More than a third of charity leaders fear their organisation will struggle to survive the cost-of-living crisis, a survey has warned.

They fear that record inflation has created a “perfect storm” for charities, who face increasing demand from vulnerable communities as well as falling donations.

The survey by Charities Aid Foundation (CAF) found that nearly nine in ten (86%) are worried about the impact of inflation on their beneficiaries and around three in five (59%) are concerned that people will have less money to donate.

This double threat has left 35% of charity leaders fearing that their organisation may be forced to close.

Charities are also concerned about rising costs for their organisation, with more than eight out of ten (82%) worried about rising cost of energy bills, rent and fuel. While nearly two thirds (65%) are worried about higher costs of stock, equipment and supplies.

More than 500 charity leaders, working in areas including health, youth services, disability support and counselling, took part in the survey during April.

Last month CAF revealed that six in ten people plan to cut back on discretionary spending on non-essential items this year. CAF also noted a fall in donations earlier this year, with two million fewer people giving to good causes.

“Charities are impacted by the cost-of-living crisis on many fronts,” said Alison Taylor, chief executive of CAF Bank and Charity Services.

“Many more people in their communities are likely to rely on their support - from food banks, mental health and disability support to organisations offering financial guidance.

“For many charities however, their resources are stretched after two years supporting their communities throughout the pandemic, and they are also having to find the funds to pay higher costs.

“With tightening household budgets impacting donations, there is a perfect storm facing the sector, and sadly, there are likely to be some charities unable to survive this year.”

Pro Bono Economics warned in March that rising inflation could cost the charity sector £8bn over the next four years.

Last month official figures showed that the consumer price index rose by 7% in the 12 months to March, up from 6.2% in February.

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