More than half of charities fear they may not be operating in the next five years amid concerns around rising costs, increasing demand and dwindling funding, respondents to a survey have revealed.

Among charity sector representatives surveyed more than two in five are either making roles redundant or pausing recruitment. A similar proportion say they are reducing or changing services they offer.

More than half say falling donations are making it harder to cover energy costs and three in five say that heating “is now a luxury or some organisations”.

One charity sector respondent said the rise in energy costs has “made us very cautious” and “it does make us think before we go and offer [an employee] a few more hours”.

“I think it should be a priority for everyone, but it can be hard when you are small [charity], as it tends to be one person dealing with lots of different areas. Therefore, [it] can be difficult to get the right advice - and money can sometimes be a problem.”

The survey has been carried out by gas network Cadent and Thinks Insight & Strategy and found that rising energy bills is a key challenge facing charities.

Action charities can take to cut costs include reviewing energy use in their empty or underused buildings, suggests the survey, which found that more than half of charities are heating such properties.

However, researchers found that “sustainability is rarely the top priority when considered alongside the other demands on small organisations’ resources”.

“I think it should be a priority for everyone, but it can be hard when you are small [charity], as it tends to be one person dealing with lots of different areas,” said one respondent.

“Therefore, [it] can be difficult to get the right advice - and money can sometimes be a problem.”

Cadent has linked up with Energy Saving Trust to offer further advice on cutting costs. This includes a list of government and local authority initiatives available as well as how businesses can replicate energy saving advice offered to homeowners.

Meanwhile, the Charity Commission has this month warned that financial pressures are among the key challenges facing charities. Its Charity Sector Risk Assessment report highlights concerns around the rising cost of salaries and the impact of inflation on the value of funding.

The regulator says almost than one in four charities are reporting a deficit according to the 2023 financial records, compared to one in five the previous financial year.

It warns of a “growing trend of charities drawing on reserves to bridge the gap between income and expenditure”.

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