Five insights about the state of the voluntary sector
The unprecedented demand for services during the pandemic and the current cost of living crisis are having a deep impact on the voluntary sector. Now more than ever, we need reliable data to understand the sector. NCVO’s Civil Society Almanac 2022 provides that critical perspective on the voluntary sector finances, volunteers and workforce.
The Almanac is the definitive publication on the state of the voluntary sector in the UK. It is used by the ONS, cited by the media and referenced by sector leaders, policy makers, journalists and academics. This year’s publication is primarily based on charity accounts for the financial year 2019/2020. This helps us to understand how prepared charities were going into the pandemic, the initial impact as the country went into the first lockdown, and what state they might be in going into the cost of living crisis.
1. The number of voluntary organisations increased as did the sector’s workforce and total income.
There are 165,758 voluntary organisations in the UK (2019/20), an increase on the previous year. The voluntary sector has a workforce which is almost a million strong (950,000 workers) - about two-thirds the size of the NHS workforce - and has grown by more than a quarter (27%) in the past decade.
The sector’s total income in 2019/20 was £58.7bn. The sector spent 97% (£56.9bn) of its income, with most of the spending (71%) going towards delivering charitable activities. The remaining amount is spent on grants (15%, £8.8bn) and on fundraising activities (13%, £7.7bn). Compared to the previous year, the cost of charitable activities rose by 3%, while fundraising activities fell by 6% and grants rose by 13%.
The percentage of GDP that the voluntary sector contributes to the UK economy has been relatively stable since 2016/17, although it is fractionally lower than last year.
2. The combined effects of the pandemic and the cost of living crisis are likely to impact the sector as a whole but leave smaller charities particularly vulnerable.
Out of a total of 165,758 voluntary organisations in UK, the majority (80%) are small. However the number of charities with income below £100,000 are declining, and the overall number of newly-registered charities is also falling. For example, charity registrations were almost 6,000 in pre-pandemic 2019, compared to almost 4,000 in 2021.
Charity closures during the pandemic were lower than predicted, though the number of newly-registered charities fell below average in 2021. However, charity closures particularly impact communities in areas that may already have fewer charity services. For example, those in north-east England are more likely to feel a direct impact of charities closing as there are only 1.6 organisations per 1,000 people, compared to twice that in the south-west of the country.
3. For the first time in 20 years, income from the public contributes half (51%) of all voluntary sector income, while income from government continues to decline.
With wages not rising in line with inflation and inflation expected to peak at its highest rate in 40 years1 by the end of 2022, income from the public is at risk of decreasing at a time when the sector is majority-funded by the generosity of the public. Smaller organisations, dependent on the public for more than half their income (58%), will likely be worse affected.
Income from both central and local government, which make up a quarter (26%) of all sector income, has declined by 3% and 9% respectively from the previous year. This particularly effects larger charities with over £1m income, who depend primarily (87%) on government income. Government spending cuts2 have already resulted in charities closing vital programmes.
Income from grants and government contracts has also declined. Contracts made up the majority (82%) of all income from government almost a decade ago in 2010/11, but have now dried up to less than a quarter (23%) in 2019/20.
4. Volunteer retention for older and socio-economically disadvantaged groups has become challenging.
One in three older people (65-74 age group) volunteered formally at least once a year, higher than any other age group. But the number of over 65s who volunteered formally at least once a month, decreased (31%) during the pandemic. Possible factors include socially isolating for health reasons and digital exclusion from online volunteering that became common during the pandemic. Another concern is that with 2 million3 older households unable to cover essential spending because of rising costs, older volunteer numbers may fall further.
Public transport and fuel costs can be a deterrent for those from poorer backgrounds. This affects volunteers from deprived areas who are already 50% less likely to volunteer than those from least deprived areas.
5. The diversity of the sector’s workforce remains low and but is higher among volunteers, while young people are still least likely to be involved in the sector.
The voluntary sector workforce is mostly (90%) White. In the past 10 years, there has been a slight increase (2%) of minority ethnic groups in the workforce. Ethnic diversity in the voluntary sector workforce (10%) is lower than in both the public sector (14%) and private sector (13%).
While minority ethnic volunteer numbers tend to be lower, those identifying as Black are an exception and (23%) are the most likely group to volunteer at least once a month, higher than those identifying as White (18%), Asian (14%) or from mixed groups (15%).
Women and older people are well-represented in the charity sector, both in volunteering and workforce. 1 in 3 over 65s and 1 in 3 women volunteered at least once a year. Women make up two-thirds of the voluntary sector workforce. The voluntary sector has the oldest workforce compared to the public and private sectors, with one in four staff aged 55 and above.
Young people (25-34 age group) are the least represented (12%) in formal volunteering. But informal volunteering by young people rose during the pandemic from 24% to 31%. Part of it may be that large numbers of older people were shielding during the pandemic. A bigger part perhaps may have been the increased reliance on digital literacy, which younger generations found easier to support and engage with, during the pandemic. As charities are relying more and more on digital forms of communication, engagement and volunteering, older people who are not as digitally savvy, may find themselves left out.
Disabled people (19%) are as likely as non-disabled people to formally volunteer. Their numbers (23%) are also growing, with 1 in 5 employees identifying as disabled.
What next for data and evidence on the charity and voluntary sector?
- We need high-quality data and evidence to continue supporting charities through the cost of living and energy crises.
- We will know more about the direct impact of the pandemic on the voluntary sector finances in the 2023 Almanac as that will cover Charity Commission financial accounts from 2020-21.
- We need to understand volunteering trends, changing volunteer demographics and frequency of volunteering to support campaigning on how volunteers can be better supported practically with fuel costs and cost of living.