Voluntary organisations across Wales are dealing with rising demand, worsening financial positions and a growing reliance on reserves, putting long-term sustainability at risk.
The warning comes from the latest Baromedr Cymru findings from Wales Council for Voluntary Action (WCVA), which said it was not just bad news for leaders of charities and voluntary organisations, but for the everyday people that rely on the often life-saving services they provide.
The research, carried out in November 2025 (Wave 1) and February 2026 (Wave 2), gathered insights from more than 200 organisations. Across both waves, generating income remains the top concern, reported by 81% of organisations in Wave 2 and 90% in Wave 1. Meanwhile, two-thirds say their financial situation has deteriorated due to rising costs (66% Wave 2; 74% Wave 1).
A significant number of organisations also report relying on their reserves simply to maintain day‑to‑day operations. While the majority hold reserves, almost half are currently using them (45% Wave 2; 48% Wave 1). A substantial minority have “dangerously limited” cover remaining, with 22% holding three months or fewer in Wave 2.
“These findings show a sector under intense strain,’ said Dr Lindsay Cordery‑Bruce, Chief Executive of WCVA.
“Rising demand, rising costs and insufficient funding uplifts are combining to create a perfect storm. We continue to hear how organisations are doing everything they can to support people and communities, but many are now operating without the safety nets they once relied upon. This puts essential services – and the people who depend on them – at risk.”
Service demand remains high across the board. In Wave 2, 63% of organisations reported increased demand in the previous three months, and 68% expect demand to increase further in the months ahead. The sector is already at capacity: 37% say they are unable to meet current levels of demand, up from 32% in Wave 1.
At the same time, organisations are facing growing workforce challenges. Difficulties with volunteer recruitment have risen sharply, from 37% in Wave 1 to 54% in Wave 2, while volunteer retention issues have also increased. Many organisations report that volunteers are being asked to work more hours to compensate for staff losses or budget constraints, a trend that risks becoming unsustainable.
Funding arrangements continue to be a major part of the problem. Wave 1 findings highlight that while most organisations include full costs in funding bids, only 30% say funders cover these costs when funding is awarded, and a third say funders rarely or never do. Multi‑year grants and contracts also remain uncommon, with just 9% reporting that public funding is multi‑year most or all of the time.
‘These systemic issues can’t be resolved by organisations working harder alone,’ added Dr Cordery‑Bruce.
‘We need a funding environment that reflects real costs, keeps pace with inflation, and provides long‑term certainty. The resilience of our voluntary sector is essential to the wellbeing of Wales – and it needs support now more than ever.’
WCVA said it will continue to use Baromedr Cymru to track the trends, champion the needs of the sector, and work with partners to strengthen the long‑term sustainability of Wales’ voluntary organisations.
