Cost of living crisis causes charity donations to slump

ITV News Consumer Editor Chris Choi reports on the crunch facing the charity sector

UK charities are reeling from a financial crunch, according to research given to ITV News shows how.

As donors come under cost of living pressures, new figures show many good causes fear they will not survive at a when funding falls coincide with a rise in demand for help. 

The chief executive of Yorkshire Brain Tumour Charity, Marie Peacock, told ITV News: "It's been absolutely horrific, the drop in donations... where people could afford to give £10 now they can only afford £1 or £2... our income is 48% down so far this year"  

A survey of over 500 charities by the Charities Aid Foundation given to ITV News shows 80% concerned about covering even basic utility costs, with 35% now fearing they won't survive.

Charities Aid Foundation, CEO, Alison Taylor, explains how many good causes have eaten into their reserves

Demand for crisis help has increased 44% in 12 months, according to Citizens Advice. The Chief Executive of the Magic Breakfast charity, Lindsey MacDonald, explained: "In terms of our average gift we've seen that nearly halve since September 2021."

She says the charity will survive thanks to its broad range of support but adds "we are seeing increased demand and also seeing rising costs".

About a third of all good cause donations are direct debits, which don't rise with inflation. Charities hit by cost of living rises now also face a cost of giving crisis. 

Alison Taylor of the Charities Aid Foundation says around 40% of good causes ate into their reserves to get through the pandemic.

"An increase in demand is unquestionably there and charities are trying to meet that with falling donations and increased costs themselves, so it really is a perfect storm," Taylor says.  

This new research from the charity sector shows that organisations which help others are now in urgent need themselves.