While inflation may have subsided, demand for charity services continues to rise along with competition for funding, new research by the Charities Aid Foundation (CAF) has found.
The research among 784 UK charity leaders found that 86% of the charities they lead had recorded increased demand for their services over the last 12 months, with 54% of those reporting that it had risen by ‘a lot’. This has increased from 43% in 2023 when a similar survey was carried out.
Organisations that are most likely to say that demand has increased ‘a lot’ are poverty-relief charities (67%), human rights/equality and diversity charities (66%), and charities helping those in need (55%), affecting services including food banks, debt advice, and domestic abuse support. One Chief Executive of a human rights charity in the North of England said: “We’re not even meeting the demand that exists now and we’ve got 70 people on our waiting list for counselling.”
Despite improvements to the economic climate over the last year, the research also finds that over a quarter (28%) of charity leaders are uncertain that their organisation will be able to meet the rising demand.
The situation for charities is exacerbated by increased competition for funding. Half (50%) of the leaders surveyed cited this as one of the main challenges facing their organisations.
This uncertainty over funding is forcing charities to change how they operate. Nearly a third (30%) of charities have either reduced the size of their workforce or are planning to do so, while 18% are not confident that they will have the funding necessary to continue their work by the end of decade.
The Chief Executive of a medium-sized refugee charity in the Northeast commented: “We’ve already seen a lot of mergers already, a lot of charities winding down and we are thinking about it quite seriously as well.”
Ashling Cashmore, Head of Impact and Advisory at the Charities Aid Foundation, said:
“While the worst effects of inflation may have subsided, charities are still having to do much more with less. They are dealing with ever-increasing demand which is only expected to rise as we head into winter – yet their income is not keeping up and there is less funding to go around.
“We need to work together to create a stable environment for our hard-working charities and those they support. The new Government has said it wants to reset its relationship with civil society and an important next step would be to introduce a national strategy for philanthropy and charitable giving to make sure charities receive the support they desperately need.”
As an important source of data and insight to the Government and a critical delivery partner for public services, charity leaders see the need to make the case for a more substantial role in advising the government on policy areas that affect their work.
Separate CAF research found that the public is supportive of charities having more of a voice in policy decisions, with a majority saying it’s important for government, businesses, charities and philanthropists to work together to deliver projects nationally (84%) and locally (85%).