The cost-of-living crisis poses as big a threat to disadvantaged communities as Covid and needs a similar response from philanthropists to swiftly fund support.

The call has been made by think tank New Philanthropy Capital, which said “now is the moment for philanthropists to get on and give” as rising inflation “is as big as Covid, possibly bigger”.

“We need the kind of mobilisation that we saw at the start of the pandemic,” said NPC.

“Now is not the time to watch and wait. Destitute people can’t wait. If funders aren’t thinking about the cost-of-living crisis, then they’re doing philanthropy wrong.”

To help funders act, NPC has produced a guide for the philanthropy sector highlighting the most impacted communities and challenges charities are facing to support them.

Advice in NPC’s Confronting the cost-of-living crisis: How funders can mobilise guide includes increasing the size of grants and the speed they are handed out based on talking to grantees about how inflation is impacting on them.

Simplified applications are needed, to help get money to charities quickly. Funding should also be unrestricted to give charities the flexibility to meet the needs of their beneficiaries.

Funders also need to consider whether their focus of giving needs to change. For example they need to talk more to community foundations and councils around place based giving.

“Life is getting more expensive for everyone, but for the poorest, for whom money was already tight, the crisis is existential,” said Naomi Chapman, an NPC consultant who is among authors of the guide.

“The poorest households spend a larger proportion of their income on items for which prices are rising fastest, and there’s very little they can cut back on.”

“Over two thirds of poor households are in work, and more than half of Universal Credit recipients are still in poverty even with the taxpayer’s help.

“Of course, the government should do more, but right now with both work and welfare failing to solve the problem of poverty, philanthropists must step in to prevent needless hardship.”

She added: “Meanwhile the same factors which make life harder also constrain the charities and volunteers who try to help. A rise in the price of food, energy, and petrol is a big problem if your charity helps feed, house, or transport people.

“Funders therefore need to give more and give flexibly if they’re to achieve any impact.”

NPC also warns funders against focusing on financial education which “is not the answer” to helping cash strapped families cope with rising inflation. It points out that “put simply when you have little, you get very good at knowing where it goes”.

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