The squeeze is real: What the Charity Commission’s latest data means for your fundraising

The Charity Commission’s Annual Return Analysis for 2024, published two weeks ago, paints a picture of a sector that is delivering more, but running on fumes. Charities in England and Wales spent £100 billion on their missions last year, a 5.4% increase that outstripped inflation. Income rose too, to £102 billion, with public donations and legacies accounting for £32 billion of that total. With grantmaking charities awarding nearly £18bn in 2024 (up 5% from 2023). On the surface that’s good news.

Look closer, though, and the warning signs are hard to miss. For a third consecutive year, the data reveals a financial squeeze. The margin between income and expenditure across the sector was just £1 billion. This is better than 2023’s five-year low, but still well short of pre-pandemic levels. Worryingly, two in five charities spent more than they earned. And a quarter of the smallest charities (those with income under £10,000) reported only breaking even. Many are living hand to mouth or simply beyond their means. This is not sustainable.

To add to this, CAF’s recent UK Giving Report 2026, highlighted a 10% drop (or £1.4 billion) in donations by the British public in 2025. CAF also reported that there are six million fewer donors than a decade ago, and highlighted the Covid-19 pandemic as a period of significant loss.

Charity fundraising strategy and small charity sustainability

For smaller charities, faith organisations and schools, three implications stand out.

1. Donor income is your lifeline, and it needs active cultivation. Small charities depend disproportionately on donations and legacies. Yet that income doesn’t simply arrive. It requires a credible case for support, strong relationships and a plan. Too many smaller organisations leave this to chance. A structured approach to individual giving, even a modest major donor programme, can transform your finances.

2. Thin margins leave little room for error. When you’re breaking even or running a deficit, every strategic decision matters. Trustees need clear financial information and analysis, realistic fundraising targets and an honest assessment of what the organisation can raise. The Commission’s own Trustee Finance Toolkit is a useful starting point, but many boards need external support to make these informed decisions.

3. Volunteers are rising in importance, and that needs a strategy too. The ratio of volunteers to paid staff climbed again in 2024, to 3.8:1. For organisations losing posts or unable to recruit staff, volunteers are becoming increasingly critical (haven’t they always been). But volunteers fundraising for your organisation doesn’t happen by accident. It needs investment in training, coordination and a culture where fundraising is everyone’s business.

Where does Craigmyle come in?

These are exactly the challenges we work on with charities, faith organisations and schools every day. From developing realistic fundraising strategies and building major donor programmes, to supporting trustee boards with fundraising reviews, financial planning and training. If the Commission’s data rings true for your organisation, get in touch. A conversation costs nothing. Doing nothing costs more.