The Kreston UK Charity Group which works with over 2,000 charities across the UK has surveyed 80 charities on the financial outlook for the sector, the challenges and risks being faced and attitudes surrounding subjects such as diversity, recruitment, digitisation and sustainability and the key findings are:

  • Almost half of charities believe their financial outlook is positive for 2024.
  • Charities are increasingly exploring options to diversify their income streams.
  • 81% of the charities have seen wages rise in the last 12 months, 76% have seen energy costs rise and 78% have seen insurance costs increase.
  • 54% are finding it difficult to recruit and retain employees and 29% believe it has become harder in the last year.
  • Increasing salaries is the most popular incentive used to attract and / or retain employees in the last year.
  • 51% have difficulties finding volunteers and 23% believe it has come harder in the last year.
  • Most charities will not be focusing on more ESG/sustainability in 2024.
  • HR and IT are the skills that charities are most likely to be missing amongst their trustees.
  • Charities see reduced funding as the biggest emerging risk in 2024.
  • 59% believe the Labour Party will have the greatest impact on their charity if they come into power after the next general election.

Despite the uncertain economic times it is good to see that many charities are confident with their financial outlook. Many charities are experiencing pressure on their income streams and 67% of those surveyed are exploring options to diversify. This includes growing major donors, grants, trusts and foundations, legacies, and corporate giving.

The fact that charities are struggling with recruitment and retention could be due to the risks associated with the sector. Charity boards are acutely aware of the risks involved with running a charity and a third of those surveyed now review their risk register at every board meeting.

Of the charities surveyed 86% have not been affected by a cyber-attack in the last 12 months however the risk of this remains high and can have a significant effect on the charity’s ability to deliver services. They need to remain vigilant and be well equipped to deal with this type of threat.

The political uncertainty which a General Election brings is frustrating for many charities and the majority believe a change of government will make no difference to their charity, suggesting the sector has fallen out of political favour in recent years. Back in 2010 the Big Society was a key pillar of most party manifestos.

Sam Rouse Partner at Kreston Reeves comments: “It is good to see that charities are remaining resilient and despite all of the challenges of the last few years, 80% believe they have the capacity to deliver their required services in 2024. The contribution all of these charities make to our communities up and down the UK is vital and we should all play our part in supporting their work, volunteering and where possible making a donation to those causes close to us as we will really miss them if they were no longer there.”

You can download a full copy of the report at https://www.krestonreeves.com/sectors/charities/#related-resources.

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