The sector’s net assets are worth £121.3bn
- The sector’s total gross assets (excluding pension assets) are worth £130.6bn.
- This total includes fixed assets, such as buildings and investments and current assets such as cash and stocks of unsold goods. Organisations may also have short-term liabilities, such as accounts payable, and long-term liabilities, such as loans.
- When liabilities (£19.2bn) are subtracted from total gross assets, the sector’s net total assets are worth £121.3bn.
87% of assets are held by just 3% of voluntary organisations
- The distribution of assets in the sector is uneven: large, major and super-major charities represent 3% of voluntary organisations but hold 87% of the sector’s net assets (£106bn). Whereas medium, micro and small organisations, (organisations with income equal to or less than £1m), make up 97% of the voluntary organisations and own just 13% (£16bn) of the sector’s net assets.
Larger organisations are more likely to hold fixed assets than smaller charities
- Overall 84% of the sector’s assets are fixed assets, and 16% are current assets.
- Fixed assets include tangible fixed assets (the buildings and equipment with substantial value that are owned by organisations to enable them to fulfil their mission), and investment assets (such as shareholdings or investment property), which are to generate income. Current assets consist primarily of cash at the bank, stocks of unsold goods, and monies owed to organisations.
- The proportion of fixed to current assets varies considerably by size of organisation; 84% of the assets held by larger organisations are fixed assets compared with 75% for small and medium sized charities.
Type of funds
57% of the sector’s funds are unrestricted
- Unrestricted funds are funds spent or applied at the discretion of the trustees to further any of the charity’s purposes. In contrast, funds held with particular conditions attached to how they can be used, as specified by the donor, are classed as restricted funds. Endowment funds are funds that, normally, must be invested rather than converted directly into income.
- In 2015/16, the sector received just under £70bn in unrestricted funds which was 57% of total funds available to the sector. The degree of reliance on unrestricted funds varies by income band, gradually reducing with size of organisation except for the largest super-major organisations, where the trend ceases and for which 79% of funds are unrestricted.
The net worth of the sector now stands at more than it was prior to the financial crisis
- The net worth (or net assets) of the sector has continued to recover following the losses that occurred during the financial crisis in 2008/09, when the value of assets and investments saw a sharp decrease in every sector of the UK economy.
- In 2015/16, the total net assets (£121.3bn) have now exceeded those in the pre-crisis year 2007/08 (£120.5bn).
The sector’s reserves have increased by 5% since last year
- The sector held reserves worth £53bn in 2015/16, an increase of 5% since last year.
- Between 2000/01 and 2015/16 the sector’s spending increased by 54% and total reserves decreased by 3%.
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