The Rising Tide of Charity Closures
In the face of a relentless cost of living crisis, the charity sector is grappling with unprecedented challenges. Recent data reveals a staggering 73% increase in major UK charity closures, with 151 charities shutting their doors in 2024/25 compared to 87 the previous year.
This surge underscores a “triple hit” of rising employment costs, declining donations, and reduced government funding, leaving many vulnerable individuals without essential support.
The Charity Commission’s 2025 risk assessment highlights financial resilience as a critical concern. Over 22% of charities reported operating deficits in 2023, up from 20% in 2022. This trend indicates that charities are increasingly relying on reserves to bridge the gap between income and expenditure, raising concerns about long-term sustainability.
Factors such as increased demand for services, rising employment costs, and the impact of inflation on funding have compounded these financial pressures. Notably, the proportion of individuals receiving food, medical, or financial support from charities has tripled from 3% to 9% over the past five years, reflecting the growing reliance on charitable organisations.
As charities face financial strain, the most vulnerable communities bear the brunt. Organisations like Macmillan Cancer Support have projected significant fundraising losses, potentially leading to a reduction in services for individuals battling cancer. Similarly, Barnardo’s anticipates a £50 million loss this financial year, forcing it to cut services for vulnerable children.
These closures and service reductions not only disrupt essential support but also affect public trust in charitable organisations. While public trust in charities remains relatively high, with almost 60% of people reporting strong trust, the impact of charity closures and financial instability can diminish this confidence.
The current landscape presents significant challenges for the charity sector. To navigate these difficulties, charities must prioritise financial resilience, diversify funding, and enhance operational efficiency.
At KidsAid, we remain dedicated to supporting children and young people facing mental health challenges. Even in these uncertain times, our mission is to provide timely, effective support so every child has the opportunity to thrive.
If you are able, please consider supporting KidsAid through donations. Your contribution can make a real difference, helping to ensure essential services remain accessible to those who need them most. Together, we can bridge the gap and protect the support that vulnerable children and young people rely on.