Welcome to 2026! There’s much to look forward to, but there’s no denying the pressures we all face. To kick off the year, CFG’s co-CEO's Clare Mills and Sarah Lomax share some thoughts on the charity sector landscape, and how CFG will be supporting charities in the year ahead.
Where to begin?
The global landscape remains unsettled (maybe an understatement?), with geopolitical tensions and economic uncertainty creating ripple effects that touch all our work. Many of you have told us about rising costs, tighter budgets and the ongoing puzzle of how to stretch resources further while meeting increasingly complex compliance requirements.
These pressures are real, and we're not going to pretend otherwise. We can't control the geopolitical situation or the wider economic environment. But here's what we also know: the charity sector has faced tough times before and has come through them even stronger.
And what we can control – how we respond, the choices we make, the tools we adopt and how we support each other – that's where our energy is best spent. Right now, there are some exciting developments within reach that could help.
AI: opportunity and responsibility
Against this challenging backdrop, artificial intelligence represents perhaps the most significant opportunity for the sector. Used effectively and ethically, AI can help charities reduce administrative burdens, improve financial forecasting and increase productivity – freeing up resources to focus on mission delivery. More importantly, using AI effectively means charities have the potential to improve outcomes for the people and communities they serve.
However, realising these opportunities requires investment in skills and infrastructure. Charities will need to strengthen data collection practices, ensure robust governance frameworks are in place, and implement appropriate safeguards. We must also be mindful of the digital divide and ensure technological advancement doesn't leave some organisations or beneficiaries behind.
CFG is actively engaging with the Charity AI Task Force to ensure that the government’s AI policies meaningfully take account of the interests, expertise, and perspectives of the charity sector and the communities it serves.
Many organisations, including environmental charities, will continue to be concerned about AI's environmental impact. Training and operating large AI models can be energy-intensive, and the data centres that support them may also require substantial water for cooling (depending on location and design). The overall climate impact varies widely with the electricity mix and hardware lifecycle. On the other hand, charities can use it to develop tools and solutions that bring real benefits. This is work the sector will need to tackle together in 2026.
Supporting charities through SORP implementation
Adding to some of the operational demands in 2026 is the implementation of the new Charities SORP, published in October 2025 and now in effect as of January 2026. Those charities in Tier 2 –with annual income from £500,000 up to £15 million – face particularly significant adjustments, with additional disclosure requirements that will add to workload and costs.
Throughout 2026, we'll be supporting charities with high-quality training and resources. This February and March, we're running a series of interactive SORP clinic sessions, led by our expert corporate partners, designed to provide focused, practical insights into the key changes. Each session brings together small groups of up to 35 participants, creating an environment for open discussion and peer learning – exactly the kind of support charities have told us they need as they navigate these requirements.
Leadership, diversity and people
Though it may have become something of a cliche, it’s still true that people are our greatest asset and how charities navigate the challenges ahead will depend not just on financial resources, but on leadership, governance and organisational culture. In 2026, we must strengthen our commitment to equity, diversity and inclusion, standing in solidarity with those who are marginalised – not only because this is fundamental to effective leadership and better outcomes, but also because it's the right thing to do.
Leadership is a creative practice; diverse thinking and experience enriches our creativity. Despite the challenges, there is a wealth of evidence showing how this sector, and society as a whole, benefits from embracing and celebrating diversity in all its forms.
It also means investing in your staff and volunteers through development opportunities, creating supportive cultures, and ensuring fair reward structures. Wellbeing can't be an afterthought, especially when change is constant. The commitment, resilience and humanity that people bring to this sector deserves recognition and genuine support.
Can the Civil Society Covenant deliver?
One of our greatest hopes for 2026 is that the government's Civil Society Covenant moves from aspiration to reality in day-to-day decision-making. Our country needs charities to be treated as equal partners in designing and implementing policy – the expertise, creativity and insight charities hold must be recognised and used for the greater public benefit. This partnership must protect the sector's independence and voice while enabling genuine collaboration to address the challenges facing communities across the UK.
The Covenant has the potential to transform how government and charities work together, creating the stable, long-term funding relationships the sector needs to plan effectively and deliver sustainable impact. The warm words we've heard must translate into action that recognises the true value charities bring and ensures they can operate on a financially sustainable basis.
How CFG is helping charities in 2026
At CFG, we're committed to supporting charities through these challenges. Beyond our SORP clinic sessions, we're looking forward to bringing the sector together at our sell-out annual conference in June 2026, where we'll explore the key issues facing charity finance professionals, hear from sector experts, and share solutions and good practice.
We’re also undertaking our own digital transformation work, which we hope will improve how members manage and engage with their membership, support stronger connections across our community, and help us do more for the wider sector. We know from experience that digital transformation isn’t easy – it takes time, resources and careful planning – but we believe this investment will put us in a stronger position to increase engagement, raise awareness of our work, and provide relevant support and resources to charities when they need them most.
Resilience and collective action
So yes, 2026 will test us. Some organisations are running low on ways to adapt within current constraints, which makes it more important than ever to reach out for support early, engage with your communities like CFG, and share what you're learning with each other.
It's crucial that we don't lose sight of what makes this sector extraordinary: the dedication, innovation and impact of charities working tirelessly to improve lives and strengthen communities across the UK and beyond.
We believe that by focusing our energy on what we can influence – collective action, smart use of emerging technologies, strong leadership, and genuine partnership with government – we can navigate what's ahead and continue the vital work that changes lives and strengthens communities. CFG will be here every step of the way, supporting our members and the wider sector through whatever 2026 brings.