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James Pinchbeck, partner at Streets Chartered Accountants, considers the challenges being faced by charities and not-for-profit organisations.
The last few years have been challenging for many businesses and individuals alike, few though might appreciate the real upheaval and even struggle faced by charities and not-for-profit organisations.
The issues they face are often around declining income, increased costs and in many cases increased demands for the work they do, especially for those providing social care, wellbeing and mental health services and support for individuals affected by the cost-of-living crisis. We have also seen similar pressures and concerns for those involved in the arts, culture, and heritage as well as many research organisations.
Whilst businesses can look at increasing prices and passing on costs to maintain margins, or look at cost savings to manage the situation, it is not as easy for those in the not-for-profit sector. Incomes, especially for funded projects, programmes, schemes, or activities, tend to be fixed, as do the costs associated with delivery. It is also often more challenging to seek alternative sources of revenue or adapt services for new markets or opportunities.
Those that have traditionally relied on donations have seen a decline in individual giving. Dealing with
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