Some 12% of charities are reducing staff numbers as more are turning people away due to the cost-of-living crisis, according to new research.
In response to a survey by the Charities Aid Foundation (CAF), 12% of charities reported having to reduce their staff numbers or make redundancies despite an “overwhelming” demand for their services.
According to the survey, 50% of charities were operating at full capacity, down from 53% in CAF’s previous report published in October.
Of these charities, 51% said they were having to make “judgements to prioritise people most in need”, while 28% created a waitlist and 9% stopped taking any referrals.
An autism charity in the south east of England said: “It now takes two minutes to fill 50 spaces when we open the waiting list to new referrals.”
According to the survey, the proportion of charities having to turn people in need away has risen by three percentage points to 15%.
Less than a third of charities said that they had the capacity to help more people, with one respondent saying it was “stuck in a vicious circle that we are trying to break out of”.
16% considering charging fees
CAF says that a quarter of charities that reported capacity issues were scaling back their offer to focus on core services.
Some 16% of respondents were considering charging fees for services to be able to meet the need, while 41% were signposting service users to other struggling organisations.
The problems charities are dealing with are becoming “more complex”, the survey says, with nearly half of the respondents helping more people in “a state of extreme need” compared with this time last year.
One London-based poverty relief charity said: “It seems relentless. More and more people come to us in even greater need and staff feel helpless to support them all. Those same staff are also struggling themselves.”
Some 40% of respondents reported dipping into their reserves to meet their operational costs with 38% seeking funders’ help to cover increased costs.
Many charities stuck in ‘Catch 22 situation’
Presenting some of these findings at ICAEW’s annual charity conference yesterday, Alison Taylor, chief executive of CAF Bank, said: “This is an underlying trend that we have just seen escalating, frankly, over the last 18 months or so.
“At the same time, one of the real dynamics many charities are facing is around staff costs and that ongoing pressure of lack of availability of staff to recruit and difficulties of retention, particularly as many staff are facing their own cost-of-living challenges and needing to seek higher wages.
“We have around 12% of charities reporting that they’re looking at making redundancies or through natural attrition reducing their staffing volumes, set against 27% talking about increasing pay broadly in line with inflation.”
Neil Heslop, chief executive of CAF, added: “Many charities are stuck in a Catch 22 situation. They face higher demand while struggling with declining income, and significantly higher costs.
“Despite being the last port of call for the most vulnerable in our society, they are having to make very difficult decisions to introduce waiting lists, charge fees or turn people away who desperately need their help.”
CAF surveyed 653 charities based in England and Wales between 8 and 20 December 2023. Most had an income of less than £5m, and the data was unweighted.
Related articles
