Despite a challenging economic climate, the charity sector has seen growing support from the public, businesses and volunteers but pressures on finances are becoming increasingly difficult to ignore.

A growing impact across the charity sector

In 2023, registered charities spent £95.7 billion delivering their charitable aims an impressive 9.6% increase compared to 2022.

This surge in spending reflects the sector’s determination to meet rising demand, even as the cost-of-living crisis continues to affect households across the country.

Much of this work is underpinned by the public’s generosity, with donations and legacies reaching £31.4 billion, almost a third of all charity income.

Businesses are also stepping up, with almost half of charities earning over £100,000, receiving donations from corporate partners.

The essential role of volunteers

Volunteers remain at the heart of the charity sector. In 2023, they outnumbered paid staff by more than three to one.

Around 70% of charities reported support from volunteers, while only 50% employed paid workers, the vast majority of whom are based in the UK.

Financial pressures are mounting

While income and donations are rising, so are costs and many charities are feeling the strain:

• Expenditure grew by 9.6%, while income increased by only 6.8%.
• The gap between income and spending has narrowed to £0.7 billion the smallest in five years.
• 6% of charities reported spending more than they earned in 2023.

With limited reserves and increasing demand, some charities are finding it harder to invest in long-term projects or adapt their services to changing community needs.

Demand for support continues to rise

More people than ever are turning to charities for help. In 2023, around 9% of people reported receiving food, medical, or financial support from a charity up from just 3% five years ago.

This growing reliance highlights how vital the sector’s work has become but also underlines the importance of sustainable financial planning.

Helping charities make sense of their numbers

At Nicholsons, we work closely with charities to help trustees and managers understand their financial position and make informed decisions.

We support organisations by:

• Making sense of complex figures, turning financial reports into actionable insights
• Planning for sustainability helping charities manage reserves and plan for long-term stability
• Supporting funding applications, ensuring financial information is clear and compelling when applying for grants or raising finance
• Adapting to rising costs, offering guidance on budgets and forecasts to stay on track

By gaining a clearer understanding of their numbers, charities can plan more effectively, secure funding with confidence and focus on delivering their mission.

Final thoughts

The charity sector continues to demonstrate remarkable resilience, with growing public support and rising volunteer numbers.

However, with financial pressures mounting, clear financial insight and strategic planning are more important than ever to ensure that charities can continue making a difference where it’s needed most.

Want to learn more about our services for charities, please click here or contact us.