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Charities and the impact of the cost-of-living crisis

Updated: Nov 1, 2022

The cost-of-living crisis is having an impact on households across the UK. Estimates on energy prices show that the number of households in fuel poverty will rise from seven million to 10.7 million in April next year, according to the End Fuel Poverty Coalition. The number of people asking for help from Citizen’s Advice has also hit a record high. Projections show that by the end of 2022 it is likely to have supported 57% more people than last year with access to crisis support.

As we might expect, the need for support from charitable organisations is rising as the crisis continues. Charities are at the heart of our communities. There are over 170,000 charities registered in England and Wales. Many of them deliver services which have traditionally been provided by the public sector. Online searches for ‘food banks near me’ have increased by 250%. In a survey of baby banks across the UK, conducted by the charity Little Village, of the 55 that responded, over 90% said that 2022 is their busiest year yet. Research by Swansea University has found that the cost-of-living crisis is also having significant impacts on people’s mental health and emotional wellbeing.

The statistics demonstrate the size of the impact, but beyond this are the individual stories, the people who are facing incredibly difficult decisions, whether to go without food, heating or other essential items. So many of the charities I work with and speak to support families for whom this is a reality. A reality for many, they have never had to face before. It is important to remember that a global pandemic preceded this, when many people lost loved ones, many lost their livelihoods and there was also a huge impact on people’s mental health and wellbeing.

For a sector who predominantly fund their services through donations and fundraising, there is increasing pressure for charities to raise additional funds. Given the huge financial pressure faced by the population, what does this mean for charity donations?

CAF’s UK Giving Report 2022, which is the largest study of giving in the UK, found that fewer people are giving overall, and donations are constantly lower compared with 2019 levels.

The Donor Pulse Report: Autumn 2022 by Enthuse has recently been published and it is an interesting read. The report outlines that despite the negative economic environment charities have reasons to remain optimistic.

Not everyone has been equally affected by the cost-of-living crisis. While 5% of people have cancelled recurring donations, 8% have decreased them, 15% have increased their regular giving. Where there is a decrease research shows it is the impact of the rising cost of living preventing people from donating rather than any lack of desire to give. So, the desire is still there. Indeed, support for others who are struggling is one of the key motivations as to why people are donating to charity, with 24% of people said the reason they were giving was down to the problems others are facing with getting a basic standard of living.

Another interesting take away from the Donor Pulse Report is around workplace fundraising, which has also been impacted, not only by the cost-of-living crisis, but also (as to be expected) by covid-19. Changes during the pandemic have continued and there is an obvious desire to keep costs down. Just two in five people are at their workplaces five days a week, with 47% spending three days or less there. Despite the gradual return to offices, the good news is that 49% of workers have taken part in a workplace fundraising event in the last three months.

It seems that a really positive take away is that people and companies still want to donate and raise funds for charities and one of the driving forces is to respond to the impact of the cost-of-living crisis.

Much like humanitarian aid, people want to do all they can to help. (Indeed the proportion of people in the UK giving to charity in March 2022 rose by 34%, according to CAF, most likely due to the response to the war in Ukraine). Just as in any crisis we all need to be mindful of how we approach donors, and be considerate of the difficulties they may be facing personally. Similarly there is a need to more inclusive when it comes to corporate partnerships. Workplace fundraising still has an important role to play, but much like virtual fundraising initiatives at the height of the pandemic, charities should try to ensure campaigns and activities take hybrid working into account.

This is certainly a challenging time for the charity sector, but it can truly be incredibly responsive, creative, and resilient, as the covid-19 pandemic has shown and we need it now, more than ever.

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