• Over a five-year period, the greatest challenge small charities faced was their workload, followed by funding, and demand for services.
  • In 2019/20, the challenge of rising demand for services (18%) had overtaken funding (16%) as small charities’ second greatest challenge.
  • In 2017/18, over half of small charities (57%) reported that their most pressing issue was ‘generating income and achieving financial sustainability’.
  • In 2019, 95% of charities reported they perceived public trust had declined. Small charities were least likely to perceive this to have any effect on their organisation compared to large charities.

What are the main challenges facing small charities?

  • Between 2014/15 and 2019/20, the challenges facing small charities have remained relatively consistent.
  • Over a third of small charities have consistently reported workload as their greatest challenge. This is followed by funding and demand.
  • Between 2014/15 and 2019/20, the proportion of charities reporting recruitment as their greatest challenge rose from 3% to 8%.

What are the most pressing issues for small charities?

  • In 2017/18, over half of respondents reported ‘generating income and achieving financial sustainability’ as their most pressing issue for the next 12 months.
  • Charities are almost four times more likely to identify funding issues as the most pressing issue facing their organisation than any other issue, year-on-year since 2015.

How do charities perceive the effects of a decline in public trust?

  • In 2020, the majority (95%) of charities agree that public trust in the charity sector has declined.
  • In 2020, over half (52%) of small charities reported that a decline in public trust has no effect on their organisation, up from 47% in 2017.
  • Small charities are notably less likely to feel affected by a decline in public trust than large charities.
  • The aspect of operations perceived to be most affected by a decline in public trust is reduced fundraising income, which was seen as less of an issue for small charities than for large and major charities (18%, compared to 31% and 27% respectively in 2020).


The impact of Covid-19 on small charities

How has COVID-19 affected the needs and services of small charities? What challenges has COVID-19 posed?

Find out more

Skills and Capabilities

What skills are small charities strongest in? Where do they need upskilling?

Find out more

Further reading

Localgiving 2015-2017/18 Local Charity and Community Group Sustainability Reports 2015, 2016, 20176/18

New Philanthropy Capital 2020 State of the Sector 2020: The condition of charities before the Covid-19 crisis  

New Philanthropy Capital 2017 State of the Sector: Charities taking charge: Transforming to face a changing world

NCVO & Lloyds Bank Foundation 2016 Navigating Change: An analysis of financial trends for small and medium-sized charities

Lloyds Bank Foundation & Evidential Consulting 2017 Facing Forward: How Small and Medium-Sized Charities can Adapt to Survive 

Charities Aid Foundation 2019 CAF Charity Landscape 2019  

Small Charities Coalition & TSB Bank plc 2016 Small but vital: Local Charities Matter