UK Civil Society Almanac 2018 / Income from individuals

Contents

Highlights
Definition
Overview
- Voluntary income from individuals
- Earned income from individuals
Over time
By size
By subsector
Other sources of information
Get the data
Policy commentary

Highlights

Individuals are the largest source of voluntary income, and account for almost half of the sector’s total income (£22.3bn out of £47.8bn).

Earned income from individuals accounted for a quarter of the sector’s total income and over half of total income from individuals.

Income from individuals continued to grow in 2015/16 and increased by £1.5bn.

Almost two-thirds (56%) of the growth of income from individuals was driven by a rise in earned income (+£0.8bn).

Income from individuals provides the largest proportion of income for every size of organisation and is the most important source of income for a majority of subsectors.

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Overview

Individuals are the largest source of voluntary income, and account for almost half of the sector’s total income (£22.3bn out of £47.8bn).

Voluntary income from individuals

Voluntary income from individuals (ie donations and legacies) amounted to £10.9bn, accounting for just under half (49%) of the sector’s total income from individuals.

Donations from individuals amounted to £7.8bn, representing over two-thirds (35%) of all individual income, and 16% of total income.

Legacies totalled £3.1bn, accounting for 13% of income from individuals and 6% of total income.

Earned income from individuals

Earned income from individuals amounted to £11.4bn, representing more than half (52%) of the total income generated from individuals.

Earned income from individuals accounted for almost half of the sector’s earned income (46%) and a quarter of its total income (24%).

Of the £11.4bn of earned income from individuals, £6.7bn (59%) came from charitable activities.

Sources of income from individuals, 2015/16 (% of total)

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Source: NCVO/TSRC, Charity Commission

Over time

Income from individuals continued to grow in 2015/16 and increased by £1.5bn

Income from individuals amounted to £22.3bn in 2015/16, an increase of £1.5bn (7%) over the previous year.

Earned income from individuals grew by £0.8bn, which is slightly faster than voluntary income from individuals, which grew by £0.6bn.

Since 2011/12, earned income has consistently accounted for more than 50% of total income from individuals.

Income from individuals, 2000/01 to 2015/16 (£bn, 2015/16 prices)

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Source: NCVO/TSRC, Charity Commission

By size

Income from individuals provides the largest proportion of income for every size of organisation

Income from individuals makes up almost two-thirds of the income of micro and small organisations (58%) while this proportion is smaller for larger organisations (45%-47%).

Income from individuals as a proportion of total income increased for all organisation sizes, except for small and micro and super-major organisations, between 2014/15 and 2015/2016.

Organisations of all sizes generate more earned income from individuals than voluntary income, except for super-major organisations due to the amount they receive in legacies and the fact that they generate a smaller proportion of their income from their charitable activities.

Type of voluntary income from individuals (% of total voluntary income)

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Source: NCVO/TSRC, Charity Commission

By subsector

Income from individuals is the most important source of income for a majority of subsectors

Income from individuals accounts for over half of the total income of 11 subsectors out of 18.

Some subsectors are particularly dependent on income from individuals: for instance, individuals provide 72% of the income for environmental organisations, 68% for parent teacher associations and 67% for religious organisations.

The organisations the least dependent on income from individuals are employment and training organisations (23%) umbrella organisations (28%) and organisations in the international subsector (33%).

Income from individuals as a share of total income, by sub-sector, 2015/16 (%)

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Source: NCVO/TSRC, Charity Commission

Other sources of information

CAF UK Giving 2017

This survey is a large-scale survey of individuals’ charitable giving behaviour.
The latest CAF report estimates that £9.7bn was donated to charity by adults in 2016 (compared to £9.6bn in 2015).
The proportions of people reporting giving money to charitable causes in a typical month was 33% in the last four weeks and 61% in the previous twelve months (compared to 42% and 67% in 2015).
The typical (median) monthly amount given by donors in 2016 (either donating or sponsoring) in the last four weeks was £18, while the mean donation was £40 (compared to £14 and £37 respectively in 2015).
The amount given varies with age: People aged 16-24 year give a median amount of £10 and a mean amount of £30, while those aged 65+ give £22 and £51.
Women are more likely than men to make charitable donations and the median donation from women is higher than men (£20 compared to £15). However, the mean donation from men is higher than women (£45 compared to £35).
The most popular causes for charitable giving are medical research (26%), animal welfare (25%) and children or young people (24%).

