The National Council for Voluntary Organisations (NCVO) has dipped into its reserves to cover a “larger than planned” financial deficit of £718,000.

The sector body’s trustees chose to meet the deficit through its reserves to “ensure continued service delivery” and amid a slowing down of membership growth post Covid pandemic and during the cost-of-living crisis.

The deficit has emerged amid a membership boost of 4%, which is down on the previous year’s growth figures, according to its annual report and accounts for the year ending March 2022.

It now has 17,102 members, two thirds of which are community members with an income under £30,000 who are entitled to free membership.

Just under 5,800 are paying members, while it attracted 1,492 new members, 849 organisations saw their membership lapse over the year.

“Despite reaching the milestone of 17,000+ members, membership growth slowed compared to the previous year, which saw extraordinarily fast growth as organisations turned to NCVO for support during the earlier stages of the Covid-19 pandemic,” said the sector body.

“NCVO’s membership retention rate also dropped by 10% in 2021/22. This drop reflects the impact of the second year of the Covid-19 crisis on voluntary organisations across the sector - with NCVO seeing erratic changes in the income of members, escalated sudden resignations, and an increased number of organisations reporting that their reason for leaving NCVO membership was that they were closing due to the effects of the pandemic.”

NCVO chair Priya Singh said: “We began to see the true impact of the pandemic on NCVO members in 2021 and 2022.

“While fears of mass closures across the sector have thankfully not as yet materialised, we sadly saw more members closing their doors during the last year - meaning vital services were lost for people and communities.”

NCVO’s annual report and account also show that the NCVO had a total income of £5.4million, down on 2021’s figure of £7.5million in 20/21. Its expenditure is also down from £7.4m in 2020/21 to £6.3million over the last year.

The sector body is forecasting it will break even for 2022/23 with anticipated growth in its conference, training and membership income.

“NCVO’s experience certainly mirrors that of our members and the wider sector, with a much more challenging year financially compared to the year before,” Singh added.

“Despite this financial picture we believed that making the choice to use our reserves to maintain our services for the voluntary sector while we rebuild our income streams - such as income from our conferencing and events suit - was vital and again reflected the challenging decisions being made across our sector during this 2021 and 2022.”

Share Story: