Third sector representatives have warned the Scottish Government that work done by charities and voluntary organisations cannot continue without multi-year funding.
Key public services could be at risk as new research shows a significant number of voluntary organisations across Scotland are seeing rising costs affect their ability to operate.
Research published as part of the Third Sector Tracker, a partnership project on behalf of groups including the Scottish Council for Voluntary Organisations' (SCVO), shows the growing challenges facing charities and voluntary groups.
Data gathered in March and April this year shows that Spring 2022 saw the cost of operating increase for most organisations, impacting their ability to deliver core services.
Voluntary sector services are essential to the wellbeing of people in Scotland - particularly during trying times such as the cost of living crisis, just as they did during the Covid-19 pandemic.
In the past two years the importance of Scotland’s voluntary sector has been underlined, with the co-ordination of food and grocery support, alleviating mental health and wellbeing issues, such as befriending, and digital inclusion work to reduce isolation all carried out by the sector.
A large majority (86 per cent) of organisations also reported rising costs since December 2021, with the most common rises being: cost of materials and supplies (63 per cent); transport costs (53 per cent); staffing costs (47 per cent); and energy costs (45 per cent)
Of organisations seeing rising costs of any kind, 42 per cent felt this affected their ability to deliver their core services or activities.
With groups across Scotland facing challenges, the three months to April 2022 saw just half (50 per cent) of organisations able to meet or exceed their planned programmes or services. A further 43 per cent were able to meet them partially.
Although many remain confident of continuing, SCVO believes that planned, multi-year funding is key to ensuring that vital public services provided by charities and voluntary groups can continue.
Kirsten Hogg, head of policy, research & campaigns at the Scottish Council for Voluntary Organisations (SCVO), said: “Far too many voluntary organisations are left wondering what, if any, funding they’ll receive to continue programmes and services from year-to-year.
“Voluntary organisations need to see the funding they receive from the public sector keep pace with inflation. Without this, large swathes of charities will be left with shrinking budgets at a time of rising demand, putting services at risk and leaving them unable to pay staff fairly.
“We cannot continue to see unnecessary expectations being placed on voluntary organisations that are not felt by their public sector equivalents. If the third sector is expected to continue providing lifeline services, this cannot be done without an ability to plan for the future.
“Core funding must be expanded to ensure that organisations can meet running costs. It is not possible for a service to exist without an organisation to deliver it. Organisations need flexible investment to keep the lights on, to innovate and to continue their critical contribution to Scottish society.”
A Scottish Government spokesman said: “We recognise the impact that rising operating costs are having across society, including on charities and voluntary organisations.
“The Scottish Government continues to invest widely in the third sector. We have committed to increase multi-year funding for the third sector and where possible we will do so. However, our ability to fulfil our devolved responsibilities remains a significant challenge due to the UK Government’s budgeting approach.”