We now know that there’s another crisis coming but, more alarmingly, our Sector Data Store shows that sector resilience has been falling since 2021 – long before the latest crisis. Our predictive model suggests that the impact may be much worse this time. As usual, it will be the vulnerable and those in poverty who suffer most, and they will need charities and faith groups more than ever. In response, Charity Excellence has launched its #SurviveAndThrive programme (https://bit.ly/3UdevRd) to support charities through the crisis. This article explains why we think this crisis may be worse and offers ideas on how you might respond.

A coming crisis?

I’m already reading about calls for funders to step up and increase their funding and there will be calls on government to provide some sort of additional support. Our (very crude) estimate of total Covid funding was £5bn and it was so large, it seems unlikely that this amount could be made available again. All charity fundraising income streams, except arguably retail, fall during tough economic times. At the same time, costs will increase. Inflation is driving up costs across the board, but hitting those on lowest incomes the hardest. This, combined with the likely funding shortfalls in public services, will further drive an increase in demand for charity services. For those able to meet this demand, that will further increase costs. It seems fairly certain that we’ll be caught in the crossfire between an increasingly challenging fundraising environment and rising costs. I suggest finance and trustee teams need to do three things – get clarity on your financial position and sustainability planning, grow fundraising and control costs. The last is too often overlooked but can be a real opportunity.