Financials

What is the state of the sector's finances?

In 2019/20, the sector’s total income reached £58.7bn, 3% higher than the previous year. The public continued to be the largest income source, making up £30bn or 51% of the voluntary sector’s total income.
Total spending stands at £56.9bn. The vast majority of the sector’s spending (£40.3bn) goes towards charitable activities (71%), followed by £8.8 bn in grants (15%) and £7.3bn in activities for raising funds 13%).
The sector’s total spending in 2019/20 was equivalent to 97% of its total income. However, the difference between income and spending in any individual year does not necessarily imply a surplus, as some elements of income and spending are recorded in one year but “used” over a period of several years.

Compared to the previous year, income rose by 3% or £1.8bn while spending rose by 3.5% or £1.9bn.
In the last two years, the gap between income and spending has narrowed slightly.
After initial fast growth in the early 2000s, income and spending plateaued from about 2007/08 and started growing again in 2012/13 though more recently at a slower rate on average.

In 2019/20, combined income fell slightly for micro, small and medium-sized organisations (income under £1m) and rose for large, major and super-major organisations (income over £1m).
Over four-fifths (83%) of the sector’s income is generated by large, major and super-major voluntary organisations (income over £1m). Since 2007/08 to 2019/20, their income grew by a third (34%) from £38bn to £48.8bn.
Micro and small organisations make up 4% of the sector’s total income. This fell from £3bn in 2007/08 to £2.2bn (-26%) in 2019/20. For medium organisations, their total income fell from £9.2bn to £7.7bn (-16%) during the same period.
The total growth in the income of super-major organisations can be explained by their increased number but also by the strategies and decisions of the organisations themselves. For example, they include organisations that received large one-off donations.

Major and super-major organisations (income over £10m) are responsible for over half (55% or £31.1bn) of the sector’s annual expenditure.
Large organisations – those with an annual income of between £1m and £10m — make up the £15.4bn or 27% of the sector’s spending.
Micro, small, and medium-sized organisations (income under £1m) jointly make up the remaining 18% (£10.5bn).
On average, organisations of all sizes mostly spent on the direct delivery of charitable activities — ranging from 64% for micro and small organisations to 75% for medium ones.
Micro, small, and medium-sized organisations spent a lower proportion on activities for raising funds than larger organisations. They also spent a higher share on governance costs. Micro and small organisations in particular also spent a higher percent on grants (23%).

About 15, 000 organisations reported having zero income in 2019/20. This accounts for 9% of the whole voluntary sector.
Similarly, approximately 8,600 organisations reported having zero expenditure, almost all of which were micro organisations (income below £10,000). This accounted for 13% of all voluntary organisations.
About 8,200 organisations or 3% of all voluntary organisations reported having zero assets.

Download more Almanac data
Read our research briefing on super-major organisations, exploring the trends for the largest organisations in more depth
Read the research done by TSRC at the University of Birmingham looking at income trajectories of charities over time
Take a look at a Pro Bono Economics blog on the impact of the cost of living crisis on voluntary sector organisations.