Inflation: a brief charity survival guide

The warnings are stark: inflation is rocketing in 2022, driven by huge hikes in food prices and energy bills.

The knock-on effect on the charity sector will be massive – but there are steps you can take to limit it. Read on for our top six recommendations.

Inflation: the not so good, the bad and the ugly...

You’ve got to hand it to food campaigner Jack Monroe, aka @Bootstrap Cook. In one Twitter thread, this former foodbank user highlighted the way that inflation has a disproportionate impact on the poorest people in society. 

Although the current inflation rate is officially 5.4%, Jack highlighted how, for example, the cheapest pasta in her local supermarket had risen from 29p to 70p – an increase of 141%. 

The thread went viral, prompting the Office for National Statistics to explain how it planned to improve its Consumer Prices Index. Jack herself is now working on a ‘Vimes Boots’ index to track the cost of basic foods. 

And it’s not just food prices that are rocketing. From April, the energy bill cap will be raised, leading to massive increases in costs for many people. That same month will see a rise in national insurance contributions. And the freeze on the repayment threshold for student loans will see many graduates paying more over the coming year. 

Inflation for charities

Of course, charities in the UK have long been aware of these issues. Even small rises in the cost of living lead to poverty for some and increased demand for financial and mental health support, while creating a pinch for donors. 

Research from the Charities Aid Foundation (CAF) found that 91% of the sector’s chief executives believe that charities will be expected to fill gaps in providing public services, with 86% anticipating that demand will increase. Some 58% say that financial sustainability is the main challenge their organisation faces, with 64% expressing pessimism about government support for the sector. 

Charities’ own overheads rise too. Staff may request salary rises to help them meet their own living costs, and charities which cannot oblige risk a retention and recruitment crisis. That in turn can have a negative effect on local economies.

All in all, it can be crunch time for many charities, particularly smaller organisations, just when communities need them most. To help yours survive, we’ve put together a few pointers for action

1. Apply for grants

Grant-giving institutions are generally better protected than the general public from the vagaries of inflation.

So if you haven’t already done so, now is the time to draw up a strategy to target these benevolent funds. Do your research to find out which institutions work in your field or local area, and what projects they’ll support. 

2. Invest in digital

Although your instinct might be to batten down the hatches, it makes financial sense to invest in great IT to survive. 

Good case management software helps you streamline your processes and make better use of your resources. It reduces the number of people applying for grants for which they’re ineligible, and speeds up the process for eligible applicants. Plus, it means less paperwork going missing!

Case management software also helps you record your work and outcomes, enabling your charity to glean the insights that you’ll need to apply for substantial grants. 

Another worthwhile IT investment is a digital assistant on your website. It acts as a triaging tool, so people in need or crisis are given immediate support, and those who just want to self-serve are signposted accurately. This cuts the overhead of staffing a live chat service, so pays for itself pretty quickly. 

These days, digital assistants can be programmed in a sophisticated way, so the user never feels they’re talking to a chatbot. Plus, where an empathetic or nuanced approach is needed, a digital assistant will escalate the user quickly to a human advisor. 

3. Demonstrate your value to your community

It’s amazing how generous ordinary donors can be, even in tough times. But they need to know you’re doing a great job. 

It’s more important than ever to show you’re central to your community. This is where smaller charities often have the advantage over larger organisations.

Be visible: get out there making a difference, and collecting the case studies, photos and figures to prove it. Also, don’t forget to shout about your impact report from the previous year!

4. Develop a clear message

What would you really like people to know about your charity? Shout it loud and clear!

Back up your message with all those case studies and impact figures you’re collecting. It’s all about showing people that their donations will help you do what you’re promising: public trust in charities is crucial. 

5. Make your reserves work for you

If you’ve got substantial cash reserves (and many charities, of course, had to drain these to survive the pandemic), Barclays advises talking to your investment manager about making these work harder for you. That could reassure your trustees so you can make the investments you need to ride out the storm.

6. Get expert support

At Connect Assist, we know how hard times are right now for charities and their clients, and we want to bolster your charity by partnering with you. Drop us a line or give us a call for a chat about our outsourced contact centre services, our digital services, or our consultancy. We’d love to work together.