Over two thirds of charities report a rising demand for services over the past year

The Charities Aid Foundation has surveyed over 5,400 charity leaders across 33 countries and has published its 'World Giving Report: Charity Insights'.  

The report outlines that 67% of charities have experienced an increased demand for their services over the past year. This reflects the increasingly challenging environment within which charities are operating.

47% of charities have reported an increase in demand to a level in which they have found it 'hard to cope'. Many expect demand to increase further. Homelessness charities have experienced the biggest increase in demand for their services and are among those facing the most significant difficulties.

Coupled with this, a reduction in government aid and a challenging financial environment has meant that a third of charities used their savings or reserves to cover their shortfalls in income over the last year.

Part of the problem is the composition of funding that charities commonly rely on. On average, 64% of a charity's funding is restricted to specific activities. Half of the charities surveyed note that this makes it difficult to achieve their goals. The funding streams that are the most tightly restricted are those from other countries' governments, intergovernmental organisations and international grant makers.

Half of the respondents felt that without external funding, their charities would not last six months before having to close. Smaller charities are more likely to experience concern about future success than their larger counterparts.

A priority for charities should be to further emphasise the important role that charities play in society as a way to boost funding. It was reported that the charities that feel confident in the diversity of their income streams, are over three times more likely to feel well set up for success in the future.

The Managing Director of the Charities Aid Foundation notes that whilst only 19% of charities see communicating their impact as being a key issue facing them, 63% understand this to be an important consideration in the decisions they make about giving. This is an indication that impact reporting is a key way for charities to build long-term resilience.