Voluntary sector income can be broken down and analysed in different ways. There are two main types of voluntary sector income: earned and voluntary. These income types come from five main sources: individuals, government, voluntary sector, private sector and the National Lottery.
In addition, there is income from investments (the proceeds generated from investments and cash balances). The following table explains these different types and sources in more detail, including up to date figures for each.
Types of income
Earned income accounts for over half of the sector’s income
- Earned income accounts for 54% of total income, similar to last year (55%). This proportion has hardly varied over the last six years, after a sustained period where it increased; earned income overtook voluntary income as the sector’s biggest type of income in 2003/04.
- In 2014/15, earned income increased again by £0.7bn , to £24.8bn. This followed previous increases between 2011/12 and 2012/13, and 2012/13 and 2013/14.
- The level of voluntary income (including donations and grants from individuals, government and other sources) also increased in 2014/15, from £17.1bn to £17.5bn, although the increase was smaller than the previous year voluntary income has experienced more year-to-year fluctuations than earned income, and is still below its previous peak value in 2007/08 (£18bn).
Sources of income
- The sector receives nearly four-fifths (79%) of its funding from individuals and government.
- Income from individuals remains the sector’s main income source, providing £20.6bn in 2014/15 (45% of total income) via donations and purchases. Contracts and grants from government bodies, worth £15.2bn, generate a third of the sector’s income (34%).
- Together, statutory bodies and individuals account for over three-quarters of the voluntary sector’s income (79%), the same as in 2013/14.
- Whilst the majority of voluntary sector funding comes from individuals and government, 21% comes from other sources, including the voluntary sector (9%), investments (7%), the private sector (4%) and the National Lottery (1%).
Most sources of income increased between 2013/14 and 2014/15 except for private sector, which fell slightly
- Voluntary sector income (from foundations) grew from £3.5bn to £4.0bn
- Private sector income fell back from £2.3bn to £1.9bn having increased from £1.8bn in 2012/13.
- Income from the voluntary and private sector is received in the form of both voluntary income (grants and donations) and earned income (contracts and fees). The decrease in private sector income between 2013/14 and 2014/15 was mainly in private sector donations, which decreased by £320m after reaching a 5 year high of £1.4bn in the previous financial year.
- Voluntary income in the form of grants also accounts for the majority of growth in voluntary income since 2013/14 with grants increasing from £2.6bn to £3.0bn compared to a rise in contracts and fees from £0.9bn to £1.0bn.
Income by size
Income sources vary by size of organisation
- Despite variation by size of organisation in the proportion of income received from different sources, income from individuals provides the largest proportion of income for every size band.
- Major organisations continue to have the smallest share of income from individuals (43%) whilst micro and small organisations have the largest share (59%). This pattern is reversed for income received from government bodies, with major organisations receiving the largest share of income from government (42%), and small and micro organisations the smallest share (16%).
- Investment income forms the highest proportion of income for micro and small charities (14%), and the smallest proportion for major charities (5%). The reverse pattern is seen in income from the private sector.
- Income from the voluntary sector for the income bands made up between 6% and 15% of total income whilst National Lottery income comprised between 0.4% and 1.9% of total income. There was a less clear pattern in how these percentages varied by size of organisation.
- Income from the private sector constituted between 2% and 5% of total income for the different size bands.