Last October, Rachel Reeves announced a rise in Employer National Insurance Contributions (ERNICs). The rise increased the operating costs for many organisations at a time when many were already struggling, and CFG highlighted the concerns of our members through a survey we launched at the time, and in subsequent reports and articles.
We followed up this coverage by launching a second survey in March which, as well as again asking members about their levels of concern, asked charities whether they had taken any actions to cope with the impact of the rise. Nearly 7 in 10 respondents said that their charity had already started to reduce headcount, or would in the near term, as a result of the rise, whilst 41% said that they had already cancelled plans to take on new staff or launch new services that would otherwise have gone ahead, with a further 23% saying that they are likely to do so in the near future.
As the Charity Commission of England and Wales stated recently: “Charities are experiencing multiple challenges, including increased demand for services, the rising cost of employing staff and the impact of inflation on the value of funding. This echoes research, published earlier this year, showing that the proportion of people receiving food, medical or financial support from charities has tripled from 3% to 9% over the past 5 years.”
The Commission’s Risk study found that 22.5% of charities reported an operating deficit in the 2023 Annual Return, up from 20% in 2022, and this is only likely to higher in future years – either that or charities will have to continue taking steps to reduce headcount and cut vital services.
We’re now launching a further survey to capture views from our members about the state of their finances, and how this has been impacted by the rise in ERNICs, as well as the additional pressures of general inflation and a National Living Wage increase.
Why your voice matters
The data we collect will directly inform CFG's advocacy efforts. When we surveyed members last year, politicians cited our findings in parliamentary debates, and we secured national media coverage that put charity finance challenges front and centre of the public conversation. Your responses give us the evidence we need to advocate effectively on behalf of the sector.
But beyond advocacy, this survey also helps us understand what support our members need most right now. Whether that's guidance on financial management, help with income generation, or amplifying calls for policy changes, we want to ensure CFG is providing the most valuable resources during this challenging period.
What we're asking
The survey takes approximately 10 minutes and covers four key areas: your charity's current financial position compared to a year ago, the specific actions you've had to take since the ERNICs rise came into effect in April, your confidence in the next 6-12 months, and what support would be most helpful right now.
We're also interested in hearing from charities of all sizes. Whether you're a small organisation with under £100,000 income or a super-major charity with over £10 million, your experience matters. The impact of rising costs affects organisations differently depending on their size, funding mix, and whether they can claim Employment Allowance, and we want to capture that nuance.
Taking action together
The charity sector employs nearly 1.3 million people and provides essential services that would leave massive gaps if they disappeared. From food banks to hospices, youth services to environmental conservation, charities are holding communities together during economically turbulent times.
But we can only continue this work if policymakers understand the genuine pressures we're facing. The ERNICs rise wasn't implemented in isolation – it came on top of inflation, increased demand for services, and a funding environment that hasn't kept pace with costs.
By completing, this survey you’re not only sharing your own charity’s story, but also contributing to a body of evidence that demonstrates the real-world consequences of policy decisions on the sector.
Please complete the survey