The income of the UK’s top 500 organisations grew by 8.6% in the last year, compared to just 3.8% the year before, according to the CAF Charity Trends 2007 report.

Eight per cent more was spent on fundraising this year, and donations, grants and gifts in kind represent the largest percentage of income for top 500 charities (38%). Fees for goods and services comes in at a close second (34%).

The largest 100 charities have absorbed two thirds of all income to the group. Smaller charities outside the top 500 are found to be a third more reliant on voluntary income than those at the top of the pile.

Involvement from the top 500 corporate companies grew by around 18%. The finance sector still dominates the list of corporate givers – half of the top 10 donors were banking institutions.

“The UK’s largest charities represent a major success story in the development of the voluntary sector,” said Andrew Jones, CAF’s executive director of external affairs, on publication of the report. “Their operating efficiencies, brand strength, sustained income growth, economies of scale and lack of reliance on a single income stream ensure that they retain their positions at the top of the tables.”

Michael Lake, director general of Help the Aged, said: “We see a gradual strengthening of larger charities, but a marginalisation of those smaller organisations that have lost distinctiveness or agility, or lack the capacity to compete.”

CAF’s Jones said as the top 500 became more successful they had a responsibility towards small third sector organisations. “In short, these charities need to develop the same sense of social responsibility that we now expect from companies,” he said.

Megan Pacey, director of policy and campaigns at the Institute of Fundraising, said the figures were consistent with the fundraising trends it had picked up over the last year. “Once again this study shows that it is still continuing to grow. We have not yet reached a point of saturation,” she said. But she warned charities not to see the figures as a benchmark.

Simon Burne, senior consultant at THINK, said the increase in income from corporate partners may be due to changes to the SORP, which alter the way charities account for gifts in kind. “I still think we have to make sure that we don’t let corporates off the hook,” he added.

The new figures came as further research, carried out on behalf of CAF, found the biggest challenge for corporate foundations in the future to align their activities with their companies’ corporate social responsibility strategy in order to maximise social impact, while maintaining their independent charitable status.

Nick Monger-Godfrey, head of CSR at supermarket chain Waitrose (a participant in the study), said: “By combining the efforts of the Waitrose Foundation with our main corporate responsibility programme we are able to provide more investment for social welfare programmes to improve the lives of farm workers and their families.”