub for charities which provides advice on financial planning, fundraising, staffing and more.