What is the state of the sector's finances?


  • In 2020/21, the sector’s total income reached £56.9bn, 6% lower than the previous year when inflation is taken into account. The public continued to be the largest income source, making up £26.4bn or 47% of the voluntary sector’s total income.
  • Total spending stands at £53.8bn. The vast majority of the sector’s spending (£36.9bn) goes towards charitable activities (69%), followed by £9.6bn in grants (18%) and £6.5bn in activities for raising funds (12%).
  • The sector’s total spending in 2020/21 was equivalent to 95% of its total income. This is a lower proportion than 97% in 2019/20. This decreased spending could perhaps be explained by the effects of the covid-19 pandemic when many charities had to close down operations and/or resorted to online activities over in-person activities. 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.

The sector’s total income was £56.9bn and compared to £53.8bn in spending

Over time

  • Compared to the previous year, income dipped by 6% or £3.6bn and similarly, spending decreased by 8% or £4.9bn.
  • After initial fast growth in the early 2000s, income and spending plateaued from about 2007/08 and started growing again in 2012/13. However, the rate of increase slowed over time, with a reversal of this pattern in 2020/21, when both spending and income declined.

Income and spending have grown since 2000/01 but the rate of growth slowed in recent years, with a dip in both income and spending during 2020/21, the year of the pandemic

Income by size

  • After adjusting spend in previous years for inflation (2020/21), combined income fell for charities of all sizes. There was a faster rate of decline for micro, small and medium-sized organisations (organisations with income under £1m) at 11% than for large, major and super-major organisations (income over £1m) at 6%.
  • A majority (83%) of the sector’s income is generated by large, major and super-major voluntary organisations (income over £1m). From 2007/08 to 2020/21, their income has grown by 20% from £39.2bn to £47.3bn, although recent declines mean it is now back at 2017/18 levels.
  • Micro and small organisations make up 3.6% of the sector’s total income. Their income fell from £3.1bn in 2007/08 to £2bn in 2020/21 (a rate of decline of 35%). For medium organisations, their total income fell from £9.5bn to £7.5bn (a 20% decline) 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.

Even though the number of all but micro organisations has declined in 2020/21, over the longer term, larger organisations have received an increasing amount and share of the sector’s total income, while in 2020/21 income of smaller organisations is shrinking at a much faster rate

Spending by size

  • Major and super-major organisations (income over £10m) are responsible for over half (55% or £29.5bn) of the sector’s annual expenditure.
  • Large organisations – those with an annual income of between £1m and £10m – make up £14.8bn or 28% of the sector’s spending.
  • Micro, small, and medium-sized organisations (income under £1m) jointly make up the remaining 18% (£9.5bn).
  • On average, organisations of all sizes mostly spent on the direct delivery of charitable activities – ranging from:
    • 93% for micro
    • 69% for small organisations
    • 76% for medium ones
    • and around two in three large, major and super-major organisations.
  • Micro organisations spent the majority of their income on charitable activities in 2020/21. Small organisations spent a higher proportion on governance than other organisations. Major and super-major organisations spent a higher share on activities for raising funds compared with smaller organisations.

Major and super-major organisations are responsible for over half the sector’s expenditure, similar to their share of income

Proportion of organisations with zero income and spending

  • About 15,000 organisations reported having zero income in 2020/21, all of which were micro organisations (income below £10,000). This accounts for 9% of the whole voluntary sector.
  • Similarly, approximately 16,000 organisations reported having zero expenditure, almost all of which were micro organisations (income below £10,000). This accounted for 10% of all voluntary organisations.
  • About 24,000 organisations or 15% of all voluntary organisations reported having zero assets.

Almost one in ten voluntary organisations reported zero income

More data and research

This page was last reviewed for accuracy on 12 October 2023