NCVO almanac: Charity sector income reaches new high, but small charities lag behind

Charity sector income has surged to a new high of over £47bn, pushing through its recession recovery period, the NCVO almanac has shown.

The sector’s total assets crashed significantly in 2008/9, from £120.5bn down to £94.4bn, as a result of the global recession.

However, following a seven-year recovery period, the sector has continued to reach new highs. The sector’s income returned to above 2007/8 levels in 2013/14 and continued to grow since then, reaching a high of £47.8bn in 2015/16 – a 4 per cent increase on the previous year.

Despite the positive increase in income generally, the NCVO has cautioned the data suggests smaller charities have not managed to recover the value of their assets to the same extent as the sector on average.

The figures, which are contained in this year’s edition of NCVO’s UK Civil Society Almanac, also reveal income from government sources has fallen back slightly, declining 1 per cent to £15.3bn in this year, the same as its level two years before.

Government income to the voluntary sector has historically tracked government spending as a whole, and as 2015 saw the start of a spending review period with significant cuts in departmental spending planned, the following years may also turn out to have seen declines in government income.

However, the figures show that income from the public grew during this period, although in line with the longer-term trend, the growth was seen predominantly in earned income – payments for goods and services, such as membership fees or charity shop sales, rather than donations.

Donations from the public showed a growth of 1 per cent, to £7.8bn, while earned income from the public continued to show strong growth, increasing by 8 per cent, to £11.4bn.

“We can and should celebrate the fact that the UK voluntary sector continued to grow, doing more than ever for the people and causes it works for. But I know that aggregate numbers can disguise a great deal of variation in experience on the ground,” NCVO chief executive Sir Stuart Etherington said.

“While some charities are going from strength to strength, others, smaller charities in particular, are struggling with the ongoing local government spending squeeze, or being pushed out of an increasingly competitive public services market.

“Income from the public was strong in the year under examination, but many have suggested that the transition to a longer-term approach to fundraising methods and the impact of changes to data law could mean future fundraising returns will be lower in the short term.

“The sector as a whole may have recovered from the impact of the recession, but there is clearly no shortage of risks out there for charities. The solutions, as ever, all come back to ensuring organisations have the strong governance needed to help them manage risks and to ensure they grasp opportunities."

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