One-third of charities will struggle to survive because of the effects of the cost-of-living crisis, according to a survey of sector leaders.
The research, conducted by the Charities Aid Foundation, described the combination of lower donations and rising demand for services as “a perfect storm” that will increase pressure on charities.
With inflation set to rise further later this year, driven by increasing energy prices, about 60 per cent of the more than 500 leaders surveyed said they were worried about people having less money to donate to charity.
More than 70 per cent said they were concerned about their charity’s ability to manage increasing demand from service users.
Charities face rising costs, including their own fuel and energy bills (identified by 82 per cent of leaders), pressure to increase wages (80 per cent) and the cost of stock (65 per cent).
CAF said in March that more than one in 10 of the public planned to donate less to charity in response to the financial situation.
Alison Taylor, chief executive of CAF Bank and Charity Services, warned that the cost-of-living crisis would force some charities out of business during the next 12 months.
“Charities are impacted by the cost-of-living crisis on many fronts,” she said.
“Many more people in their communities are likely to rely on their support, from food banks, mental health and disability support to organisations offering financial guidance.
“For many charities, however, their resources are stretched after two years supporting their communities throughout the pandemic, and they are also having to find the funds to pay higher costs.
“With tightening household budgets impacting donations, there is a perfect storm facing the sector and, sadly, there are likely to be some charities unable to survive this year.”
The data is based on a survey of 547 charity leaders, conducted last month by the polling company YouGov.