Cost of living crisis likely to hit not-for-profits in the UK with a triple whammy

This is an interesting article that appeared recently in UK Fundraising which chimes with the anecdotal evidence we’ve received over the last few weeks about not-for-profits about to be hit by a triple whammy:

1. The cost of living crisis increasing utility bills on office space, as well as rises in building costs affecting new builds.
2. A significant increase in demand on services, particularly from those who are most disadvantaged and vulnerable and struggling to afford essentials such as food and heating, and
3. Grant providers and donors, whose funds and energies have been depleted by COVID, unable to keep pace with the emerging crisis.

“The cost-of-living crisis saw two million fewer people in the UK donate last month, according to data from the Charities Aid Foundation.

“Last month, a quarter (25%) of people said they had donated to charity in the past four weeks, compared to a usual average of 29% – equating to two million less.

“The Charities Aid Foundation’s research also reveals that six in 10 (58%) people plan to cut back on discretionary spending over the next six months in order to manage their bills – rising to 69% amongst 25-34-year-olds. Just a quarter of people say they won’t be cutting back on anything.

“Around one in 10 (12%) people reported last month that they plan to cut back on charity donations, while previous research from CAF found that nearly nine in 10 charity leaders anticipate an increase in demand for their services.

“However, it says many donors are looking at other ways to support charities or make the most of their donations, with options including donating goods, volunteering, joining community action groups, and participating in the Gift Aid scheme when giving.

“Alison Taylor, CEO of CAF Bank and Charity Services, Charities Aid Foundation, said:

The pandemic has highlighted the vital role that charities play in our society, including those who work and volunteer for them. The cost-of-living crisis makes the value of charities’ work more visible than ever, while also placing these same charities under significant pressure as they seek to deliver their essential services and meet increasing demand from their communities.

Even when household finances are being squeezed, we have been struck by how people continue to support the charity sector, seen for instance in the incredible public response to the DEC Ukraine Humanitarian Appeal. The most important thing is to make sure your donations are given effectively by taking advantage of the tax benefits on offer. There are also many other ways for people to support the work of charities that do not involve giving more money, such as volunteering your time and skills, which can make a huge difference.

Source: UKFundraising