Charity sector 'running to stand still' as overall financial position remains static

Charity sector income and expenditure continued to flatline in 2012/13, new data published today by the National Council for Voluntary Organisations showed (1). The figures represent a continuation of the recent trend in the charity sector economy, which has plateaued at a level slightly below the peak it reached in 2007/8 after several years of rapid growth.

The sector’s total income fell by 0.2% on the previous year to £40.5bn, while total expenditure, considered the most reliable measure of activity, rose by 0.1% to £39.3bn. The figures, based on the latest authoritative data available, show that earned and voluntary income from individuals rose 1.4% to £18.8bn, while income from government, in the form of contracts and grants, fell by 3.4% to £13.3bn.

In line with the trend of recent years, total earned income rose slightly, by 0.4%, to £22.7bn. Income from investments rose 0.6%, while the value of investment assets rose slightly, from £73.5bn to £76.6bn.

All figures are in real terms.

Sir Stuart Etherington, chief executive of NCVO, said:

‘These figures suggest that the sector has been running to stand still in recent years. We hear constantly of the substantial efforts that organisations across the sector are putting in to ensure they can continue to work on behalf of their beneficiaries despite the difficult environment, rethinking business models and doing even more to involve volunteers, and these figures bear out those stories.

‘It is of some comfort to see that the dramatic fall in contracts and grants from government of 2011/12 were not repeated the following year, but we should not be surprised to see such falls again in future years.

‘The sector saw a rapid expansion in its scale in the years following the turn of the century, but has not managed to grow meaningfully since 2007/8. I believe charities and volunteering can and should continue to play a bigger role in society and we will be doing all we can to make sure that becomes a reality. The government must play its part by radically rethinking public service commissioning to ensure it works for charities of all sizes.

‘I do not think we have yet seen the long-term peak in the voluntary sector’s scale – there is better still to come, though we may face a bumpy road before we get there.’

David Kane, senior research officer at NCVO, said:

‘Inevitably, the aggregate numbers in the almanac disguise the changes experienced by individual organisations, some in real danger, others expanding rapidly. This year’s almanac shows the sector was keeping its head above water in 2012/13, but its overall financial position remains challenging. There was some let-up in the form of growing asset values, but the majority of assets cannot be readily realised by charities faced with reduced income. The trend of earned income taking the place of voluntary income continues, possibly a sign of a more transactional approach to fundraising.’

The figures are the most authoritative available on the state of the voluntary sector’s finances, and are used by the Office for National Statistics in calculating charities’ contribution to the national accounts. ONS calculations show the sector made a contribution of £12.1bn to the economy in 2012/13, measured in gross value added (GVA).

Alongside the UK Civil Society Almanac, this year NCVO has also published a detailed look at the children and young people’s voluntary sector in association with The Children’s Partnership (2).

Notes

For more information

Please contact either:

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1. The figures are published today in the UK Civil Society Almanac, which is a National Council for Voluntary Organisations/Third Sector Research Centre (TSRC) publication  

An embargoed copy is available from the link below. Almanac data is derived from a sample of around 6,000 charities’ annual accounts as submitted to the Charity Commission which is then used to draw conclusions about the sector as a whole.

The Almanac is available here

Figures refer to the 2012/2013 financial year. The data is the latest available as charities have ten months following their year-end to submit accounts to the Commission. NCVO/TSRC then digitise and analyse these accounts in order to extrapolate to the charity sector as a whole.

2. The nature of the children and young people's voluntary sector in England

The nature of the children and young people's voluntary sector in England published by NCVO.

are published today in the UK Civil Society Almanac, which is a National Council for Voluntary Organisations/Third Sector Research Centre (TSRC) publication 
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