How to protect your charity as the cost-of-living crisis escalates

Third Sector Promotion Ansvar

As inflation skyrockets and the cost of living rises, sadly charities are likely to see a surge in the already high demand for their vital services – while also facing rapidly increasing costs. Sarah Cox, managing director of charity insurance specialist Ansvar, explains what you can do to protect your organisation

(Photo by Suzy Hazelwood/Pexels)
(Photo by Suzy Hazelwood/Pexels)

Pro Bono Economics calculates that salaries will need to rise by 10 per cent by 2024 to tackle inflation – so if your wage bill is currently £1m, you are looking at spending another £32,600 on wages in 2024 to ensure your staff are not worse off. We know how careful every charity needs to be with their expenditure, so we understand how much extra pressure this will add. Luckily there are things you can do now, to help future-proof your cause.

Charities lead the way with ethical business practices due to their innate desire to make the world a better place. So many of them are (rightly) thinking about wage negotiations as early as possible, recognising many of their staff are likely to be struggling already. The move to home working may mean staff have been hit by soaring energy prices along with their increased usage, resulting in the most expensive bills many have ever had to pay. This is just one example of how times are tougher now, with so many other living costs increasing every day.

It may be difficult to raise salaries by as much as you’d like, to support your people, but you can also look into other ways to support them, such as helping them to apply for the HMRC tax rebate offered to home workers.

One way in which charities can save money is by reviewing their outgoings, finding cheaper providers or renegotiating existing deals with suppliers. We know that insurance premiums are a consideration, too, and ensuring the protection offered is suitable and robust is incredibly important. Good quality insurance cover is a must.

While some research does indicate people are more likely to donate to charity in troubled times, there is a risk that donations will fall as people simply can’t afford to give anymore. On top of this, unless regular supporters increase the amount of their donations, inflation will mean their gifts will be worth less as time goes on. Consider articulating this to your donors – especially those using direct debit – so they are aware of these financial pressures.

It’s also important to attract younger donors; a survey published this spring found that 36 per cent of Gen Z respondents said they felt better off than six months earlier. Younger donors are more likely to give through a website or app, and social media continues to be a critical platform for awareness-raising and income generation. So consider how you can reach this generation of socially-conscious peers – they could have a huge impact on your finances.

Online giving can boost individual donations: suggesting a (relatively high) donation amount on the donations page has been shown to have an impact on the amount people give, so also bear that in mind.

It may be a bumpy road ahead while we all navigate this unsettled time, but, as this article hopefully shows, there are actions that can be taken right now to mitigate at least some of the impact of the cost-of-living crisis.

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