In addition to the main income sources (individuals and Government), voluntary organisations also receive income from other parts of the voluntary sector, the private sector, the National Lottery and from investments which account for 20% of the voluntary sector’s income. This section discusses the first three sources (see the Investment section (add link) for information about investment income). The smaller the organisations the more other sources of income become important.
- The National Lottery has raised significant sums for good causes
- Major organisations receive the most funding from the National Lottery
- The largest distributor is the Big Lottery Fund
- Income from the voluntary sector has remained stable in the last few years thanks to grants
- Voluntary income from corporates has dropped significantly
The National Lottery has raised significant sums for good causes
The National Lottery was launched in November 1994. To date it has raised over £33 billion for good causes and more than 450,000 individual grants have been made across the UK. The distribution of money to good causes is the responsibility of 12 independent bodies. In 2013/14 £1.6 billion was made available for distribution to good causes and allocated to the different distributing bodies according to a formula set by the Department for Culture, Media, and Sport – 40% for health, education, environment, and charitable causes and 20% for each of arts, sports and heritage.
Major organisations receive the most funding from the National Lottery
Evidence from voluntary organisations’ annual accounts indicates they received £472 million from Lottery distributors in 2012/13, accounting for 1.2% of the sector’s income. Lottery funding is most important to medium size organisations; they receive 2.3% of their income from this source. However, the largest share of Lottery funding almost 40% is received by major organisations although this accounts for only 0.9% of their total income.
The largest distributor is the Big Lottery Fund
In 2013/14 the Big Lottery Fund received £662 million from the National Lottery, a reduction of 15% on the previous year (£774 million). It made £670 million in grant awards to over 12,000 projects across the United Kingdom, compared to over £778 million in 2012/13. Over 90% of the funds went directly to the voluntary sector and 88% of the awards were for £10,000 or less.
Income from the voluntary sector has remained stable in the last few years thanks to grants
Voluntary organisations generate some of their income by receiving grants from other voluntary organisations and also selling services to other voluntary organisations. In 2012/13 this amounted to £3.3 billion, representing 8% of the sector’s total income. Almost three quarters (74%) of this income benefits large and major organisations and it is primarily grant income (£2.5 billion compared £0.9 billion for earned income). Income from the voluntary sector dropped significantly in 2008/09 but has remained relatively stable since then. The trend is different for the two components of voluntary sector income; whereas grant income from the voluntary sector increased in 2010/11 and has since then remained fairly constant, earned income dropped significantly in 2010/11 and has not recovered.
Voluntary income from corporates has dropped significantly
The private sector contributes to the voluntary sector’s income through corporate grants, donations, sponsorship, royalties and consultancy fees. In 2012/13 income from the private sector totalled £1.7 billion and accounted for 4% of the sector’s total income. Over half (57%) of the income generated from the private sector is earned income and since the recession, earned income from the private sector has remained stable. However, voluntary income, from donations and grants, has decreased significantly.
- National Lottery – where the money goes
- National Lottery, table of Income on page 2
- National Lottery, page 35
- Figures in voluntary organisations’ accounts are likely to differ from National Lottery figures for a number of reasons, partly because the accounts are a snapshot of one year whereas the Lottery awards may cover several years.
- Big Lottery fund 2013