It is well documented in the press, social media, radio, and television about higher living costs affecting households across the UK. Some families have the unenviable choice of heating or eating which is an extremely distressing position for anyone to be in. Families where they have to use medical equipment to maintain their health, are facing staggering increased costs in electricity to use this lifesaving equipment.

 

This current economic crisis also applies to charities who are trying to provide support to households. Many charities are experiencing reducing donations, but just like other companies have increasing costs of employment.

 

The number of people giving to charity in the UK is declining significantly, according to research from the Charities Aid Foundation (CAF). Between January and April 2022, an estimated 4.9 million fewer people said they donated to charity or sponsored someone in the previous year, compared to the same months in 2019.

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It has been reported that the number of people asking for help from the Citizen’s Advice Bureau (CBA) has hit a record high. By the end of 2022 the CBA  supported 57% more people than the previous year with access to crisis support.

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The most recent NCVO almanac found that staffing costs account for 37% of total charity sector expenditure, or around £20.4bn. For charities to ensure that wages do not fall in real terms because of inflation, they would need to spend an additional £2bn in 2024, an increase in total wages of 8.8% from 2021.

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There is a risk that as costs rise, and the income of overall charities falls, they will struggle to keep the vital support they are providing to families across all sectors of the country. UK charities’ real-terms income will fall by £2.2bn by the end of 2023/24, a think tank warned after Chancellor Jeremy Hunt’s Autumn Statement.

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However, with the help of the Legacy Funding Company, charities, unlike most businesses, have an option of obtaining income now from bequeathed funds that are currently sitting in probate.  Your charity will know that they are due a legacy from the executors, the only unknown is when the charity will receive the legacy payment, we simply advance on receipt of the completed application up to 70% of the legacy.

If you consider that Legacy income is forecast to reach a record £4 billion by the end of 2023, an increase of 14% on the previous year, a reflection of the buoyant housing market over the last two years and some recovery from ongoing issues in the probate administration process.

This is not following the trend of charity donations, but is welcome news for the charity sector and with our help we can assist you in accessing those funds as soon as possible.