Could a lack of available funding be stifling the charity sector?

A group of volunteers wearing blue tops walking together across a field, with their arms wrapped around one another.

Are charities running short of options to enable them to continue to provide their services in the face of such high demand?

The Charities Aid Foundation (CAF) alluded to this problem at the end of 2022. According to their research only 49% of charities they surveyed in November 2022 felt confident that they had the funds to meet current demand.

In May 2023, here at Markel Direct, we ran our own charities survey to discover how the economic climate was affecting organisations in the third sector.

The results of which hinted at a similar level of concern. 76% of respondents said they had experienced a fall in public fundraising in the previous 12 months. Yet only 15% said they had sought new financial support in the same period.

Looking deeper into the data, when we asked what the organisation’s biggest concern was, we found the greatest concern of charities (33%) was the lack of availability of charity funding.

On the back of this information, we ask, could a lack of available funding for charitable organisations be stifling the third sector?

Charities falling short in meeting demand

Whether they are to provide food, mental health services, community activities, or warm spaces for people, charities have all stood up to be counted to help the lives of those who need help throughout the pandemic, and now deep into the cost-of-living crisis.

The sector has provided educational support and support to those with serious mental health impairments, as well as serving as a very able support partner to help cover backlogs in public services.

As a result, people are seeking more assistance for the charity sector, and that help is being required for longer periods of time. What is a concern is that 1 in 5 charities expect to fall short in meeting demand.

What options do charities have to help them meet demand?

The two most obvious options are to increase the number of staff and volunteers, and increase funds.

We have already mentioned earlier in this article about the challenges charities are facing regarding fundraising. In another article we recently wrote, we covered the issue of charities struggling to attract volunteers and other staff.

A third option that charity organisations could consider is external funding, either from the bank or from another funding source. In our survey, 33% of charity respondents told us that they were concerned with the lack of funding available to them.

In response to this, we looked online to see what funding was available to charities. It was clear that UK-wide charity funding was only available based on certain parameters, such as for research projects. It was also clear to us how difficult it was to actually find funding options for charity organisations. Anyone who works online will know that you can sometimes run specific searches for hours and still not find what you are looking for.

The difficulty in finding charity funding options in the first place is no doubt slowing things down for charities who need financial help, and that is before the charity even goes through the application process.

From our survey it is obvious there is a concern that lack of funding is potentially stifling charity services and is adding to their pressures.

Where can charities find funding opportunities?

Fear not, there is still a range of funding options out there for charities and small businesses alike. In our recent article ‘What sources of funding are available for the UK Charity Sector?’ we listed 15 of the best options that we found online. These range from small business funding and grants to charity grants and funding for specific initiatives.

A very good place to start is Supporting Communities which is an online resource which lists up-to-date details of funding available to charities, non-profits, and community groups.

Visit our help and guidance hub for charities here.


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