Sarah Nathan & Peter Dawson

The charity sector in Scotland, Wales, and Northern Ireland entered 2025 facing significant financial pressure. Rising costs, increased demand for services, and uncertainty around long-term funding have created a climate of anxiety. Yet, despite these challenges, there are clear reasons for optimism, with promising trends in giving, public sentiment, and government collaboration offering a brighter outlook.

Pressures Facing the Sector

One of the most pressing financial concerns for charities has been the increase in National Insurance contributions. In Scotland alone, SCVO estimates that this will cost the sector an additional £75 million per year, and similar concerns have been raised in Wales and Northern Ireland. Despite repeated calls for an exemption for charities, the UK Government has shown no indication of reversing its decision.

At SCVO’s The Gathering in early February, discussions around child poverty and poverty more broadly highlighted the immense strain charities are under. Many organisations are struggling to meet the rising demand for essential services while grappling with financial uncertainty and staff burnout. Funding is increasingly being redirected to immediate needs, making long-term planning more difficult and intensifying competition for available resources.

Another recurring theme at The Gathering was the urgent need for multi-year funding. A Scottish Parliamentary committee has recognised the financial instability caused by short-term funding cycles, and the Scottish Government has taken a step in the right direction by introducing a multi-year funding commitment in its latest budget. However, this remains an early step, and sustained advocacy will be essential to ensure lasting financial stability for the sector.

A Resilient and Supportive Public

While these financial and structural challenges are significant, there is strong evidence that public support for charities remains robust.

Giving levels have not only recovered post-pandemic but have exceeded previous benchmarks:

Looking ahead, donor confidence is also encouraging:

• In Scotland, there was a net increase of 8% in people saying they plan to give more in the coming year.
• In Wales, the figure was slightly higher at 10%.
• In Northern Ireland, optimism was strongest, with a net 18% of people expecting to increase their giving.

Beyond financial support, public sentiment towards charities remains highly positive:

• In 2024, 73% of people in Scotland agreed that the charity sector is a force for good.
• In Wales, 65% shared this view.
• In Northern Ireland, confidence in the sector was similarly strong, with 70% of people acknowledging its positive role.

Charities are also widely recognised as vital voices for their communities:

• In Scotland, 75% of the public believes that charities should advocate for the people they serve, even on controversial issues.
• In Wales, 72% of people agreed.
• In Northern Ireland, 76% supported the idea that charities should speak up for their communities.

There is broad agreement that charities should play an active role in government decision-making:

• At the local government level, 61% of people in Scotland, 68% in Wales, and 70% in Northern Ireland believe that charities should have a voice.
• At the national level, support remains strong, with 61% of the Scottish public, 66% of the Welsh public, and 66% of the Northern Irish public agreeing that charities should be involved in national policy discussions.

Steps in the Right Direction

While concerns remain over policy decisions at the UK level, recent developments suggest greater collaboration between the UK and devolved governments. Since the change in UK Government in July, discussions between administrations have been more constructive, and all three devolved governments received funding increases in the Chancellor’s autumn budget.

In Scotland, this has created a more stable budgetary environment, with the First Minister recently announcing a £60 million multi-year funding programme for charities. This marks a positive step towards long-term sustainability, reinforcing the importance of continued advocacy to secure additional multi-year funding across governments.

Moving Forward with Confidence

The challenges facing the charity sector in Scotland, Wales, and Northern Ireland are real, but the outlook is not entirely bleak. Public generosity is strong, sentiment towards charities remains highly positive, and governments are beginning to take steps towards more sustainable funding.

While vigilance and continued advocacy are needed, the resilience of the sector, combined with increased public engagement and emerging policy shifts, offers reasons for cautious optimism. By capitalising on these positive trends, charities can navigate the uncertainties of 2025 with renewed confidence and a focus on long-term impact.