Kreston Charities Report 2025 shows charities adapting to financial pressures

June 25, 2025

The Kreston Charities Report 2025, released by the Kreston UK Charity Group, highlights the growing financial pressures, recruitment challenges, and political uncertainty facing UK charities. Drawing on responses from more than 2,000 organisations across the UK, the report provides vital insight into how charities are coping with rising costs, shifting government policy, and ongoing demands on their services.

Rising costs and funding pressures

This year’s findings reveal that 80% of charities are experiencing pressures on their income streams, with many also facing significant cost increases. Over the past 12 months, 92% of respondents reported wage increases, 61% faced higher energy bills, and 69% experienced increased insurance costs.

Despite these challenges, 63% of charities are exploring options to diversify income streams, such as expanding corporate giving, grants and legacy fundraising. Encouragingly, 85% believe they have the capacity to deliver their required services in 2025 – a testament to the resilience of the sector.

Recruitment and skills shortages

Almost half (44%) of charities report difficulties recruiting and retaining staff, with many increasing salaries and offering flexible or hybrid working to attract employees. However, trustee recruitment remains steadier, though 90% of charities still identify gaps in key areas such as legal, IT, and HR expertise.

ESG and risk management

While public interest in sustainability continues to rise, most charities (49%) are not increasing their focus on ESG in 2025, citing financial pressures and limited capacity. Nonetheless, many are strengthening governance, with 46% reviewing their risk registers at every board meeting and identifying reduced funding as the biggest emerging risk.

Political landscape and outlook

A major shift in sentiment is evident this year, with 81% of charities believing the new Labour government will have a negative impact on their operations – a stark contrast to 2024, when most expected Labour to support the sector. Despite this, 78% say they are keeping up with digital changes, and most have adequate cybersecurity measures in place.

The Kreston Charities Report 2025 highlights the UK’s charitable sector’s determination to adapt and persevere through financial and political uncertainty, continuing to deliver vital services to those most in need.

Read the full Kreston Charities Report 2025 here. If you are a charity and you would like to speak to one of our UK firms, please find your nearest UK office here.