The findings from the latest wave of the Scottish Third Sector Tracker (summer 2022), show that the impact of rising costs is becoming increasingly apparent, both for third sector organisations and the communities they work with. Overall, 93% of organisations said they were experiencing rising costs in at least one area of their business, compared with 86% in Wave 3.

‘Rising costs and inflation’ was also the most frequently selected challenge for organisations, with 37% placing it in their top three challenges, a significant increase from 29% in Wave 3 (March-April 2022).

Organisations reported sharp rises in costs across almost all operating areas. The most pressing being the cost of materials and supplies (76% of the sector); transport costs (61% of the sector); energy costs (50% of the sector) and staffing costs (43% of the sector). Of organisations seeing rising costs, 43% felt this was having a negative impact on their ability to deliver their core services or activities.

To mitigate these impacts, 40% of organisations have applied for funding from new funders and one in three have used their financial reserves. One in ten have had to reduce their services or work.

Almost 80% of organisations reported they were seeing increasing financial hardship in the groups and communities they work with and 64% of organisations considered that demand for their services had increased, with 23% saying that demand had significantly increased.

Organisations that work directly with individuals were asked which needs or concerns they considered have worsened in the period since April 2022. 67% of organisations said that mental health and wellbeing was getting worse; 66% of organisations highlighted the rising cost of living, and 52% greater financial hardship or vulnerability in the communities or groups that they work with. Overall, 80% of organisations highlighted financial needs as being a worsening concern.

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