Where do voluntary organisations get their income from?

Overview

In 2021/22, the voluntary sector generated £69.1bn from various sources.

Public income

The public remains the largest contributor, providing 48% of the sector's total income. This category includes voluntary donations, legacies, and earnings from trading activities, such as charity shops and membership fees. The proportion of the income from the public was in line with 2020/21.

Government income

The second-largest source is the government, which contributed 26% of total income. This category includes government grants, contracts, and service fees. While government income remains substantial, it has declined from 30% of total income in 2020/21.

Other income

Other important income streams include:

  • voluntary sector (12%)
  • investment (9%)
  • private sector (3%)
  • National Lottery (1%).

Close to half of all voluntary sector income comes from the public, followed by around a quarter from the government.

Over time

In 2021/22, the overall income of the sector increased to £69.1bn from £63.6bn in 2020/21.

Public income

Income from the public has remained fairly stable at 48% of total income, highlighting the public's crucial role in supporting the sector.

Government income

Meanwhile, government income has decreased to 26% of total income from 30% in 2020/21. This is driven by a significant reduction in grant and contract funding.

Other income

The proportion of income from the voluntary sector remains significant at 12%, up slightly from 10% in 2020/21.

Investment income remained largely stable, at 9% of total income, similar to 2020/21 levels.

Changes in proportions

As a proportion of total income, government funding has fallen, offset by an increase in the proportion of income from the voluntary sector, and with income from the public remaining the largest source of income overall (just under a half of total income).

By size of organisation

The distribution of income varies significantly by the size of the charity.

Smaller organisations get the largest share of their income from the government in 2021/22, with a decline in public income since 2020/21. Larger organisations still rely more heavily on public support.

Micro and small organisations

  • Micro and small organisations (income under £100,000) received the largest proportion of their income (37%) from the government, up from 15% in 2020/21.
  • The public have declined as an income source to 25%, from 54% in 2020/21. Investment accounted for 27%, up from 20% in 2020/21.

Large and major organisations

  • Large and major organisations (income over £1m) received a relatively greater share of their income from the public (51%) and less from the government (27%), compared to smaller organisations.
  • This is a slight shift away from government funding (33% in 2020/21) and towards public funding (46%).

Super-major organisations

  • Super-major organisations (income over £100m) received a higher share of their income from the voluntary sector (23%) than all smaller organisations, and this was higher than in 2020/21 (15%).
  • The largest share of their income comes from the public (40%), although this lower than in 2020/21 (49%).
  • The government accounted for 28% of income, similar to 2020/21 levels (26%).

Type of income

The sector's income is composed of three primary types:

  • voluntary income (donations, grants, sponsorship)
  • earned income (through contracts, membership fees, charity shops, etc.)
  • investment income (returns on investments, rents, and deposits).

In 2021/22, voluntary and earned income were almost equally split, making up 46% and 45% of total income respectively. Investment income remained lower, at just 9% of the total. These were all largely in line with 2020/21 levels.

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

Majority funding source

Smaller voluntary organisations rely much less heavily on the public as their majority source of funding in 2021/22, with most no longer receiving their income from a majority source.

Public income

  • 15% of voluntary organisations relied on the public for the main source of their income, with donations making up the most significant proportion.
  • This figure is much higher for larger organisations with income over £1m (46%).
  • Overall, the proportion of income from the public is much lower than in 2020/21 (46%), with micro and small organisations particularly affected.

Government income

  • 3% of organisations are majority-funded by the government, but this is much higher for larger organisations with income over £1m (16%).
  • Overall, this was a smaller proportion than in 2020/21 (10%), with smaller organisations in particular seeing a decline.

No majority source

  • 62% of organisations had no majority source of income. This was highest (73%) for micro and small organisations but much lower at just 11% of large, major and super-major organisations. Overall, this is a substantial rise from 17% in 2020/21, with this rise seen most strongly among smaller organisations.

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