3 biggest challenges for Charities

Every household and business is facing the oncoming inflationary peak, expected to hit the UK in April 2022. According to the Bank of England, inflation, which was already at 5.4% in December 2021, will reach around 6% by April. With no sign of returning to normal levels in the near future, it is fair to say that every business faces times of great uncertainty as a direct result of rising costs. For charities, especially, the situation is dire as rising costs can significantly affect the nature of the business and its ability to fulfil its functions. How can charities cope with the challenges of a post-pandemic and post-Brexit environment?

At Click4Assistance, we are committed to providing cost-effective and fully secure communication solutions for all businesses. With over 15 years of experience working with charities, we understand the challenges they face day-to-day and how to tackle these effectively.

Rising inflation

As all costs are set to rise, salaries are likely to be one of the most dramatic cost increases for the charity sector. Indeed, according to the latest NCVO almanac, staffing expenses could reach up to 37% of the total expenditure for charity organisations (approximately around £20.4 bn).

Unfortunately, it is unlikely that many charities will be able to raise pay by this much. Combined with the new National Insurance rates, expected to increase from April 2022, and the Health and Social Care Levy in April 2023, charities face a unique wage challenge. The sector has already troubles with lay pay that are less than the real Living Wage for 17% of all full-time workers and 29% of all part-time workers in charity.

The risk of high staff turnover in the third sector is rising just as rapidly as the inflation rate. If qualified employees choose to quit and find a better-paid job to overcome the challenges of increased living costs, charities will struggle to attract and replace staff. That's where, at Click4Assistance, we believe that saving time in everyday processes can help charities function even with a reduced team. Using automated chat on your website could help address incoming queries rapidly and even resolve simple questions via a chatbot. For more complex issues, the chat can inform staff members and collect the relevant information for rapid resolution.

Reduced Fundings

The scenario in which charity income can't keep up with the pace of inflation is painted as a grim possible future by economists. Indeed, the cost of living does not only affect wages, and it will also affect donations for charities.

Pro Bono Economics analysis showcases the association between charity income and consumption, which means that as consumption falls over the incoming period, charitable donations are likely to follow. As donors may have less cash for donations, the amount may drop dramatically.

Additionally, the median donation per month — estimated at £20 by a previous CAF survey — could lose value even though the set amount doesn't change. For instance, a £20 donation made in 2020 would have lost 14% of its value by 2026 due to inflation. Therefore, charities need to address the issue rapidly and make donors aware of the challenges they face. It goes without saying that grants that have already been awarded are also affected by a loss of value, putting additional financial pressure on charity organisations.

Keeping conversation channels open to educate and encourage donors to match the value of their pre-inflation donations could help minimise losses. We recommend using the digital platform to inform donors via a chat function that can direct them to the relevant sections of your website or start a conversation with a member of your team.

Communication challenges with fundraisers

Fundraiser events are more important than ever to raise awareness about inflation challenges. However, fundraisers can find it tricky to stay organised and track progress, resulting in a waste of money and duplicate activities.

At Click4Assistance, our service for a chat on your website can integrate with a variety of platforms, including social media and video chat, ensuring charities and fundraisers can stay in the loop no matter what happens. With secured visitor activities within the chat, it's easy for door-to-door and other street event fundraisers to let donors set up their charity accounts through a tablet.

In conclusion, we hope this brief overview of the biggest challenges the charity sector faces in 2022 helps you prepare your business. If you wish to learn more about our GDPR and ISO 27001 compliant chat solutions for charity websites, please don't hesitate to contact our team.