Charities warned to expect extra scrutiny from the public during the UK cost of living crisis

Article Experience

The Chief Executive of the Charity Commission, has warned that charities are likely to face extra scrutiny in the coming months, as a cost of living crisis looms, with new Chair of the Commission, Orlando Fraser, writing in a similar vein that charities need to “justify every penny” of their spending in an article published in the Daily Telegraph last week.

The Commission’s CEO was speaking at an event hosted by the Wales Council for Voluntary Action last month and acknowledged that many charities will face a “double squeeze” with the cost of living crisis likely to cause surge in demand for some services whilst at the same time those who feel less well-off may give less. Evidence is emerging that giving is being adversely affected with the Charities Aid Foundation reporting a decrease in charitable giving earlier this year – for example, finding that 4.9 million fewer people are making donations to charity. Charity staff and volunteers are also likely to be significantly impacted by the cost of living crisis. The Living Wage Foundation has recently revealed that one in seven third sector workers are paid below the real living wage.

A group of charities (including Community Transport Association, the National Council of Voluntary Organisations, and the National Association for Voluntary and Community Action) have requested that the approved mileage allowance payment (AMAP) for employees and volunteers be increased in line with inflation, among reports that volunteer-run transport services in particular are at risk as volunteers’ expenses are not being fully met under current AMAP provisions and as a result volunteers cannot afford to continue helping.

Think Tank New Philanthropy Capital has suggested that the charity sector needs to mobilise to address cost of living much in the same way that the sector made adjustments during the pandemic. Stephenson explained that while the Commission will not “pounce” on charities due to media attention, this does not mean that legitimate concerns, mistakes, or misjudgements will not be taken seriously by the Commission. Orlando Fraser reiterated this point, explaining that charity trustees need “to keep in mind at all times that one of their most basic legal duties is prudence”.

The Living Wage Foundation’s report can be accessed here and New Philanthropy Capital’s review of the impact of the cost of living crisis can be found here.