Spiralling costs caused by inflation is one of the biggest risks facing the charity sector in the UK, according to the latest edition of the Charity Risk Barometer report from ICMIF member Ecclesiastical Insurance.

Earlier this month, the specialist insurer published the third edition of its Charity Risk Barometer, an in-depth study exploring the immediate and emerging risks facing the charity sector in the UK – with the cost-of-living crisis proving to be an unavoidable factor.

Counting the cost

Over 250 charities were surveyed with over four in five (85%) saying they were concerned about increased running costs, while loss of funding was the greatest concern for seven in ten (71%) charities. Almost a third (30%) said they had become more concerned about a loss of funding in the last 12 months.

Earlier this year, Ecclesiastical’s owner, Benefact Group, published its Value of Giving report which identified a GBP 5 billion drop in donations in from 2021 to 2022.

Recruitment crisis

Against this backdrop almost three-quarters of charities (72%) were concerned about attracting and retaining talent in the sector. Earlier this year Pro Bono Economics and Nottingham Trent University published findings revealing more than two thirds (70%) of charities found it difficult to recruit and retain staff last year, with poor pay in the sector contributing to the challenge.

Hope for the future

Despite a bleak picture, there are some positives to report. Ecclesiastical says its Charity Risk Barometer in 2020 showed the sector did a lot of work during the pandemic to create leaner, fitter and more adaptable operations. From this foundation charities are showing adaptability and creativity in navigating the challenges facing them.

Most of all, charities are continuing to meet the needs of their users. Even as pressure grows, they continue to develop and deliver services that make a positive difference to the lives of the people and causes that need them most.

Faith Kitchen, Customer Segment Director at Ecclesiastical Insurance, said: “The charity sector has worked relentlessly to adapt and overcome challenges thrown in its way over the last decade. Austerity was followed by the pandemic and now charities are under pressure to meet a spiralling increase in demand as the cost-of-living crisis bites – all while feeling the pinch of a challenging financial landscape.

“What this research has shown us is that once again the sector is showing resilience in the face of all these challenges. Many have a realistic view of the difficulties they face and can be agile in the measures they take to mitigate risk. They face real threats, but from a solid position.

“We want to support charities through these challenges. As a leading insurer of charities in the UK our ambition is to be a strategic partner to the charity sector. Our research and the resources we have available can not only help customers identify and manage their risks but also deliver solutions for the longer term. Our message to charities is that we are here to help them navigate this new normal, they don’t have to face these challenges alone.”

Read the full findings of the Charity Risk Barometer.

Movement for good awards provide further support for UK charity sector

Also this month, Ecclesiastical further demonstrated its ongoing support for the charity sector with the invitation to people in the UK to nominate school and education charities as part of Benefact Group’s Movement for Good Awards.

Now in their fifth year, the Movement for Good Awards will once again see more than GBP 1 million gifted to charities across the UK and Ireland.

As Ecclesiastical is part of the Benefact Group, it took part in encouraging people to nominate school and education charities to win one of ten GBP 5,000 special grants.

Mark Hews, Group Chief Executive of Benefact Group, said: “Through our Movement for Good Awards special grants we’re encouraging everyone to nominate a children and young people charity. Benefact Group is the third largest corporate donor in the UK and has an ambition to be the biggest. Owned by a charity, all of its available profits go to good causes, and the more the Group grows, the more the Group can give. As a family of independent, specialist financial services, we are grateful to all our supporters, including the customers of the trusted specialist insurer, Ecclesiastical, and the responsible and sustainable asset manager, EdenTree. Our Movement for Good Awards will continue to help charities nurture the next generation and we know that for many children and young people charities, GBP 5,000 can make a real difference.”

Benefact Group has donated over GBP 200 million to charitable causes since 2014 and has been recognised as the third biggest corporate giver in the UK. The organisation aims to reach GBP 250 million in donations by 2025.