Research shows organisations need to maximise return on investments
Charity fundraisers and volunteers are being forced to dramatically scale back support to concentrate on their own finances due to the cost-of-living crisis.
New research from wealth manager Rathbones, which helps more than 3,000 charities manage their investments, is warning that the slump in fundraising and volunteering will hit the finances of charities hard highlighting the need to focus on maximising returns from their investment portfolios.
Data shows over a quarter (27%) of over-16s volunteered at least once with a charity in 2021/22 and the public contributes around 48% of the sector’s total income.
Rathbones’ research shows around 21% of people who regularly raised funds for charities before the cost-of-living crisis have now stopped any activity while around a fifth (18%) of volunteers have completely stopped working for charitable organisations.
Even among those continuing to raise funds and volunteer, increases in the cost of living are having an impact. Half (50%) of regular fundraisers say they have cut back on activity while a third (33%) of volunteers are able to spend less time supporting charities.
Cutting back on fundraising activities has inevitably hit the amount of money raised with around 46% saying they are now able to contribute less to charities. Around 29% say they are unsure about the impact of cutting back on the amounts raised while 18% say it has had no impact. Around 7% say they are raising more money as a result.
The reduction in the amount of time spent volunteering will have a major impact – volunteers questioned estimate they spent around nine hours a month working for charities before the cost-of-living crisis.
A quick recovery in fundraising activities and volunteering looks unlikely – around a half (53%) of regular fundraisers are unsure when they will be back to normal while 35% of volunteers do not know when they will return to previous levels of support for charities.
There are some bright spots among the gloom – more than a quarter (28%) of fundraisers have stepped up activity since the cost-of-living crisis while 8% of volunteers are putting in more hours with charities.
Andy Pitt, head of charities at Rathbones said: “The UK economy as a whole is still feeling the impact of the cost-of-living crisis and that has inevitable knock-on effects for charity fundraising and volunteering.
“The scale of the cutbacks is very worrying, as if fundraising and volunteering activity is down, this will have a direct impact on the income they can generate and may impact on the services they can deliver.
“What we have seen from working with our own clients is that charity investments are being used to plug the funding gap, and it is more important than ever that they make the best use of their investment portfolios to ensure they can continue to deliver vital services for their beneficiaries.
“Charities are feeling the effects on their finances. We are working tirelessly with our clients in the charity sector to help them make the best use of their investment portfolios to ensure they can continue to deliver vital services for beneficiaries.”