Coutts Million Pound Donors 2017

This survey focuses on donations worth £1m or more.
In 2016, 139 donors made 310 charitable donations worth £1m or more, with a total value of £1.83bn.
The number of donations decreased by 5% from 2015, but overall value increased by 4%.
There were 45 donations of £10m or more, accounting for 60% of the overall value of donations worth £1m or more. The largest single donation of £80m went to The Standard Life Foundation from Standard Life.
In 2016, higher education continues to be the top recipient subsector (£656m), followed by foundations (£559m). Together these subsectors received a total of £1.21bn of the £1.83bn, representing over two-thirds of the total value of donations worth £1m or more.

HMRC data on gift aid repayments

Gift aid repayments to charities reached £1.26bn in 2015/16 and £1.27bn in 2016/17.
HMRC estimate suggest that 70,820 charities claimed gift aid in 2015/16 and 71,990 in 2016/17, although their definition of charity goes beyond just registered charities in England and Wales. Note that the total numbers of charities and amounts claimed do not include the Gift Aid Small Donations Scheme as it represents public expenditure.

Get the data

Get the Income data here.

Policy commentary

Income from individual members of the public remains the biggest source of income for the sector, amounting to almost £22.3bn, split across earned income (£11.4bn), donations (£7.8bn) and legacies (£3.1bn).

This continues a trend that we have identified over the past years, whereby the public is the sector’s biggest and constant support. This is despite various negative media stories about charities, from how much particular chief executives are paid to the more wide-ranging fundraising controversies.

Every time a story has hit the headlines, one of the questions asked is whether donations will fall, and if the crisis will affect not just the particular organisation involved but the whole sector. Fortunately, evidence from the Charities Aid Foundation suggests that, over the longer term, crises make little difference to charitable giving. We’ve seen individual organisations recover the trust of the public following a crisis. For others, this has strengthened their resolve to support the causes that they believe in.

The stunning success of appeals following the Manchester Arena terror attack and the Grenfell Tower fire – which raised record amounts in record time – illustrate again the power of fundraising and the public’s willingness to give at a time of national tragedy.

Furthermore, a YouGov survey commissioned by the Institute of Fundraising recently found that 63% of people who give to charity have taken additional positive actions as a result of that donation. This included nearly a quarter (24%) of those who have donated becoming regular givers to charity and 16% who subsequently gave time as a volunteer. This link between giving first and then going on to do other charity-related activities is a positive and important factor to consider when looking at the level of voluntary income.

But we cannot be complacent: past performance is not necessarily a guide to the future. In fact, more recent events following the safeguarding scandals could be seen as putting these conclusions to the test.

In the immediate aftermath of the revelations, there was almost a sense of resignation across the sector that what had happened would trigger a fall in donations to charities, and Comic Relief’s ‘Sport Relief’ appeal was being approached by many as a major test of public faith into both UK charities and international aid.

Those fears about the wider impact on the charity sector appear to have been confirmed, after Sport Relief’s on-the-night appeal raised about a third less than last year. We have to double down and make sure people regain any trust they have lost, not just so they donate again but also so that they continue to participate and engage with charities in the long term. The sector is currently doing exactly that, with a number of important initiatives under way that are aimed at strengthening safeguarding and employment practices in all charities, and ensuring there is a culture of zero tolerance of sexual harassment.

It’s also worth highlighting that, although income from individuals continues to drive the increase in the sector’s income, this is made up in greater part by earned income, especially for the largest charities. So the growth in income from individuals has been driven by fees charged by charities for their services, as opposed to donations, and by the sale of things like goods in charity shops, raffle tickets, and similar.

Increasing income from individuals appears to be an attractive alternative to funding from government in the context of continuing reductions in government spending and challenges around securing contract funding. And some organisations find that charging can sometimes be a less risky form of income generation, as often they are providing bespoke services that cannot be easily replicated by other providers.

But charging for services is also not without risks. Income from fees for services is premised on the continued availability of a functioning market in such services. Yet we see more and more warning signs that public services are approaching a breaking point, particularly in areas such as prisons, hospitals, and health and social care. Charities are operating in increasingly risky public sector marketplaces that are unlikely to be sustainable in the long term.

So what our data and the wider policy context clearly tell us is clear: charities need to do as much as they can to diversify their income, building a balanced mix of donations, legacies, fees for services and other types of earned income – because no one single source alone is likely to be sufficient, and certainly cannot be taken for granted.