Skip to main content
Due to maintenance, some parts of the ACEVO website won’t be available on Wednesday 27 March, from 7–9am.
For urgent requests please email

What do charities need to navigate the cost of living crisis?

By Annie Caffyn, senior researcher at IVAR.

In November 2022, 32 charity leaders across the UK came together around the cost of living crisis in sessions facilitated by IVAR (the Institute for Voluntary Action Research). We wanted to understand their concerns and how funders could help them to respond to yet another extended period of upheaval.

Below is a summary of our findings, which are shared in full at:

What is keeping charity leaders awake at night?

Charity leaders are facing the challenges of the Cost of Living crisis with valuable learning from the last three years. But few have come through this period unscathed, and all continue to operate in a highly challenging environment. Three key concerns stand out:

  • Unprecedented volatility and stress continue: ‘I have been leading charities and social organisations for the last 20 years, and I’ve never known an environment that’s this difficult to predict’.
  • Widespread exhaustion: Many leaders were rightly proud of the agility, creativity and energy of their organisation’s response to the Covid emergency. But the continuing and changing crisis means that ‘building back better’ feels like a pipe dream. Many spoke about ‘moving from one crisis to the next’ and it is clear that stress levels continue to rise at all levels.

Funders are tired, we are tired. We dealt with Covid and now we have the Cost of Living crisis looming. All of us are only just about managing to keep up.

  • Recruiting and retaining staff: This sense of exhaustion means that many dedicated people are considering their futures. CEOs and frontline staff are leaving their organisations or moving away from senior roles. Leaders are concerned about the experience and skills leaving the sector, as well as the demands on their teams as they cover additional roles.

What can charities do?

  • Collaborate with other organisations: During periods of heightened uncertainty, collaboration is an important tool for survival. In the face of the Cost of Living crisis, many are seeking out opportunities to collaborate as a way of reducing strain on their teams while responding to pressing need.
  • Be clear and confident in negotiations with funders: No matter how difficult it can feel, do initiate contact with funders if, for example, grant timings and conditions have become unhelpful. It’s also important to focus on responding to the real need in your communities and how best to meet it – rather than becoming ‘funder-led’ in setting priorities. Key to achieving this shift is dialogue and exposing funders to the funded work.

What can funders do?

This complex and challenging context pressures funders and charities to get the best out of funding relationships. Charity leaders know that funders are having a tough time too, and have difficult decisions about how best to use their resources in the face of ever-increasing demand. However, there is always more that can be done. Looking ahead in the context of the Cost of Living crisis, charity leaders shared reflections on how funders can help them to do the best possible job.

  • Give charities greater stability and control over their own resources: Leaders are weary of short-term, tightly restricted funding when the problems everyone faces will call for action over the long term: ‘Why do they think the crisis will be over by then?’. Charities need funding that offers them the freedom to respond in an agile way to the changing needs of their communities. This can be achieved through giving unrestricted, multi-year funding, and enabling grantees to adapt project plans and budgets as needed.
  • Give charities a more powerful voice in the decisions funders make about their priorities and practice: Initiate conversations with the organisations you support – so that charities can be open about the challenges they are facing, and the changes that would help them, without worrying that this may impact on their funding.

It isn’t helpful when funders continue to focus on the “new” and “innovative” instead of focusing on real and emerging needs. Funders need to listen carefully to where the need is and decide the most effective way to respond. Hungry people don’t want to deal with innovative things: they want a sandwich.

  • Get the basics right: The continuing crisis brings home how vital it is that funders remain alert to the many ways they can help to reduce pressure. Earlier this year, we heard from 1,200 charities about the 10 funder actions which could make a real difference to their experience. Individual funders are making encouraging changes, demonstrating how adjustments in practice can make a huge difference.

Recently, one of our funders agreed to accept reports we had produced for someone else – it really showed how much time we would save if this happened more often.

Narrated by a member of the ACEVO staff

Share this

Not an ACEVO member?

If you have any queries please email
or call 020 7014 4600.

This website uses cookies to improve your experience. Privacy & cookie policy

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.