As a charity or nonprofit, you don’t want all your donations going towards keeping your lights on but rather the lights of those who need them the most. Charities are at risk of facing numerous challenges in today’s economy. This article will delve into how nonprofits can adapt and overcome these hurdles.

The CAF (Charity Aid Foundation) conducted a survey among 653 UK charities in December 2023. They found six out of ten charities had fewer resources than the previous year but had to find a way to do much more with them. 

Luckily, most non-profits are eligible for certain VAT exemptions. Every penny counts, so they need to make the most of any opportunity to save money. Utility Bidder offers guidance to charities to help save money on utility bills.

Current Challenges Facing Charities 

It’s a dangerous cycle; with resources becoming scarce, more households are in need. But so are the charities themselves. To continue serving the community, they must overcome multiple challenges. Let’s delve into some of the biggest problems they currently have to face:

● Financial Uncertainty

With the current cost-of-living crisis, charities have been under more financial strain than most. They are dependent on donations, but it’s no surprise that companies and households haven’t been able to support non-profits as much as they need them to. Businesses have tighter budgets; unfortunately, this means they have to reduce the size of donations or cut them entirely from the budget. 

● Staff shortage

The lack of funding isn’t the only issue charities are facing. They no longer have as many volunteers and staff as they used to. Charities rely on volunteers but also have a team of staff members to get the work done. According to the VSCE Sector Barometer, about 36% of charities struggle to recruit staff. 

Unfortunately, they have to either reduce the number of employees or cut their salaries when they run out of funds. As the workload increases, they just can’t keep up with providing the service. 

● Lack of support from volunteers

Over half the charities in the UK are worried about surviving due to the rising cost of living. Fewer people can donate, and the donations they receive are a reduced amount of what they used to be. This is because of the pressure inflation is putting on individuals. To give you an idea of how inflation is further affecting charities, according to a study done by Pro Bono Economics, a monthly charity donation of £20, which started in 2017, will be worth just £14.90 by 2024. This highlights its significant impact on the value of charitable contributions.

Support and Sponsors

Collaborations between businesses and charities are crucial to survival in today’s economy. The Dorset Charity Conference has played a massive role in helping build these connections, benefiting both parties and their community.

Utility Bidder Support

Fortunately, Utility Bidder supports charities and contributes by exploring the best rates, helping charity owners understand utility bills, and checking possible VAT exemptions and benefits for your business. Their experts boast that they can save you up to 45% on utility bills. 

Government Support

The best part is that charities also get VAT relief (well, on some expenses). They’re only expected to pay 5% or no VAT on energy for residential accommodation, charitable activities, and other small-scale energy uses. It’s important to remember that there is a catch, so it’s advisable to contact professionals (like Utility Bidder) to advise you accordingly.

Case Study

Sharda Care is a care home that benefited from Utility Bidder’s services. By helping Sharda Care figure out that they are eligible for a reduced VAT rate on energy, they saved so much on energy bills alone. Before this, they were completely unaware and had been overpaying on VAT. 

This isn’t even the best part; once they’ve identified this mistake, they receive a VAT rebate of £20,000 and secure a new gas contract, saving an additional £17,000 annually.

Without the help and expertise of the agents at Utility Bidder, Sharda Care would have continued to lose money that could’ve gone towards caring for the elderly at home. This case underscores the importance of understanding and applying for eligible tax relief. 

Strategies for Adapting and Thriving 

There are many steps charities can take to improve their efficiency. 

● Leveraging technology: 

We’ve all noticed that almost everything is done digitally after the pandemic. Charities will need to hop aboard (or online) for fundraising. There is definitely more money to be made and a larger audience to reach by investing in technology and having an online presence. A report from 2022 stated that they discovered that 80% of charities that invested in IT made more than £5 million. 

● Going Green

Becoming more sustainable will comply with the mission of most charities, which is to make the world a better place by positively impacting the environment. Installing renewable energy sources can be expensive at first; however, it’ll pay for itself over time with the money you save on electricity bills. 

As many companies are moving towards being more sustainable to combat climate change, you can partner with businesses that share your values and are willing to donate towards your cause to achieve this. 

Utility Bidder highly recommends this approach; they’ve been helping many companies from various sectors save time and money. They’re also proud partners of the Teenage Cancer Trust. To learn more about this, you can explore Utility Bidder’s contributions to the charity sector on their website.

● Using Utilities Efficiently

Don’t worry; we know that not all charities have the capital to install solar panels or wind turbines. Making minor changes in the use of utilities can also significantly impact bills at the end of the month. 

Here are a few tips on how charities can reduce their energy bills:

1. Replace old light bulbs with energy-efficient LED ones. The initial cost will be around £15–20, but you’ll save almost £13 per bulb replaced at the end of the month. 

2. Sound insulation is crucial to saving money, mainly when heating gets used in the winter. You can improve insulation by sealing any gaps in doors and windows. Even something as simple as getting thicker curtains can reduce heat loss.

3. Conducting energy audits is a necessity. You can’t save money if you don’t know where energy gets wasted. 

Image by Julia M Cameron on Pexel

As we’ve seen, charities’ challenges are daunting, but these challenges can be overcome with the right approach and efficient support. 

Charities are the backbone of any community. They’ve helped war veterans and provided families with meals, homes, and more. We might not be able to make a difference, but together, we can. Even though times are tough, it’s now more important than ever for charities to stay ahead and be innovative to rise above the challenges they face in today’s economy.

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