Welcome to the NCVO UK Civil Society Almanac 2018, the essential resource for data, trends and insights on the sector. Whatever your reasons for reaching for this publication – whether you work for a charity, in finance, or are a researcher or a civil servant – I hope you find it useful and informative.
Recovering from the financial crisis
The financial figures here are for the year 2015/16, they are adjusted for inflation and exclude some organisations with charitable status (see methodology). They paint a picture of a sector recovering from its post-crisis plateau.
The sector now numbers 166,000 charities. The sector’s total income increased by 4% to £47.8bn, with a slight fall in government income being more than offset by growth in income from the public. Spending increased by 2.6% to £46.5bn. Across the whole of the sector, 85p of each pound spent went on delivering organisations’ charitable missions, with 14p spent on fundraising, and 1p on governance costs. Between them, charities contributed £15.3bn to the country’s economy.
The sector’s assets rose above the level seen in their 2007/8 pre-financial crisis peak for the first time, while total reserves increased by 5% to £46.5bn.
Only around three percent of all voluntary organisations have an annual income of over £1m, but these larger organisations account for 81% of the sector’s total income. As ever, the Almanac is a reminder that most voluntary organisations are small and operate locally, with over four in five organisations having an annual income of under £100,000.
The public are charities’ most important source of income…
In total, nearly half the sector’s income comes from the public. Over the past few years, income from individuals has driven the increase in the sector’s total income, with that increase itself predominantly coming from earned income, such as membership fees or charity shop sales, rather than donations. Income from the public grew by £1.5bn, 7%, with £0.8 billion of this growth in earned income and £0.6 billion in donated income.
2015/16 was the year in which we saw widespread public concern about fundraising methods, culminating in a review of fundraising regulation. Despite this, donations to charities from individuals continued to increase. This is not, however, a cause for complacency. We cannot quantify the income lost to charities from those who chose not to donate because of their concerns about fundraising methods. Moreover, we do not know what contribution the high-profile stories will have made to eroding trust in charities over time. That is why it remains crucial that charities continue to demonstrate high standards in order to reinforce public trust.
…while income from government has fallen back slightly
The sector received £15.3bn of its income from the government in 2015/16, a very slight fall back to its level two years prior. Government income to the sector has historically tracked departmental spending, and this year saw the start of the period of the 2015 spending review, which set out £18bn in cuts to departmental spending by 2020. Looking at the distribution of government income, larger charities continued to fare better. This may reflect their greater ability to succeed in a commissioning environment which increasingly tends to favour organisations which can bid and deliver at scale.
Millions of us volunteer for charities
11.9 million over 16s volunteered at least once a month in 2016/17, just under one in four of us in the UK. Levels of less regular volunteering are higher, with 37% of the population giving their time at least once in the last year. Behind these figures, we are increasingly aware that the way in which people are getting involved in society is changing. People get involved in a wider range of activities, while evidence points to a new generation of volunteers who want more flexible opportunities.
The voluntary sector workforce is growing and changing
In June 2017, the voluntary sector employed over 880,000 people. This is an increase of 4% since June 2016. The voluntary sector remains heavily female dominated with only a third of the sector being male, compared to 59% in the private sector. But that seems slowly to be changing, with the proportion of men in the voluntary sector workforce increasing from 35% to 37% between June 2016 and June 2017, continuing the recent trend of small year-on-year increases.
Over 94% of employees in the sector come from the United Kingdom, 4% from another European country, including Ireland, and 3% from the rest of the world. Since June 2016, 7,800 EU nationals have left the voluntary sector, a 20% decrease in the number of employees from European countries. This reverses the long-term trend of gentle increases and returns the number of EU employees to 2014 levels.
No room for complacency
We can and should celebrate the fact that the UK voluntary sector continued to grow, doing more than ever for the people and causes it works for. But I know that aggregate numbers can disguise a great deal of variation in experience on the ground.
While some charities are going from strength to strength, others are struggling with the ongoing local government spending squeeze, or being pushed out of an increasingly competitive public services market.
Income from the public was strong in the year under examination, but many have suggested that the transition to a longer-term approach to fundraising methods and the impact of changes to data law could mean future fundraising returns will be lower in the short term.
There seems to me no shortage of risks for the sector and for the individual charities within it. But I know that if anyone can meet the challenges we face, it’s the dedicated and resourceful people I’m honoured to meet every day in this sector.
With best wishes
Sir Stuart Etherington