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Charities feeling the squeeze amid cost-of-living crisis according to Kreston Charities Report 2023

| Niall Kingsley | 6 March 2023

A survey into the state of UK charities has revealed that charities are facing an uncertain economic outlook, challenging recruitment, and fundamental issues such as a lack of diversity at board level.

The Kreston Charities Report 2023 has been released by the Kreston UK Charity Group, which works with more than 2,000 charities of various sizes offering a range of services across the UK. The survey sheds important insight into the experiences of a wide range of charities across the UK.

At Duncan & Toplis we are proud to be part of Kreston Global, a network of independent accounting firms with a presence in over 120 countries worldwide, and to have contributed significantly to the charities report.

Charities feel the pinch

With Britain in the midst of a cost-of-living crisis and a bleak economic outlook, charities are feeling the pinch. Whether it’s a decrease in funding as donors grapple with their own soaring costs, an increase in demand, or recruitment challenges, charities face an uncertain future.

A large majority of the charities surveyed have seen costs rise over the past 12 months, with a fifth seeing rises of over 15%. This is due in no small part to soaring energy bills and a steep hike in inflation.

Despite the economic turmoil brought about by a mixture of the pandemic, events in Ukraine, and Britain’s rapid fire of prime ministers, encouragingly 73% of charities consider their financial reserves to be sufficient to cover future development plans and contingencies for increased costs or reduced income.

However, the fact that over a quarter of the charities surveyed - not an insignificant number - have insufficient funds is alarming and shows that their futures are far from secure.

Recruitment crisis

Whilst there are contrasting financial positions for charities, one constant was that charities are facing rising costs and limited financial resources when compared to the private sector, with both causing challenges in recruitment efforts.

Inevitably our findings show a large majority of charities have not awarded pay rises that either match or surpass the current high levels of inflation. This is no doubt a major contributory factor that 64% of charities are finding the recruitment and retention of staff more of a challenge than even during the pandemic. 36% have said that the scale of the challenge has remained the same since the pandemic and, tellingly, no charity said it was less challenging now than it was in 2020.

Charities are looking to other, non-financial rewards to entice new recruits and convince existing employees to stay rather than seeking more financially lucrative employment.

Mental health, diversity, and the environment

Elsewhere in the report, 82% of charities said their beneficiaries are more affected by mental health now than they were before the pandemic, and 72% have increased the provision of mental health support for staff/volunteers.

But there are more fundamental issues which the survey explores, including a lack of diversity, particularly at senior level. This is a major worry for the charities we surveyed, with 72% saying they are concerned about a lack of diversity among their Board of Trustees.

Charities are, on the whole, well equipped to deal with cyber security, and environmental issues are increasingly important, with half of the charities saying they are addressing climate concerns despite them not being part of their objectives.

Click here to download the 2023 Kreston Charities Report.


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