Two-fifths of charities using reserves & asking funders for more help as need & costs soar
Melanie May | 19 January 2024 | News
Soaring need for charities’ services combined with higher costs mean some 40% in England and Wales are now using their reserves to meet operational costs. 38% are also asking funders for more help, new research from the Charities Aid Foundation has shown.
Half (50%) of charities now say they are at full capacity and cannot help anyone else, as a result of much higher demand and sustained financial challenges. CAF’s research with more than 650 organisations in England and Wales found that one in seven (15%) say they are having to turn people-in-need away.
Only 31% of charities say they have the capacity to help any more people due to the pressures of the cost-of-living crisis. As part of the research, a children’s support service in the South East said, “the overall picture for our charity is uncertainty and anxiety” and a Northern charity reported that they are “stuck in a vicious circle that we are trying to break out of.”
Advertisement
- Of those at full capacity, 51% are making judgements to prioritise people most in need
- More than a quarter (28%) have created a waitlist
- 9% have stopped taking any referrals
- In addition, 25% of charities with capacity issues are scaling back what they do to focus on core services
- 16% are considering charging fees for their services to meet the need
- 41% are signposting to other organisations
An autism charity in the South-East said that “it now takes two minutes to fill 50 spaces when we open the waiting list to new referrals.”
Issues more complex
CAF also found that the issues charities are dealing with are becoming more complex. 47% of charities surveyed say that more people are coming to them in a state of extreme need compared to this time last year, and two-fifths (40%) are helping more people to navigate public services than a year ago. One poverty relief charity in London said: “It seems relentless. More and more people come to us in even greater need and staff feel helpless to support them all. Those same staff are also struggling themselves.”
Many charities in precarious position
The challenges of the cost-of-living crisis for charities of higher demand, lower income from donations and grants and inflated costs, are reinforcing one another to put many charities in a precarious position, CAF says. Nearly two-thirds (61%) of charities say they are having to do more with less compared to a year ago, and as well as using reserves and asking funders for with increased costs, 12% are also forced to reduce staff numbers or make redundancies.
Neil Heslop OBE, Chief Executive of the Charities Aid Foundation, said:
“Many charities are stuck in a Catch 22 situation. They face higher demand, while struggling with declining income, and significantly higher costs. Despite being the last port of call for the most vulnerable in our society, they are having to make very difficult decisions to introduce waiting lists, charge fees or turn people away who desperately need their help.
“The pandemic and support in the Chancellor’s 2023 Budget brought stop-gap solutions, without which many more charities would have folded. But with charities facing significant uncertainty, we need Government to take the lead and introduce a turnaround plan to support a strong charity sector and thriving civil society for the future.”
Related posts
CAF research shows more than half give away unwanted Christmas gifts
CAF UK Giving Report shows drop in regular givers for third year running
Irish give more to support the homeless than any other country
22% of those significantly cutting spend still think supporting charities very important
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.