Watch our Video
A 2026 outlook assessing how the Gulf conflict may affect UK charities, covering demand for services, fundraising trends, government funding pressures and operating cost impacts, based on Charity Excellence’s ongoing sector analysis.
Outlined below is a summary of our Fundraising Trends 2026 and, below that, our assessment of the impact of the Gulf Conflict on this. Below that is our rationale for this in more detail.
Since 2020 the charity sector has been in a near‑continuous state of crisis, moving from Covid to the cost‑of‑living shock and then into a period of prolonged fragility, with each recovery taking longer and proving weaker than the last. Our long‑running fundraising data shows that, unlike Covid and the Cost of Living crises, this time fundraising resilience did not fully recover to previous levels, leaving many charities structurally weaker and less able to absorb further shocks.
Even before the recent Gulf crisis, the risk of a further sector crisis was already high, driven by weak economic conditions, huge fundraising competition, rising costs and the enduring impact of previous Government funding cuts.
In our crisis impact assessment below, we assess the impact on demand for charity services, fundraising, Government Funding and operating costs.
Summary. If the Gulf conflict persists or escalates, charities are likely to face higher demand for services, weaker real‑terms income, and rising operating costs, with net pressure on financial resilience. Confidence in this is assessed as high/medium because the direction of travel is clear, whilst energy price, inflation and confidence shocks, and the scale and duration remain uncertain.
Key Risks. In light of this latest assessment, we believe that, if the conflict continues for a significant period of time:
The conflict is beginning to have a real and growing impact on an already fragile sector.
Whether that plunges us into a further, deeper and longer crisis than ever before, depends on whether, or not, the current conflict escalates and how long it lasts.
And whether sector bodies, Government, and/or grant makers are will to act. Collaborative action by the sector to deliver a support strategy, and action by Government and grant makers would make a difference. However, that would require genuine collaboration, commitment and delivering, not just talking.
Energy price shocks and inflation disproportionately affect low‑income households, increasing hardship and reliance on charitable support.
Demand for charity services is likely to increase, particularly for those working in poverty related areas, such as food banks and advice, as higher energy and living costs feed through to households. This will increase workload on already badly overstretched services and, for those able to increase delivery to meet demand, increased costs.
The UK Giving Report 2026 (published March 2026 by CAF) includes that we donated £14bn in 2025, compared to £15.4bn in 2024. This is the first fall since 2021, which they attributed to lower average donations, more people cancelling transactions and many not being able to afford giving to charity.
Falling consumer confidence and higher essential costs will reduce disposable income available for giving, which is likely to put further downward pressure on giving by the public.
The conflict has pushed up energy prices and the UK economy is quite likely to suffer — with a medium‑to‑high risk, because higher energy prices feed through quickly into inflation, confidence, and spending. With the exception of legacies and retail, almost all fundraising income is impacted by an economic downturn.
Over the next 6 to 12 months it's highly likely that inflation will rise again. In the medium term, it will depends on how long the conflict and energy disruption last
A humanitarian crisis in the Middle East is already unfolding and is very likely to worsen if the conflict continues or spreads. Some donors may divert their funding to support this. This will add to the above but will be most sharply felt by those working in the Region and its communities.
Rising debt servicing costs and pressure for household support may well crowd out other spending. There may also be pressure to increase defence spending. That will increase the risk of additional real‑term cuts to Departmental budgets, which would almost certainly passed on to charity contracts and grants. Government funding is the 2nd largest income source and is particularly important. Fundraising tends to recover with the economy buts below inflation rate funding uplifts to contracts and cuts to grant funding tend not too. We think this is primarily why fundraising resilience has failed to recover since the £1bn funding cuts by the Government in mid 2023. This is what caused the last crash for the sector.
Confidence: Medium. The fiscal pressure is clear but we don't know how bad it'll be or what specific spending decisions might be made in light of this.
Charity operating costs are likely to rise again. Those able to meet the rise in demand will incur additional costs in doing so and, overall costs will increase for everyone. The impact on increasing temperatures and longer daylight hours, will mitigate the impact of growing energy costs, until the autumn.
A registered charity ourselves, the CEF works for any non profit, not just charities.
Plus, 60+ policies, 8 online health checks and the huge resource base. Our AI Ready programme and Charity Excellence Learning free online AI training courses, give non profits everything they need to make effective use of AI and stay safe.
Find Funding, Free Help & Resources - Everything Is Free.
