Charities and the continuing cost of living crisis

Recent research published by the Charities Aid Foundation as part of its Charity Resilience Index shows that:

• 57% of charities have seen an increase in demand for their services over the past year, with charities in the North of England among the hardest hit with a 67% increase
• Less than a third of charities are highly confident in their funding
• More than half of charities are worried about their survival

All of the charity regulators across the UK have addressed the crisis by updating their guidance. Whilst this often just refocuses existing guidance rather than offering anything new, it can be a useful reminder for trustees on issues they need to consider when tackling the financial challenges faced by charities. The CCEW guidance stresses the need for trustees to continue to act in their charity’s best interests and to act prudently and with reasonable care and skill at all times, taking advice when necessary. It goes on to set out what needs to be done when financial difficulties are being experienced and the need to develop options to support the continued operation of the charity, or in the worst case scenario what to do if the charity is unable to continue. Similar guidance has been published by OSCR and CCNI, and all of the guidance provides useful links to other sources of information and guidance.

For many charities the rising cost of fuel and energy is the main source of concern. As the days lengthen and the temperatures slowly start to creep up you would hope that the financial pressures placed on charities from rising energy costs would start to ease, but this may not be the case. The initial Energy Bill Relief Scheme for non-domestic customers came to an end on 31 March to be replaced by the less generous Energy Bills Discount Scheme. This is planned to last for a year until 31 March 2024 and will have three components:

• A baseline discount that will apply automatically to eligible non-domestic customers across the UK including voluntary organisations.
• The Energy and Trade Intensive Industries (ETTI) discount that provides a higher level of support to businesses and organisations in eligible sectors. Certainly some charities may be able to take advantage of the ETTI discount as it covers museum and library activities for example,
• The Heat Network discount that will provide a higher level of support to heat networks with domestic end customers.

Both the ETTI and Heat Network discounts have to be applied for by businesses and organisations who believe they qualify for higher levels of support.

CAF Charity Resilience Index | How the cost-of-living crisis is affecting the sector

Gov.uk: Manage financial difficulties in your charity arising from cost of living pressures

OSCR Scottish Charity Register: How to manage your charity during tough times   

The Charity Commission for Northern Ireland: Blog: supporting staff and volunteers during the cost-of-living crisis     

Gov.uk: Energy Bills Discount Scheme