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Charity services are being squeezed by a combination of rising demand and funding pressure which is driving staff out of the sector, warns a new study* from Rathbones, one of the UK’s leading charity wealth managers.
The survey of senior executives at charities with a collective £5 billion of equity investments found almost all (96%) have introduced restrictions on their services in response to funding pressures.
David Cox, Director of Charities, Rathbones, said: “Charities play a major role in supporting families and individuals across the UK and the cuts to services will have a major impact.
“Charities are being squeezed from both sides by a drop in income and a surge in demand for their services, which means it is vital they maximise their revenue through all means possible, including investments.”
The most common response has been to tighten access to services, with eight in 10 charities restricting eligibility criteria. Others have introduced or lengthened waiting lists (28%) or have been forced to pause or cancel programmes (16%) or reduce the areas they serve (14%).
They are warning of more consequences to come if funding does not improve in the next 12 months. At the extreme end, services are at risk of disappearing from communities all together, with around one in seven (15%) saying they face permanent closure, while a third (34%) will significantly reduce or restructure core services. Around a quarter (25%) will consider merging with other organisations.
Rathbones research shows the situation is being made worse by rising demand – around 62% say demand for their services has increased in the past two year including 9% who say it has increased dramatically.
Separate consumer research from Rathbones** highlights the issue – it found a fifth (22%) of adults have either increased their use of charity services in the past 12 months or started using charity services for the first time. This is double the 11% who said the same in 2025***.
At the same time, more than one in eight (13%) of adults questioned say they can no longer access charity services they previously relied on because the charity has closed or can no longer offer particular services. This underlines the gap emerging between rising demand and charities’ ability to respond.
Employees in the charity sector are feeling the strain from rising demand and financial pressure – nearly nine out of 10 (88%) charity executives questioned say they have seen an increase in people quitting the sector. A similar number (89%) expect an increase in the number of staff quitting the sector in the next two years. More than a third (35%) say their organisation is relying on volunteers to fill in for professional staff.
In fact, nearly two thirds (66%) of the senior charity executives questioned say they are personally considering leaving their jobs due to the pressure they face.
Cox added: “This is not simply a short-term funding challenge. The pressure on charities is now being felt by the people who rely on their services, the staff who deliver them and the leaders trying to keep organisations sustainable. These findings underline why financial resilience matters as a way of helping charities continue to support people and communities, especially when demand is rising.”
Rathbones has been managing money for charities for more than 100 years and supports more than 3,000 organisations nationwide, with portfolios ranging from £10,000 to more than £100 million.
The Rathbones Charity Growth & Income Fund has been designed to meet the long-term investment objectives of many UK charities. It aims to deliver a total return - the combination of income and capital growth - in excess of inflation as measured by the UK Consumer Price Index (CPI)) +4% after fees, over any rolling 10-year period.
