With the Government’s support for charities’ energy costs set to be cut from April, research by Charities Aid Foundation shows that just half are confident they can afford to meet their current overheads, including energy, rent and supplies.
CAF surveyed over 1,300 nonprofits over the last four months and found that three in five charities (57%) report demand has increased since last year, while a quarter (24%) say this increase is significant.
It also reports that many charities are saying they are being stretched beyond their means, with their incomes also having taken a hit. Less than a third (31%) have high levels of confidence in their current funding, and half (50%) have had to use their reserves to cover day-to-day running costs.
As a result, more than half (53%) worry about surviving, up from just over a third (35%) in April 2022. The findings show the challenges are particularly acute for charities offering care and support services. Currently, seven in ten (71%) say they are worried about their future survival.
The impact varies across the country. Demand has increased for nearly seven in ten (67%) charities in the North, and two-fifths (40%) say this has increased significantly (compared to 55% and 24% across the rest of England). Charities in the North are also more likely to have used their reserves to meet running costs than those based elsewhere in England (63% compared to 50%).
Commenting, Neil Heslop OBE, Chief Executive of the Charities Aid Foundation, said:
“Imagine what this winter would have been like without charities helping people day in, day out with food, shelter and care. Even as the economic outlook might look brighter than feared, charities are saying loud and clear that they are still facing the squeeze.
“The dramatic cut in Government support for energy bills from April will put many charities in an even more precarious position, particularly those who are helping the most vulnerable. But they are not businesses and have no way to pass their costs on. The Chancellor should use his upcoming Budget to acknowledge the contribution charities are making – and provide the additional ongoing support they need to face the future with confidence.”
The full findings can be found in CAF’s Charity Resilience Index, which focuses on three key dimensions: charity income, demand for services, and operational costs.