Charity closures forecast as cost of living crisis begins to impact on the cost of running services and maintaining buildings

Many charities with older buildings are being hit by soaring energy prices, with some reporting that their costs have risen by up to five times, sector bodies have warned.

The National Council for Voluntary Organisations (NCVO) said 9 out of 10 charities were concerned about rising energy costs, while the Association of Chief Executives of Voluntary Organisations
(ACEVO) said its members had reported that their costs had increased by 300-500%.

The Ethical Property Foundation (EPF), which provides property help for charities and social enterprises, said charities were particularly at risk from rising prices as many have “old and energy inefficient” buildings and warned that many could have to close this winter, while Pro Bono Economics (PBE) said charities providing energy-intensive services would also be keenly affected, with an increase in demand for services adding more pressure. 

Other charity sector bodies, including the Charities Aid Foundation (CAF), have warned that some voluntary organisations are likely to close in the coming months as inflation increased to a 40-year high. Organisations are being hit by higher costs, lower donations and increased demand, they warned, with pressures set to intensify further as inflation is expected to rise even higher.

A government spokesperson for the Department for Digital, Culture, Media and Sport (DCMS) stated that energy suppliers may offer concessionary rates to charities and suggested organisations contact their supplier to ask. 

Charities may also be entitled to a reduction in VAT, from 20% to 5%, and exclusion from the main rates of the Climate Change Levy on the energy they use for non-business purposes. 

Charities that may be beginning to struggle to meet rising costs could also explore merging with another organisation.  The Esmee Fairbarn Foundation still offers Merger Feasibility funding up to £15,000 for organisations that are at the early stages of thinking about a merger with an identified merger partner(s).

Source: Civil Society News