How the Cost of Living Crisis is Reshaping Charity Income

Rising costs and ongoing economic uncertainty have created a challenging fundraising climate. We’ve seen traditional funding streams disrupted, public giving patterns shift, and grant-makers and trusts become ever more competitive. So, as the Chancellor prepares to deliver the Autumn Budget, you may find yourself focusing on how your charity can stay resilient in the face of even more pressure.

Fortunately, it doesn’t have to be all doom and gloom. Many charities are finding new ways to adapt, from rethinking their mix of income sources to strengthening community connections, and proving that innovation often flourishes under pressure.

The Shifting Landscape

Over the past two years, the cost-of-living crisis has had a considerable impact on charity income. While the public donated an estimated £15.4 billion to UK causes in 2024 (CAF), the number of people giving has fallen to its lowest level since records began. More than a third of donors (37 %) say they’ve cut back their charitable giving as household budgets tighten, and smaller charities in particular are feeling the strain. Meanwhile, grants have become increasingly scarce, and charities are struggling with the growing demand for their services and shrinking resources. 

This is where flexibility has become so important. Charities that once relied on a single dominant income stream, whether that’s grants, community fundraising, or corporate partnerships, are discovering the need to diversify. After all, the crisis hasn’t stopped people caring; it’s simply changed how they give.

What This Means for Fundraising

When it comes to fundraising in a challenging economic climate, the most resilient charities are those that can combine various income streams and act strategically rather than reactively. For example, combining grant funding with corporate partnerships that have aligned purpose and values. Or balancing individual giving with community fundraising to create a steadier flow of support throughout the year. Add to this the development of a legacy programme, which raises awareness and can result in transformational gifts, and you can create a far more resilient long-term income mix. And of course, digital campaigns continue to see success, with one-off appeals giving way to ongoing, relationship-led fundraising that keeps supporters engaged over time.

While change can be daunting, this isn’t about abandoning what’s worked before. Instead, it’s about combining different approaches so that all your fundraising eggs aren’t in one basket. This more balanced model actually creates more touchpoints for engagement and more opportunities to deepen relationships.

The Importance of Supporter Relationships

Regardless of the economic climate, the strongest charities are often those that invest in deeper supporter engagement, build partnerships that extend beyond funding, and involve communities more directly in their work.

More organisations are rediscovering the value of what can’t be measured purely in pounds: volunteers, pro-bono expertise, and shared networks. According to the Government’s latest Community Life Survey, 16% of adults, around 7.5 million people, volunteer formally every month, contributing an estimated £8.26 billion in wellbeing value across England. That contribution doesn’t just sustain charities; it builds trust, belonging, and community connection at a time when people need it most. And it’s not just about hours, your supporter community can often provide expertise, skills, and materials, giving you a valuable resource, while deepening their sense of ownership and connection to your cause.

Building Resilience for the Future

The cost-of-living crisis has tested the sector’s resilience, but it’s also reminded us what makes charities extraordinary: their ability to adapt, connect, and keep moving forward with purpose. It’s time to think holistically about income and recognise that sustainability isn’t only about securing the next grant, but about nurturing every relationship that helps your mission thrive. Whether that’s a loyal monthly donor, a corporate partner, or a volunteer giving their time and skills, each contribution is extremely valuable.

At Orchard Fundraising, we’ve seen how powerful this approach can be. By aligning strategy, storytelling, and practical delivery, charities can maximise their limited time and resources, building a diverse and confident income base that can weather any storm.