Charity Sector Survey: risks, resilience and growth in the South West

Westcotts has run a major survey of charities operating in our region to understand the pressures, risks and ambitions shaping the sector in 2026.

The results reveal a sector still fuelled by purpose and impressively resilient but navigating financial headwinds, digital disruption and governance challenges that cannot be ignored.

Navigating an uncertain landscape

In a rapidly changing world, charities continue to serve as the backbone of our communities, supporting people through hardship, amplifying unheard voices and stepping in where gaps appear.

The clear message from our survey is that while hope is strong, the journey is not without risk, challenge and opportunity.

Charities are experiencing rising levels of uncertainty.

• Many report increased financial risk, from shrinking grant opportunities to reductions in local authority funding.
• Specifically 62% reported additional efforts needed in order to maintain fundraising levels.
• 78% of Charities reported having adequate reserves in place for an unknown future, with the focus now needing to be on building cash reserves.

Challenges

The sector continues to face the enduring challenge of balancing rising need with limited capacity. Charities face the pressure to demonstrate impact with reduced levels of funding and resources.

Charity teams who completed the survey describe:

• Increasing wage and National Insurance costs having a significant impact on finances
• Increasing competition for grants against the backdrop of a reduction in available funding streams being offered by government and local authorities
• Economic climate resulting in decreased public spend and fundraising
• 71% of participants describe the challenge of trustee recruitment and more specifically the need for specialist knowledge such as finance, legal, marketing and general strategic thinking individuals

Despite these obstacles, charities continue to show resilience driven by purpose.

AI involvement and cyber security

AI is emerging as both a breakthrough tool and a source of anxiety within the sector.

Many teams are excited about the possibilities of automating admin tasks to free up staff. AI can also be used to support grant writing or volunteer management and enhance data analysis to improve service delivery. But alongside this, it is evident from responses that charities have a real concern about cyber security.

Charities are often under-resourced in IT, mostly due to costs restrictions, and find themselves vulnerable to phishing and data breaches via AI, social media and cloud storage. 100% of survey respondents explained they are either spending the same costs on IT this year or more.

Most organisations are taking a cautious but proactive stance: embracing digital innovation while investing in stronger cyber-safeguards, clearer internal policies and training that builds confidence rather than fear.

Successes and collaboration

Even in a difficult year, charities are celebrating meaningful wins with 94% reporting collaborating with other organisations, such as fellow charities, professional services, community businesses and local authority.

Survey responses highlight:

• Deepened community partnerships, sharing best practice and resources
• Successful fundraising campaigns that have provided synergies and increased awareness
• Charities reliant on their volunteers who are stepping up in extraordinary ways
• Impactful ESG goals – specifically governance

This spirit of cooperation is becoming one of the sector’s greatest strengths. Charities are no longer simply sharing resources – they are sharing wisdom, networks and long-term vision. One evident outcome from the survey was the amount of service users that have been reached as a result of the passion and commitment from these charities.

Future growth

Looking ahead, charities express a cautious optimism. Many foresee growth in digital capabilities and partnerships with other charities, alongside the focus on financial stability. Yet the real source of hope is simpler: people.

The compassion of staff, the dedication of trustees, the courage of volunteers and the determination of communities to take care of one another.

The charity sector stands at a pivotal moment. Risks are real, challenges are significant, and yet the sector remains steady with purpose. From the survey, charities continue to sufficiently mitigate risks, manage financial challenges and focus on channels that enable growth.

If you would like to discuss how your charity can strengthen governance, build financial resilience or plan confidently for the future, our specialist charity team is here to help.