The state of the voluntary sector

The state of the voluntary sector

The National Council for Voluntary Organisations (NCVO) issued its annual almanac last week. The headline data shows that England has over 133,000 charities within its borders and includes all bar one of the largest charities in the UK. The highest proportion of charities (18%) are active in the social services area followed by culture and recreation.

London alone accounts for over 24,000 organisations with an income of nearly £19 billion and expenditure of £18.5 billion in 2014/15.

Voluntary organisations with an annual income of £1m or more account for 80% of the sector’s total income yet make up only 3% of the total number of charities. In turn organisations with an income of £100,000 or less make up 82% of the sector in terms of the number of charities, but account for less than 5% of the total income. A similar pattern is seen with expenditure.
An estimated 14.2 million people formally volunteered at least once a month in 2015/16. This means that the rates of formal and informal volunteering are largely unchanged from the previous year.

A new and helpful development is the inclusion of a section on small charities in the Almanac. Data is limited and therefore less reliable as Charitable Commission reporting requirements are more relaxed. The Small Charities Coalition defines “small charities” as those with an income under £1m.  The vast majority of charities will attract income far less than this. However, the NCVO’s Almanac, defines ‘micro’ charities as those with an income under £10,000 and ‘small’ charities as those with an income under £100,000.

The majority of the sector continues to consist of small organisations. However, in 2013/14 there was a notable rise in the number of organisations with an income over £100m, this number slightly increased again in 2014/15.

Around half of all small charities have an income between £1 and £10,000. Overall income for these organisations totals £1.9bn and spending at £2.2bn. This may be partly because they are drawing on assets in addition to income, but may also indicate they are running a deficit. The data shows that between 70-80 % of small charities deliver services in their local area. The biggest disparity is in London, where there are far fewer smaller charities, which supports the view that local charities are more likely to be found in rural areas.  However, we know from our own data here that the overwhelming number of Community Waltham Forest are small charities with an income below £100,000.

The type of activities that small local charities are engaged in mirrors that of the overall sector with social services and culture and recreation dominating.

But what does differ is the sources of funding to undertake these activities. 70% of income for micro charities comes from individuals, with only around 8% coming from government, around two-thirds of which is from local government. Nearly 20% of their income comes from investments. Around 35% of spending for micro charities is in the form of grants, compared with a 13% average for the sector.  This indicates that there is still a heavy reliance on grant funding for the smallest of charities.

All in all, the new figures can be seen as the continuation of trends identified in previous years. The headline message is one of stability, and of a sector that is showing its resilience and ability to adapt to a new and challenging operating environment.