The Charity Finance Group (CFG) has reported a “planned” operating deficit after investing in a digital programme and seeing member numbers decline.
CFG’s latest annual report, published this week, shows that its overall income exceeded projections in the year to March 2025 thanks to “higher-than-expected” grant and gift-in-kind income.
Total income at CFG increased from £1.82m in 2023-24 to £1.99m in 2024-25, but the organisation said its membership income “fell short”.
The report shows that CFG had 1,294 charity members in 2024-25, down from 1,415 in 2023-24 and 1,466 in 2022-23.
Most charities that did not renew their CFG membership were in the £1-5m income bracket, with many citing the impact of the increase in employers’ national insurance contributions from April 2025.
Meanwhile, CFG saw its expenditure rise by 23% to £2.12m, meaning it ended the year 2024-25 with a deficit of nearly £124,000.
The 23% increase was largely driven by costs associated with a digital transformation programme and the creation of new roles to support CFG’s members and beneficiaries.
CFG expects to record a surplus in 2025-26, “with new business development plans and capitalising on our investments in people and digital transformation, which will enable us to deliver more effectively and efficiently for the sector”.
‘Deficit aligns with scale of change undertaken’
CFG’s deficit comes after the organisation recorded its first financial surplus in five years in 2023-24.
Kath Qualtrough, interim director of finance at CFG, said: “We’re reporting a planned deficit for the year, but one that aligns with the scale of change we’ve undertaken, and one that reflects the strategic investment we’re making to strengthen our foundations for the future.
“The implementation of our new finance system, as well as spending on key platforms like our new CRM and development of our website, will allow us to serve our members and the wider sector in new, impactful ways.
“And beyond systems, the investments we’ve made in our people will better equip CFG and allow us to remain agile in response to external challenges.
“We’re committed to helping charities achieve more, and by utilising all that CFG provides for the sector, organisations can build those strong foundations and create lasting impact.”
