It has been six years since Covid-19 turned the world upside down. The pandemic hit every sector hard, but the charity world was hit especially hard. Not every organisation came out the other side, and many closed their doors during the first lockdown alone.

The number of people donating to charities fell sharply during lockdown. Cash donations dried up almost overnight as the country went cashless, forcing charities, many with no prior digital payment infrastructure, to adapt quickly to taking card and online payments. For smaller charities in particular, this was no small task.

Traditional fundraising disappeared almost entirely. Bucket collections stopped. Face-to-face events were cancelled. Charity shops closed their doors, and the British Heart Foundation reported losing around £10 million a month during lockdown as it furloughed staff and shut its retail estate. Across the sector, organisations were forced to abandon long-term planning and focus purely on meeting the needs of today.

Of course, the crisis also produced extraordinary generosity. Fundraising efforts across the country gave people hope and channelled vital funds, especially toward the NHS, none more famous than Captain Tom Moore, the 99-year-old war veteran who set out to walk 100 laps of his 25-metre garden before his 100th birthday. He raised over £33 million for NHS Charities Together, becoming a symbol of the public's determination to give back even in the hardest of times.

Government support wasn't evenly felt. Around half of charities with an income over £500,000 made use of furlough or emergency government funding, but smaller charities were far less likely to draw on this support, often unsure whether they'd be able to sustain staff beyond the pandemic. As a result, many simply stopped services altogether: 25% of charities with an income under £10,000 ceased all services, compared with just 3% of those with an income over £500,000.

Volunteering fell too. Existing volunteers stepped back and organisations found it difficult to recruit new ones.

Faced with these pressures, charities had to change how they worked, and fast. Staff and volunteers needed to be upskilled almost overnight, and organisations leaned into the digital tools available to them. Zoom became a lifeline as face-to-face support services moved online. For many organisations, this shift wasn't just a stopgap, it proved transformative, ultimately improving both productivity and efficiency in ways that have outlasted the pandemic itself.

Has the charity sector recovered? The honest answer is no. The pandemic left long-term financial challenges that the sector has not been able to shake off, not least because the cost-of-living crisis followed almost immediately after. The UK never had the breathing room to recover from one crisis before the next began, and for charities that has meant a tighter squeeze on both funding and impact ever since. The government does not expect the wider economy to return to "normal" until 2027.

Rising costs have forced many regular donors to cancel their giving. When people look to cut household outgoings, charitable donations are often among the first things to go.

Research by the Charities Aid Foundation (CAF), surveying 547 UK charity leaders, found that 58% ranked generating income and financial stability among their top challenges for the year ahead, while 59% were concerned that people would stop donating altogether because of the cost-of-living crisis. With disposable incomes squeezed and food and fuel prices high, charities can no longer rely on the steady support of their communities, a concern borne out by the one in seven people who say they intend to reduce their charitable giving this year.

Not-for-profit organisations are also feeling the pinch operationally: higher bills, rising minimum wage costs and increased National Insurance contributions have all added pressure, even as donations fall. Many have had to dip into reserves simply to cover day-to-day running costs, at the same time as demand for their services keeps rising, with more people turning to food banks and similar support than ever before.

The long-term outlook for the sector remains uncertain, particularly for smaller organisations that rely heavily on public fundraising.

It isn't all bad news. The shift to digital has given many charities wider reach and enabled a hybrid model of support that continues to serve people well, letting them choose how they access help even as normal life has resumed. Funding has evolved too: more grant-makers now offer flexible, unrestricted funding - a welcome change for charities, even if it means the competition for that funding is tougher than ever.