Donations to plummet over next six months due to cost of living crisis, research warns

Charities are being urged to brace themselves for a fall in income from donations over the next six months as rising inflation continues to batter household income.

The warning has been made by the Charities Aid Foundation that found that six in ten (58%) of people plan to cut back on discretionary spending on non-essential items and services over the next six months.

The cutbacks are being made so that households can manage rising cost of living, including a dramatic hike in energy bills from this month.

The cutbacks are being particularly felt by younger people, with almost seven in ten (69%) of 25- to 34-year-olds looking to cut back on their discretionary spending.

Already CAF has noted a link between a fall in donations amid the cost-of-living squeeze. Last month just 25% of people donated to charity over the previous four weeks, compared to 29% the month before. This is a drop of two million people donating to charities.

Also last month one in ten people reported they plan to cut back on charity donations.

The drop in donation income comes as charities anticipate demand will increase as families struggle to meet rising costs. CAF says that nearly nine in ten charity leaders believe demand for services will increase.

“The cost-of-living crisis makes the value of charities’ work more visible than ever, while also placing these same charities under significant pressure as they seek to deliver their essential services and meet increasing demand from their communities,” said Alison Taylor, CAF’s chief executive of CAF Bank and Charity Services.

She urged charities to ensure donations are given effectively, through tax benefits, such as Gift Aid.

“There are also many other ways for people to support the work of charities that do not involve giving more money, such as volunteering your time and skills, which can make a huge difference”, she added.

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