How worried should charities be about a possible recession?

Artful photo of dozens of bank deposit drawers open to varying degrees of disarray

How worried should charities be about a possible recession?

There are storm clouds on the economic horizon. Again.

Between grumbles from JP Morgan about a global downturn, the trade policy rollercoaster over the past few months, and the persistent whiff of uncertainty clinging to just about everything, it’s not exactly champagne and caviar in the macroeconomic forecast. For UK charities – already navigating a cost-of-living crisis, soaring demand and flatlining funding – the spectre of a recession in 2025 feels less like a question mark and more like an ominous inevitability.

So, how worried should the sector be?

The good news (yes, there is some)

Let’s start with a rare splash of optimism: fundraising doesn’t necessarily collapse when the economy does. In fact, charitable giving can be surprisingly resilient – and, at times, even counter-cyclical.

One reason? The people most likely to donate are not always those most exposed to job losses. Pensioners and higher-income professionals – groups typically less affected by downturns – form a sizable chunk of the giving public. For them, economic hardship is often more visible than personal. And when hardship becomes more visible, so too does the impulse to help.

There’s also a silver lining in the world of advertising. When businesses tighten their belts, ad space gets cheaper. For charities with the nerve (and budget) to keep spending, this opens the door to a stronger share of voice – at a discount.

Data backs up this contrarian logic. We track a basket of Irish fundraising charities and – until very recently – their income peaked in 2011; the very heart of the last recession. That wasn’t a fluke. Our clients tell us that they were able to pick up ad space for a song when the economy was at its worst.

Our own research consistently shows that charitable giving is one of the last things people cut. It’s a small enough slice of the household budget not to make a meaningful financial difference, but a large enough slice of people’s identity and values to be fiercely protected.

The bad news (you knew it was coming)

Still, let’s not pretend this is something to look forward to.

Economic pain brings more than just anxious headlines: it brings real pain to real people. Demand for services will rise, and charities serving frontline needs will feel the pinch from both sides: more mouths to feed, fewer resources to feed them.

At the same time, government finances – already looking a little malnourished – could deteriorate further. A recession means less tax revenue, which could mean further pressure on contracts and grants. And then there’s the housing market. A significant correction in house prices wouldn’t just rattle homeowners; it could eat into legacy income, a vital source of support for many organisations. Corporate giving too looks like an easy cut for companies looking to tighten their belts.

So while individual giving may hold steady, the rest of the ledger might not.

What should charities do prepare?

First and foremost: don’t panic. Second: don’t stop investing in your brand.

It’s tempting to pull back on marketing in a downturn. Resist the urge. Decades of research (including during the COVID-19 pandemic) show that brands that continue advertising during recessions recover faster and gain ground on their more timid peers. Visibility is resilience.

Equally vital: understand your audience. Not in a vague, heartwarming way – really understand them. Who’s giving, what motivates them, where they spend their time, and how you can reach them with less. The charities that thrive are the ones that spend smarter, not just harder.

Charities should be concerned, but not paralysed. Recessions are tough, but they’re also revealing. They expose weaknesses – and highlight strengths. The organisations that come through the next one strongest will be those who keep their nerve, double down on what works, and stay connected to the people who care about what they do.

There are storm clouds on the horizon. But that doesn’t mean you throw away the umbrella.

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