Cost-of-living crisis: how to meet service demand

There is a perfect storm facing the charity sector. Rising running costs combined with falling donations, wage pressures, and stretched resources after two years in a global pandemic, means that many charities are worried about how they will meet rising service demand.

 

The impact of the cost-of-living crisis is sector wide. But charities that provide vital services – such as food banks, support for carers, mental health services, financial aid, and families facing homelessness – are being hit harder than ever.

 

UK Fundraising reports, for example, that 9 out of 10 food bank charities fear they can’t meet rise in demand. Charity Times reports that some charities are now referring their own staff to food banks as well as beneficiaries. And the Joseph Rowntree Foundation estimates that 100,000 people will be pulled deeper into poverty amid rising inflation.

 

Times, for everyone, are tough. But charities tend to be resilient. In this article, we offer advice on how charities can meet rising service demand during the cost-of-living crisis.

 

 

Review your outgoings

 

Charities with service centres such as shelters, hospices, and foodbanks are facing the immediate challenge of paying their bills to keep services up and running. Consider conducting an energy audit, switching suppliers, or switching to energy efficient equipment where possible. Turning the thermostat down by just 1°C can save 8% in heating costs.

 

The Charity Excellence Framework provides a checklist of 30+ energy saving ideas for charities and non-profits, to cut the cost of heating, electricity, and gas.

 

Savings can also be made by removing overheads where possible, cutting down on other bills (such as software costs), and taking advantage of tech discounts on Charity Digital Exchange.

 

 

Diversify your income

 

Relying on a single income stream, especially an unstable or unreliable one, puts charities at significant financial risk. Embracing income diversity allows organisations to spread risk, protect against potential pitfalls, and promote long-term financial stability. Pilotlight suggest that no one income source should account for more than 25% of an organisation’s income.

 

Ways to diversify your income include partnering with a business, CSR, legacy giving, and selling merchandise. Charities should be proactive and perform regular assessments of income streams to ensure future financial stability.  

 

 

Join forces and share resources

 

Disability charity, Sense, has partnered with a grant-maker for the first time in its 60-year history, in an effort to help service users cope with rising inflation.

 

While corporate and grant partnerships are one option for major charities and non-profits, there are options and resources for smaller charities and community groups, too. 

 

Charity Excellence Framework’s #SurviveAndThrive programme is a one-stop-shop designed to help charities and non-profits survive the cost-of-living crisis. The programme gives organisations access to free fundraising support, pro bono advice, and resources.

 

Their free Funding Finder gives charities access to a global network of online grant lists and funding directories, including crisis funding (updated weekly).

 

Alternatively, some charities are joining forces to lobby the government. In September, voluntary sector partners published a joint statement on the cost-of-living crisis, asking the government to “urgently deliver meaningful financial support to those in greatest need”. In October, foodbanks Trussell Trust, Food Aid Network, and Feeding Britain joined forces to deliver a letter to Downing Street signed by more than 3,000 staff and volunteers.

 

 

Support your staff

 

The nature of the cost-of-living crisis means that charity staff can be as vulnerable as a charity’s beneficiaries. Offering flexible working, financial education, and wellbeing services are just some of the ways to support staff during this period.

 

Honest and open communication about finances can help workers and volunteers to develop financial skills, share resources, and relieve anxious thoughts or emotional distress caused by financial pressure. Money Helper and Citizens Advice are great resources.

 

Salary sacrifice schemes can reduce financial strain. By reducing pay for another benefit, such as car parking, gift-cards, or childcare vouchers, employees will pay less tax to the government. Salary sacrifice only works if the benefits offered are truly of value to employees.

 

Read more on how to support staff through the cost-of-living crisis. 

 

 

Offer better incentives for volunteers

 

Charity Today reports that ‘fantastic volunteers’ are being deterred by high fuel prices and the cost-of-living crisis. But better incentives can not only attract new volunteers but improve volunteer retention. Incentives could include paid expenditure, timely reimbursements, quality training, or gift-cards.

 

Volunteer management systems can not only improve processes and operations but can help charities harnesses the best skills of their volunteers.

 

 

Digital solutions  

 

Due to the cost-of-living crisis, much of the rise in service demand is down to first-time service users. Chatbots can enable charities to streamline and simplify the first response process by providing instant answers to common queries. They can also be designed to provide advice, collect data, carry out fundraising activities, help people to make donations, and provide alerts or new information as necessary.

 

Switching community support groups and seminars to Zoom can save time and money for both for the charity and the service user by cutting out the cost of travel. Virtual sessions are also geographically beneficial, meaning charities can reach more service users in less time.

 

Digital is beneficial. But for groups at risk of digital exclusion, there are resources available. The RNIB is combatting digital exclusion by adding additional funded items to its grants offer, providing information and advice about accessing and using digital technologies via its Technology for Life team and Sight Loss Advice Service. The National Databank from Good Things Foundation offers free mobile connectivity data to those who need it across the UK.

 

Read more on how to reach your service users during the cost-of-living crisis.

 

 

Keep fundraising

 

The cost-of-giving crisis is a direct result of the cost-of-living crisis. With rising inflation and the pressure on everyone’s incomes, up to 55% of the public have reported that their current financial situation makes it harder to donate.

 

Many charities are directly referencing the cost-of-living crisis in their campaigns, to positive results. Another option is for charities to pivot their campaigns to target new philanthropic audiences, from major donors to Generation Z.

 

According to UK Fundraising, 82% of donations in the first part of this year came from Generation Z, with social media platforms such as TikTok and Snapchat playing a vital role.

 

In August of this year, the Chartered Institute of Fundraising reported (based on research conducted by The Beacon Collaborative) that major donors dramatically increased their rates of donations between March and June 2022 (from a mean of £5,026 in June of 2021 to £19,410 in June 2022).

 

Most importantly, don’t forget to remind donors about Gift Aid. Gift aid can increase the value of donations by 25% at no extra cost to the donor.