Half of charity leaders warn that their organisation is considering making staff redundant amid concerns around dwindling funding and rising costs, a survey has found.

The survey of 100 senior charity executives carried out by financial firm Rathbones found that all bar one are warning that current funding levels are not matching the costs they face.

One in ten are operating at a deficit and four in five say their charity is plundering its reserves to maintain services.

To tackle the financial pressures they face, half are considering cutting staff numbers over the next year.

More than two in five are not looking to replace staff who leave, and the same proportion are looking at selling property and other assets to boost income.

More than one in three are looking at cutting back or closing services.

Two in five charity leaders say they are considering halting stock market investment to ease financial pressures. This is despite four in five say their investments have increased in the last year.

“Charities are under acute pressure as rising costs and weaker income force difficult decisions about staffing, services and the use of reserves,” said Rathbones director of charities David Cox.

“The fact that so many organisations are considering redundancies or selling assets underlines the scale of the challenge facing the sector.”

Cox added: “While there are signs of optimism that income may recover, this research shows how important it is for charities to have a long-term financial strategy.

“For those with investible assets, well-managed portfolios can play an important role in supporting resilience, helping charities generate income and continue delivering for the communities they serve.”

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