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Key Trends Shaping the Charity Sector in 2026

The charity sector continues to navigate a challenging and fast-changing environment. While organisations are embracing new technology and finding innovative ways to work more efficiently, they are also facing financial pressures, funding uncertainty, and ongoing challenges around inclusion.

AI Is Becoming Part of Everyday Charity Work

One of the biggest themes this year is the rapid rise of artificial intelligence (AI). According to the latest Charity Digital Skills Report, 79% of charities are now using AI in some form, making it one of the fastest-adopted technologies the sector has seen. Many charities are using AI to save time on administration and project management, helping teams do more with limited resources. However, concerns remain, with 56% of charities worried about relying on AI because of gaps in skills and confidence. The report highlights a clear need for more training and support to help charities use these tools safely and effectively. 

Financial Pressures Continue to Bite

Financial pressure remains the sector’s biggest challenge. The Charity Digital Skills Report found that squeezed organisational finances are affecting nearly two-thirds of charities (63%). Despite these pressures, charities are continuing to make progress, with over 80% reporting improvements in their digital capabilities this year. 

Funders continue to struggle – some are having to bring forward their deadlines for applications due to overwhelming responses. Others are narrowing their criteria. A controversial example of this is the Lottery Fund changing the way ‘communities’ are defined, making them place-based. This can make it harder for certain charities and beneficiary groups to access support.

Inclusion Work Faces New Challenges

Another important issue is the future of inclusion work. Many organisations remain committed to diversity, equity and inclusion, but limited resources are forcing some charities to prioritise immediate service delivery over longer-term inclusion initiatives. In addition, legal challenges affecting parts of the inclusion landscape have created uncertainty for some programmes and organisations.

The Year Ahead for Charities

The latest Charity Digital Skills Report sends a clear message: charities are embracing digital tools and AI, but they need sustainable funding, stronger digital skills, and continued support to ensure that innovation benefits organisations of all sizes—not just those with the greatest resources. 

As the sector moves forward, collaboration between charities, funders, technology providers, and support organisations will be essential to ensure that charities can continue delivering impact for the communities they serve.

Photo by Chris Linnett on Unsplash

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