For charities, inflation is disastrous. Currently standing at just over 9 per cent, it means that even if donors continue to give the same amount each month, its value has shrunk.
“In our own survey of members, half of the charities surveyed reported that they did not have sufficient funding this year,” Ivan Cooper says, director of public policy at The Wheel, the national association of charities.
“The steep rise in energy costs is having a significant impact on many organisations, and some community centres, youth and childcare facilities, arts spaces, homeless services and other community and voluntary groups will struggle to keep the lights on in the coming months.”
The Government recently announced a €10 million Community and Voluntary Energy Support Scheme, which will provide one-off support to some organisations that fall outside the parameters of other energy support schemes. “This will provide welcome relief, but uncertainty remains,” he says.
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“At the same time, the cost of insurance remains a key and sometimes existential issue for charities and community groups. The unsustainable rise in insurance costs is having a very serious effect on many organisations in the sector. Many members have seen insurance premiums for employer and public liability insurance increase by up to 400 per cent in recent years, with some members having to close services because they cannot pay the premiums.”
Charities and community groups rely heavily on volunteers, but many also have to employ staff to deliver services and run their organisations effectively, he points out.
“Salaries in the sector are not keeping up with inflation, and a new survey conducted by The Wheel and the Community Foundation for Ireland found that keeping existing skilled employees and recruiting new staff is a big issue for most charities. The rising cost of living is driving staff towards higher-paid jobs and charities struggle to fill vacancies,” says Cooper.
But inflation’s teeth are always sharpest for those with the least means. “We did a survey recently of 300 parents and 28 per cent of them had already cut back on electricity. One in four had to choose between heating the house or feeding themselves, the sort of choices no one should be making in 2022,” Seán Bergin says, national fundraising manager at Barnardos, which helps vulnerable children and their families.
“Some of our frontline workers have been with us since the 1980s and they are telling us they haven’t seen deprivation of this kind since the 1980s.”
Price inflation is forcing more people to make difficult choices. “People are having to ask will I spend that €20 topping up the electricity or on food? Children depend on the adults in their life to provide for them, they don’t have a choice at all. It can be especially hard for people in rural areas struggling to afford the schoolbus or put petrol in the car. People in the countryside are more likely to use solid fuel too and a bag of coal has gone from €17 to €40 in a year,” Bergin says.
The Alzheimer Society of Ireland (ASI) runs 40 different day centres for people with dementia. “We’re not going to be cutting back on heat and light at those. For a start, the people who use our services tend to be older and we provide them with a whole range of activities so that it’s a home from home. These are fixed costs. If a utility goes up, we have to absorb it,” ASI chief executive Andy Heffernan says.
“But on top of that the people visiting the day centres are often dropped off by family member, who maybe have to drive 20 or 30 miles to get there. The increased cost of petrol is a big worry for them,” he says.
As Cooper points out, inflation is also making it harder, in a tight labour market, for charities to attract and retain staff. Even though they deliver so many public services, charity workers are not public servants. They do not come under the 6.5 per cent public sector pay deal, for example.
The increased cost of living, combined with soaring accommodation prices, makes it harder still for them to compete for talent. “Remote working helps where it is possible, but with service delivery people need to be on site,” says Amy Carr, director of fundraising and marketing at Focus Ireland.
