UK charity sector ‘increasingly fragile and unsustainable’, warns NCVO

UK charities are facing extra competition for a shrinking pool of donations and grants, a shortage of volunteers, and rising costs, says the latest annual The Road Ahead report from NCVO.

The key trends highlighted in The Road Ahead are:

• Shortage of volunteers – it says that only 16% of adults take part in formal volunteering at least once a month, the lowest level in a decade
• Less financial headroom – it highlights that 1 in 4 charities used their reserves during the pandemic
• Changes to public giving and finding – fewer people are donating, especially among younger generations, while grant applications have grown by as much as 50%
• Rising costs – including operating costs, and increases to mandatory National Insurance Contributions recently announced by the Government
• Uncertainty caused by global volatility – which NCVO says means charities need “to be scenario planning consistently to prepare for these moments of change”

The financial section of the report quotes from the CAF UK Giving Report 2025, released the previous month. It shows that the British public donated an estimated £15.4bn in 2024, the number of people who gave last year was 50%. This has declined from 59% in 2019 – the equivalent of around 4m fewer donors.

Among those aged 16-24, the fall is even greater, from 52% six years ago, to 36% last year.

Another concerning trend relating to fundraising is highlighted by Alix Bedford, customer and partnerships manager at Zurich, which partnered with NCVO on the report. In it, she comments:

“Technology is impacting the public’s choice to give. Whereas previously people may have taken unwanted items to charity shops, apps like Vinted have made it easier for people to sell items themselves and keep the money. At a time when people are looking for ways to make additional income, selling instead of donating is a compelling offer. This creates a risk for charities who have retail or donation models.”

Amid all the gloom and worrying trends, NCVO does retain some optimism. An NCVO statement says:

“Charities have become the backbone of our communities, stepping in where public services can no longer meet demand. But many are struggling, especially financially, making the sector increasingly fragile and unsustainable.  

“But, while funding constraints and political, economic, environmental and legal complexities present ongoing challenges, a wealth of opportunities still exist for innovation, digital transformation, and enhanced community engagement. And with the right strategies in place, charities will continue to be a force for positive change in 2025 and beyond.”