New research from the National Council for Voluntary Organisations (NCVO) suggests that the cost of living crisis has sparked a cost of giving crisis for charities that could see 1 in 5 stop operating this winter.
NCVO surveyed over 580 charities and voluntary organisations across the country between September and October with 19% saying that if current conditions don’t improve, they could be forced to pause operations completely until the economic outlook improves, leaving them unable to support the communities and people they serve. With current figures showing nearly 170,000 charities in the UK, this could equate to around 34,000.
On top of this, almost a quarter (24%) of the charities surveyed say they are planning to reduce the volume or variety of services they offer this winter to cope.
Overall, 85% predict that this winter will be as tough – or even tougher (54%) – than last winter, and over a quarter of charities (27%) are already saying they will be unable to meet the level of demand this winter.
NCVO says charities are facing a ‘triple threat’ of lower incomes (61%), higher costs (77%), and increased demand (67%).
Only 1 in 3 (35%) charities say they can manage the crisis through cost cutting with the following costs having increased since last year:
- goods and services (73% of charities)
- energy and utility bills (68%)
- wage bills (63%)
- insurance costs (51%)
- property maintenance (41%)
- rents and mortgages (27%)
Sarah Vibert, CEO of NCVO, said:
“Charities across the country are working towards another challenging winter. The voluntary sector has provided support through some of our most difficult times, but this winter there is a real and imminent possibility that many charities will no longer be able to cope with spiralling costs, falling funding and record demand. For charities, who give so much, this is a Cost of Giving Crisis. Urgent help is needed to make sure charities can continue to support the communities and people they serve, when they need them most this winter.”
NCVO says urgent support is needed to help charities. It is calling for government action to properly fund charity contracts and to ensure that both contracts and grants for charities delivering services are uplifted to meet the costs of delivery. Over £16.8 billion of contracts and grants in the UK charity sector come from government and the public sector. However, NCVO says, these contracts are not ‘uplifted’ each year to reflect the rising costs of delivering these vital services.
Cost of Giving support portal
It has also launched a Cost of Giving Crisis support portal to help charities of all sizes this winter. This includes financial management support, information to help charities manage their energy costs and efficiency, guidance on supporting and retaining staff and volunteers, webinars and online training, and support for smaller charities and voluntary organisations.
And, with almost half (45%) of charities saying they plan to meet the challenges of the Cost of Giving Crisis by recruiting more volunteers,NCVO is also signposting to its resources to help people who would like to volunteer.