The Cost Of Living Crisis & The Impact On Charities

According to research from the Charities Aid Foundation (CAF), almost nine in 10 UK charities (86%) are concerned about the impact that rising living costs are having on those who rely on their services, with a third of respondents worried about their charity’s survival. The National Trust, for example, has identified a shortfall of £200 million this year due to their sites having to close due to lockdown restrictions. Age UK has also reported a £42 million loss of income.

Additionally, the research shows that according to a report, four in five charity leaders (82%) are concerned about the increased cost of utilities, including energy bills, rent, and fuel. Further concerns include managing demands for higher wages (80% of respondents), while nearly two-thirds of charity chief executives (65%) are worried about the higher cost of stock, equipment, and supplies.

The CAF research also found that as well as concern for individual charities’ own expenses such as wage increases, rent, and utilities, 59% of charity leaders are worried about people having less money to donate to their cause. As a result, 35% are worried about their organisation struggling to survive.

A poll they also conducted found that 14% of people plan to cut back on charity donations in the next six months to help manage their bills.

Leaving a charitable gift in your Will

One way to ensure a charity is provided for is to leave a gift in your Will.

This can be done by leaving a set cash amount, property or specific asset, or a share of your residuary estate to a charity named in your Will (including the registered charity number), or by letting your trustees decide who will benefit from your estate.

If you choose to leave a gift to a specific charity in your Will, you can also discuss with the charity how your gift should be used (including these agreed instructions in your Will).

Tax benefits of leaving a charitable gift in your Will

Leaving a charitable gift in your Will could also have significant tax benefits, as any gift left to a charity is exempt from inheritance tax.

If your estate is subject to the payment of inheritance tax, the tax due is 40%. However, if you leave more than 10% of your estate to a charity through your Will, that inheritance tax figure is reduced from 40% to 36%.