‘Perfect storm’ of financial concerns impacting charities, report reveals.

More than seven in ten charities in Scotland are concerned about their organisation's finances, a survey has found.

Challenges around the financial health of charities are cited as the most common concern among charity representatives in Scotland.

Financial pressures around rising costs and fundraising were cited by 71% of respondents, according to figures from Scottish Council for Voluntary Organisations’ Scottish Third Sector Tracker.

This survey was carried out in Spring 2023 with the findings just published by the charity infrastructure body.

Almost all charities (94%) reported inflation is impacting at least one area of their organisation, in particular rising costs of materials and energy costs.

Meanwhile, staffing and volunteer pressures are the next most common challenge, cited by just under two thirds of charities. This is almost double the proportion of charities reporting such concerns in August 2021.

Planning concerns were cited by almost two in five.

This is leading “to a perfect storm for charities and voluntary groups, with strain put on already stretched teams”, according to the SCVO.

SCVO chief executive Anna Fowlie said: “At a time where many organisations are facing recruitment challenges, the funding environment means that many voluntary organisations are struggling to keep pace with salary increases needed to attract and retain staff.

“Existing staff and volunteers have been working flat out since Covid, helping organisations and communities to weather the cost-of-living crisis.

“We can no longer afford to rely on their goodwill to go the extra mile. The invaluable services and supports provided by Scotland’s voluntary sector need sustainable investment to ensure their survival.”

Volunteer Scotland chief executive Alan Stevenson added: “The many impacts of the cost-of-living crisis on volunteering has meant that we can no longer take for granted the contribution of our volunteers.

“While recruitment and retention issues are being felt more acutely by some, the first step for all must be the focus on good volunteering practice, appropriately supported.”