Charity volunteers collect rubbish in a park

21 Feb 2024

Financial resilience a major concern for charities in 2024 research shows

Charities are feeling the sharp end of the cost-of-living crisis as they battle daily with the fall out on the front line. 


The situation is now so extreme that senior charity executives are increasingly concerned about the financial health of the sector as organisations face dramatic falls in income while demand for their services grows. Many are being forced to run down their investable assets to meet day-to-day running costs as they contend with the continuing squeeze on income.

This is according to new research commissioned by Investec Wealth & Investment (UK) whereby the market research company Pureprofile interviewed 100 senior executives at some of the UK’s largest charities to capture their views on the financial health of their organisations and the challenges they are facing. Those taking part in the survey included board directors, finance directors, investment managers and investment directors at the charities.  Collectively, the charities interviewed have £3.34 billion of investible assets.

Our research shows that more than two out of three (67%) say the financial health of their organisation has deteriorated since the cost-of-living crisis started, with 13% saying it has deteriorated dramatically. Around one in three (30%) rate the financial health of their organisation as average or poor.

A dramatic drop in income is the key driver for the rising concerns about financial health, our research found. More than nine out of 10 (91%) senior executives questioned say annual income has fallen during the cost-of-living crisis with 44% saying it has fallen by a fifth or more.

At the same time, the research found demand for charity services is continuing to rise. Around 45% of senior charity executives questioned say their organisation is being asked to do more while around 34% say demand for services has dropped during the cost-of-living crisis.

The mismatch between income and rising costs driven by demand is forcing drastic action – around 57% say they have sold assets such as property to generate extra income while half (49%) have cut back on services and 45% have reduced headcount across their organisation.

More action is expected in the next 12 months with 45% saying they are considering the sale of properties while 42% are considering headcount reductions and 41% cuts to services. Around two-fifths (40%) say they will stop investing in the stock market.

Value of investable assets has dropped

Our study found nearly two out of three (65%) senior executives at UK charities say the value of their investable assets has dropped in the past two years with 23% saying the value has dropped dramatically.

The biggest reason is forced sales to enable the charity to raise money to maintain services – 64% questioned said their organisation had cashed in or sold investments to compensate for a drop in income due to the impact of the cost-of-living crisis and the pandemic. Most recent National Council for Voluntary Organisations data for 2019/20 shows charities spent 97% of their income.

However, it is not just the income squeeze reducing charities’ investable assets – nearly a third (31%) blame poor investment management decisions while 53% say the value of assets has been hit by stock market conditions. Around 58% say the income they earn from their investments has dropped forcing them to cash in on assets to compensate while 41% say increased demand for their services has forced asset sales to provide funds.

We work closely with charities to help deliver optimal returns on their investments integrating ESG considerations into all stages of the investment process ensuring that it invests in companies and issuers that align with clients’ values. We manage more than £3.5 billion for more than 1,100 charity clients and are committed to delivering positive outcomes for charities in ways that go beyond consistent investment returns.

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Investec Wealth & Investment (UK) is a trading name of Investec Wealth & Investment Limited which is a subsidiary of Rathbones Group Plc. Investec Wealth & Investment Limited is authorised and regulated by the Financial Conduct Authority and is registered in England. Registered No. 2122340. Registered Office: 30 Gresham Street. London. EC2V 7QN.