Where do voluntary organisations get their income from?

Overview

  • In 2020/21, voluntary sector income was £56.9bn, from a variety of sources.
  • The biggest source was the public, which made up £26.5bn or 47% of all income. This includes voluntary income such as donations and legacies, and income earned in different ways including trading such as charity shops and membership fees. This is a return to public donations making up less than half of income after this grew to over half for the first time since 2000/01 in 2019/20.
  • This was followed by the government with £16.8bn or 30% of income, which can include grants, public service contracts and fees for services provided by charities.
  • Other sources include the voluntary sector (£5.9bn or 10%) investment (£4.5bn or 8%), the private sector (£2.6bn or 5%) and the national lottery (£538m or 1%).

Close to half of all voluntary sector income comes from the public, followed by close to a third from the government

Over time

  • The decrease in overall income in 2020/21 has been driven by:
    • public donations (£4.4bn or a 14% decrease from 2019/20, when inflation is taken into account)
    • and investment (£817m or 15% decrease).
  • Nonetheless, income from the public, at £26.5bn is still 70% higher than the level seen in 2000/01 (£15.5bn), albeit making up just a slightly higher proportion of total income (47% up from 42%).
  • Government income peaked in 2009/10 at £18.5bn or 37% of all income. After 2010/11, the amount and proportion fell and has largely plateaued since 2015/16. This had decreased slightly in 2019/20 but has recovered in 2020/21, back up by £960m to £16.9bn (30% of all income), in line with the levels seen from 2015/16 to 2018/19.
  • Income from the voluntary sector has more than doubled from £2.5bn in 2000/01 to £5.9bn in 2020/21. This has increased by £512m (9%) since 2019/20. At 10%, the proportion of total income for this source is broadly in line with each year since 2015/16, remaining higher than 7% in 2000/2001.
  • National Lottery income has halved over the past two decades, falling from £979m in 2000/01 to £538m in 2020/21. Despite some fluctuation, the pattern has largely been one of steady decline over time.

By size

  • Micro and small organisations (those with less than £100,000 income) receive a higher income share (54%) from the public than charities of other sizes.
  • Large (over £1m), and major (over £10m) organisations receive double the proportion of income from government (from 32% to 33%) than that of micro and small organisations (15%). Combined, large and major organisations (income £1m- £100m) had the largest amount and share of income from government (£11.4bn or 33%).
  • Super-major organisations (income over £100m) received the highest proportion of income from the voluntary sector (15%) compared to 8% to 10% for charities of all other sizes.
  • Micro and small organisations also received the largest share of income from investment (20%) — four times the proportion for major and super-major organisations (5%) and more than double that of large organisations (9%).

Smaller organisations get a greater share of their income from the public

By subsector

  • Income from the public made up at least half of all income for half of subsectors. The proportion of income from the public was higher for some subsectors including:
    • environmental (66%)
    • parent-teacher associations (57%)
    • religion and grant-making foundations (each 56%).
  • Some subsectors received a far greater proportion of their income from the government. The largest being for:
    • playgroups and nurseries (50%)
    • social services and law and advocacy (each 42%)
    • development (40%), sectors that are likely to be linked to public service provision.
  • Income from the voluntary sector made up a greater proportion of international (30%) and umbrella bodies (23%), and, to a less extent, religion and culture and recreations (each 13%) and village halls and law and advocacy (12%). This suggests a combination of grant funding and services sold to the sector such as consultancy, training and room hire.
  • Investment made up a significantly larger income share for grant-making foundations (22%), research (19%) and housing (18%).

Income from the public made up at least half of all income for half of subsectors with this particularly high for parent-teacher associations and environment charities

Type of income

  • There are three ways in which voluntary organisations can generate income:
    • voluntary which includes donations, grants or sponsorship
    • earned which includes income generated through contracts, membership fees or charity shops, but also fundraising activities like bake sales or raffles
    • from investments.
  • Voluntary sector income is mostly earned (£26.4bn or 46%) and voluntary (£26bn or 46%), with investments being much smaller (£4.5bn or 8%).
  • All types of income went down compared with the previous year, other than voluntary income which was broadly stable. Earned income fell by 9% and investment fell by 15%. The decrease in investment income can largely be attributed to major and super-major organisations (64% of the decrease). Despite the overall decrease, earned income more than doubled for micro organisations from £36m to £88m.

The sector’s income is almost entirely made up of earned and voluntary income

Majority funding source

  • Income sources can also be explored by looking at the majority funding source for individual organisations. We define majority funding source as more than 50% of all income for an organisation coming from one single source.
  • Just under half (46%) of voluntary organisations rely on the public for the majority of their funding. Within this, donations from the public, and trading with the public are each the majority income source for 15% of all voluntary organisations.
  • The government is the majority source for 10% of organisations. This is much higher for large, major and super-major organisations, each of which had around three in ten receiving the majority of their income - most of which was government contracts.
  • Investment is the majority income source for 20% of all organisations, for which the highest proportion was for micro (22%), small (20%) and medium (19%).
  • 16% of voluntary organisations do not rely on any majority income source, considerably lower than 28% in 2019/20. This was by far the highest for micro-organisations (26%).

More data and research

Links and resources

This page was last reviewed for accuracy on 12 October 2023