Mid year review | What’s shaping the charity sector in 2026?

At the midway point of 2026, the CharityForum has taken some time to review the biggest issues shaping the year so far.

It’s clear that the charity sector in 2026 continues to face rising demand, falling income, and increasing costs.

So what are the best practical ways in which charities can respond, to ensure the best possible support for the people and communities you serve?

We’ve listed six key issues shaping the sector, with practical pointers on how best to focus your charity’s response, and in which areas.

1. Funding decline

Funding has been a challenge for some time – c79% of charity leaders cited finance as a top concern in NCVO’s 2025 report, The Road Ahead.

Funding continues to be a top issue in 2026. The recent Charities Aid Foundation (CAF) UK Giving Report 2026 highlights that:

donations dropped by around £1.4 billion in 2025
about 50% of people now give to charity, down from 61% ten years ago
costs for charities are rising due to inflation, wages, and energy bills

How could you respond?

Diversify income streams: Think beyond traditional donations. Consider, for example, social enterprise or partnerships
Grow ‘flexible funding’ options: With unrestricted ‘flexible’ grants, rather than more rigid project specific grant funding, you can respond quickly to real needs
Invest in fundraising capability: Data-driven fundraising and digital giving matter more than ever

💡 Impact of response:

More stable funding means more people can be helped by way of fewer service cuts, faster support where it’s needed, and more focus on the cause.

2. Rising demand

Demand is rising faster than some charities can keep up. In late 2025, the Royal Voluntary Service (RVS), following research by Nottingham Trent University in their VCSE Barometer Survey 2025, noted that:

44% of charities report rising demand
1 in 4 can’t meet that demand
Cost-of-living pressures are pushing more people to seek help

This means organisations as a whole are stretched, not forgetting the vital teams and individuals on the ground. Charities like food banks, mental health services, and crisis support are especially affected.

How could you respond?

Prioritisation: Not everything can be delivered at once. Having a clear focus will lead to a deeper, more meaningful impact over time
Collaboration: Charities working together can reduce overlap and reach more people. Consider partnerships or more informal close collaborative relationships with charities that share similar aims to your own
Early intervention: Investing efforts in prevention, if this is relevant for your charity, reduces long-term demand.

💡 Impact of response:

Faster access to help for service users, more joined-up support, and less falling through the cracks.

3. Changing donor behaviour

The decline in donors has cost charities an estimated £12.4 billion over the past 10 years, says the CAF UK Giving Report 2026, which estimates that figure to be equivalent to around a year’s worth of giving and around 6 million fewer donors.

But giving is changing, not just declining. Further analysis from the CAF UK Giving Report 2026 shows that:

In 2026, giving is increasingly unplanned – around two thirds of charitable giving is via a fundraising website, crowdfunding, social media, or via collection buckets – 40% of donors said they usually only give to charity when directly asked or moved by an appeal
One in five people say they can’t afford to give money to charity
19% of people in the CAF’s report said they didn’t trust charities to use their money wisely.

How could you respond?

Make financial giving easy and immediate
Focus on trust: Share your impact, and be transparent about it – show people the difference they make, and how their time or money improves lives or communities – make them an active part of the story
Giving doesn’t have to be financial. People could give their time as volunteers, by campaigning on your behalf, by taking action locally.

💡 Impact of response:

You’ll have more consistent and more invested support streams, stronger community backing around services, and increased belief in the difference that can be made.

4. Volunteer experience

Volunteers are essential, but they’re not easy to find – or keep.

54% of adults had participated in either formal or informal volunteering at least once in the last year, the Government Community Life Survey 2024/25 found
Yet there’s a shortfall of up to 3 million volunteers, reports the Royal Voluntary Service (following Nottingham Trent University’s research). The organisation is urging the public to take on volunteer roles with causes they care about
19% of people worry that volunteering options won’t be flexible, says the RVS.

How could you respond?

Offer flexible, bite-sized volunteering, to enable people to offer support with options that fit around busy lives
Encourage skills-based voluntary options: enthuse a new generation of volunteers – you could be tapping into professional expertise with, for example, technology, finance, marketing
Demonstrate that you value your volunteers. Recognise them, show them you appreciate them, ensure they have a positive experience throughout, including any training, support, and guidance.

💡 Impact of response:

With engaged, invested volunteers there will be more capacity to help service users with better-quality services, and often more personalised support.

5. Team and capacity pressures

Over the past year, 51% of charities surveyed by the Charity Finance Group have not filled vacant positions, while 35% have made staff redundant, and a further 35% have cancelled plans for new positions.

How could you respond?

Invest time into the team you have around you – positive team wellbeing enables you to retain and nurture the best talent, knowledge and experience
Embrace digital tools – automation and technology and can reduce admin load on the people in your team, and free them to focus on more strategic tasks to drive growth and impact
Collaborate across teams to ensure everyone’s on the same page, and that you are benefitting from diverse perspectives

💡 Impact of response:

Focus on these areas will lead to more consistent and stronger team relationships, higher-quality support, and improved morale.

6. Impact transparency

Funders and donors are increasingly hungry to know the impact they’re making (and this goes hand in hand with trust) – that could be through data, outcomes or measurable change. But not all impact is easy to quantify.

How could you respond?

Share what actually matters to beneficiaries – not just what’s easy to measure
Involve service users in development and evaluation of activities – keeping the people who need your services at the heart of your mission improves both impact, and your ability to evidence it
Tell compelling human stories, with data if you can – numbers and people stories are a powerful combination.

💡 Impact of response:

What you do becomes more relevant, trusted, and effective, which will lead to better supporter engagement and better outcomes for your cause.

The charity sector in 2026 is under strain, but is as essential as ever – perhaps even more so.

To thrive, ensure you take on feedback, collaborate, are adaptable to giving behaviours that continue to evolve, and keep the people, communities and causes that it is your mission to help at the centre of it all.

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