For this year’s Small Charity Week, alongside our programme of guides, interviews, and policy insight, we conducted some research of small charity members for the second year in a row to get a clearer, more current picture of the pressures they're navigating.
Our small charity research: some promising signs
More than half of the charity leaders (60%) who responded to our survey described themselves as "somewhat comfortable," with 13% "very comfortable”. This is certainly positive, and suggests many smaller organisations are managing, despite the difficult economic environment.
That comfort, for many though, is still relative and precarious. As one respondent put it: "We are always running to stand still financially." Another small charity leader described their situation more starkly: "We are operating month to month constantly raising funds to keep running. We have no backing, only donations from fundraising and the adoption fees from rehoming dogs."
Reserves came up repeatedly, with several charities describing healthy reserves that have grown over the years, but with a clear sense that this cushion is being drawn down rather than replenished.
One organisation captured the tension funders can create: "[Trusts] look at the annual accounts and reserves in different ways and have levels of reserves at which they won't consider supporting a charity, whether that is too high or too low”.
Compared to last year, most respondents (57%) said their financial position was "about the same," with more reporting improvement (37%) than decline (7%), an encouraging signal, even if cautious optimism rather than confidence is the dominant tone.
Looking ahead, more than half of the charities we heard from expressed some level of concern about financial sustainability over the next 12 months, and more charity leaders said that their concern had increased compared to last year than decreased.
The unpredictability of funding came through time and again: "We can only predict income for three months. Change of a single donor can have a huge change."
Funding and the wider economic climate top the list of pressures
When asked which factors were negatively affecting their charity, two-thirds of respondents pointed to the funding and grants environment, with half citing the wider economic climate.
Volunteer recruitment and retention (40%), regulatory and compliance burden (32%), and governance or trustee issues (30%) followed behind.
Recruitment of staff specifically drew a wide range of experiences. Some charities described real strain: "We are unable to match some of the salaries offered by larger NGOs."
Others reported a different problem; an overwhelming volume of applicants for volunteer roles, "particularly those for young people."
A recurring thread was the fragility built into very small staff teams: "We have one paid staff [member who] is part-time who runs all of our admin. If she left we would struggle to replace her."
SORP awareness is strong, but Gift Aid remains a friction point
On the upcoming changes to the Charities SORP, awareness was encouragingly high among respondents with incomes over £25,000: half were "very aware" and a further 37% "somewhat aware," with only 12.5% reporting no awareness at all.
Confidence in meeting the new requirements followed a similar pattern, with the majority feeling very or somewhat confident.
Gift Aid tells a mixed story. Just over one third of respondents said they found claiming gift aid found it easy, whilst half found it "neither easy nor difficult." However, the claims process clearly still creates friction for some:
"It's a very time consuming process and we only have one person that knows how to complete it."
Others pointed to practical mismatches, such as inconsistencies between addresses held by HMRC and Royal Mail, causing avoidable complications.
Collaboration: appetite exists, but capacity often doesn't
Half of respondents said they weren't currently considering closer collaboration with other charities, while 29% said they'd like to but hadn't yet taken steps. Only a small minority had actively increased collaborative working recently.
The barriers were less about willingness and more about capacity and visibility: one respondent pointed to a "lack of broader vision across the local sector," while another reflected that shared PR and events activity had increased referrals to their services, but it hadn't translated into funding or reduced workload.
Where charities are finding support
Encouragingly, 47% of respondents said they were receiving support from an accountant or financial adviser with charity expertise, and a further 37% pointed to national umbrella bodies, local VCSE or CVS organisations, or community foundations.
Just over a quarter, however, said they had none of this support in place - a gap worth reflecting on as we think about how CFG and others in the infrastructure space can reach small charities and extend support.
What else did we do?
This survey sat alongside several other pieces of work this Small Charity Week. We spoke to Sarah Bamber, CFO of GanzAfrica CIO, about navigating growth as a small, internationally-focused charity, with reflections on risk management, partnership, and what newer organisations can learn from approaching governance with a blank page.
On the banking front, Lloyds Bank's Sarah Tickner wrote about understanding ongoing Know Your Customer requirements, a topic that continues to be a source of real friction for small charities.
That theme was reinforced by CFG's Policy Officer, Isaac Bristol, who shared early findings from CFG's 2026 Charity Banking Survey, revealing that over half of small charity respondents have faced difficulties simply managing account signatories, a small but telling example of how disproportionately administrative burdens can fall on the smallest organisations.
We've also been continuing our work refreshing and expanding the Small Charity Guides, our free, jargon-free resources covering everything from banking and pensions to reserves and risk. New guides are currently in development and will be published in the coming weeks, building on the existing series to cover even more of the topics small charities tell us matter most.
Looking ahead
What comes through most clearly across all of this work, the survey responses, the interviews, and the policy research, is that small charities are carrying significant financial and operational pressure.
Along with the support of our trusted partners and member communities, CFG will be working to update, produce and share more helpful resources and insights in the coming months.
If you have any thoughts on the research shared here, or any of the issues raised, please get in touch.
Finally, if there are any charity finance resources or tools you'd find useful, please share those too! We always looking for new ways to support your charity finance team, whatever its size and wherever it is in the UK.
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