Recent riots have put the instability of the UK’s communities in the spotlight. And as night follows day, they have also highlighted the communities’ strengths: the people who freely give their time and money to respond to need, the leaders who reach across divides, and the organisations which coordinate, build partnerships and ensure this action can take place at scale. As the Secretary of State for Culture, Media and Sport has rightly recognised, charities and community groups are often those crucial organisations. They are essential to the immediate response and the long-term rebuild and restoration of communities nationwide.

The pandemic and cost of living crisis both tested charities’ ability to respond to challenges in a rapid and agile way. While charities rose to those occasions, they also cost the sector some of its own resilience.

Now, as the economy gradually returns to growth – albeit a sluggish growth – the charity sector has in turn emerged from existential crisis. It has now reached a new status quo. But that new status quo is neither healthy, nor stable for the people who rely on, volunteer with and work for charities.

The perennial financial challenges that plague the charity sector continue, with a third (32%) of charities expecting their finances to deteriorate while a further 35% expect their finances to stagnate.

Financial challenges are compounded by those stifling the workforce. While charities – particularly the largest ones - have continued to recruit at pace, recruiting the right people has been challenging. 4 in 10 (40%) charities are struggling with recruitment, and 57% of vacancies in the sector are now defined as hard to fill.

With both financial and human resources constrained, the ability of charities to meet ever-rising demand is also held back. 70% of charities expect demand for their services to increase over the next three months, and while the majority will just about be able to meet it, over one third of charities (35%) do not expect to be able to meet demand through the Autumn. That means people in need of charities’ support will not receive it, and if there are future crises that require charities’ support, other areas will have to fall away.

These triple tidal forces of restricted income, workforce challenges and ever-rising demand mean many organisations are in a constant state of adaptation and flux. This is leading to service cuts and cost increases for users, as a stretched workforce drops some of the balls they’ve been trying to juggle. 1 in 5 (18%) charities have had to cut the level or number of services they offer as a result of rising costs.

This means many charities cannot play their fullest possible role in building resilient communities. But they have the potential to. Charities have the infrastructure, organisation and knowledge to make a real difference to efforts to strengthen the UK’s communities – and could do so all the more effectively if they were strengthened in turn.

To enhance the charity sector’s ability to forge stronger communities, the government and funders should look to solutions that can both improve the financial picture and the challenges affecting the sector’s workforce. Revitalising local community infrastructure organisations is essential for spreading best practice, strengthening connections, increasing skills, and improving efficiencies. Sharing evidence of what works through the sector through a Civil Society Evidence Organisation has long been called for.

The newly formed government should embrace the chance provided by the establishment of Skills England to offer additional backing to address the skills shortage in the charity sector. With charities three times less likely to invest in leadership development than the wider economy, and digital skills a real weakness – with just 9% of charities exploring the potential of automation, there is real potential for this new body to make a difference.

Ultimately, the future of many of the pressures on the charity sector will depend on how the government tackles the long-term causes of demand for many of their services: poverty, ill health, broken public services, poor housing and more. But there are steps that it can take now to build a charity sector that itself is more resilient. In doing so, the government can unlock the charity sector’s capacity to build more resilient, more connected, and happier communities.

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