35% of Charities Fear Insolvency Due to Cost of Living Crisis
Already hard-hit by COVID-19, charities are the latest to express concerns about their survival due to the cost of living crisis.
As discretionary payments, donations to charities are some of the first things to go when families feel the economic pinch. Newly published research by the Charities Aid Foundation shows that 35% of charity leaders are worried about their organisation struggling to survive.
Donation Levels Below Pre-Pandemic Levels
The Charities Aid survey, which explores people’s habits over the last twelve months, showed over 600k less was donated to charity in 2021.
This looks set to lower further as the latest data, from April 2022, shows 62% plan to cut back on discretionary spending to help them manage their bills.
‘Charities are impacted by the cost of living crisis on many fronts’ said Alison Taylor, CEO of CAF Bank and Charity Services,. “For many charities however, their resources are stretched after two years supporting their communities throughout the pandemic, and they are also having to find the funds to pay higher costs. With tightening household budgets impacting donations, there is a perfect storm facing the sector, and sadly, there are likely to be some charities unable to survive this year.”
Four in five charity leaders (82%) are also worried about the increased cost of utilities, including energy bills, rent and fuel, and managing demands for higher wages (80%). The survey also showed that nearly two-thirds of charity chief executives (65%) are worried about the higher cost of stock, equipment, and supplies.