Overview

  • Voluntary organisations spent £6.4bn on raising funds in 2015/16 which represents 14% of total spending.
  • £5.9bn was spent on generating earned and voluntary income, and £0.5bn on investment management costs.

Over time

Since 2000/01, expenditure on raising funds has increased slowly, both in terms of total amount and as a proportion of total spending

Costs of raising funds, 2000/01 to 2015/16 (2015/16 prices)
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  • Over the whole period since 2000/01, spending on raising funds has increased slowly and steadily, both in terms of total amount and as a proportion of total spending.
  • The amount spent on raising funds increased by 8% in 2015/16 and by 3% in 2014/15.

By size

Super-major organisations spent the largest proportion on investment management (18%) followed by the small and micro organisations (13%)

Costs of raising funds by income band, 2015/16 (in %)
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  • In 2015/16, investment management represented on average 8% of the expenditure on raising funds.
  • Super-major organisations spent the largest proportion on investment management (18%) followed by the small and micro organisations (13%). This reflects the fact that a significant number of organisations with an income below £100,000 own a large amount of assets.

By subsector

The research, environment, health, and culture and recreation spend the most on raising funds

Costs of raising funds breakdown by sub-sector, 2015/16 (% of expenditure)
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  • Similarly to last year, research is the subsector with the highest proportion of total spending spent on raising funds (23%).
  • Almost a fifth of spending was dedicated to raising funds in the following subsectors: the environment (19%), health (18%) and culture and recreation (18%)

Interpreting the expenditure on raising funds

Despite organisations spending more on raising funds, the Almanac fundraising ratio has been stable around £4.20 over the past three years

There are different ways of considering the effectiveness of fundraising. While the spending on raising funds as a proportion of an organisation’s total spending is often used as an indicator of efficiency, it doesn’t measure return on investment. Other ratios include:

General ratio = all income/expenditure on raising funds

This ratio takes into account all income, irrespective of the source, over the total amount spent on raising funds. It is a blunt instrument that does not allow us to understand the detail of the fundraising structure of an organisation.

Voluntary income ratio and Earned income ratio look at the return on investment on activities aiming at raising donations (eg direct marketing) and activities aiming at generating earned income (eg charity shops). However, these ratios are becoming less reliable as charities tend to not differentiate expenditure for generating voluntary income and from expenditure for generating earned income.

Almanac fundraising ratio = (voluntary income + earned income from activities for raising funds)/(spending on raising funds – cost of managing investments)

This ratio takes into account all voluntary income and the earned income from activities raising funds, over the total amount spent on raising funds less the amount spent on managing investments. We believe this provides a good overall indication of fundraising performance by capturing the full range of fundraising income and costs.

Almanac fundraising ratio, 2008/09 to 2015/16
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  • Our data shows that, although spending on raising funds has increased since 2010/11, the return on investment has varied. In 2010/11, for each pound spent on generating funds (excluding investment management), almost £5 was raised, this decreased to £3.91 in 2012/13 and has been around £4.20 for the past three years.
  • Despite this slight increase in 2013/14, the fundraising ratio is still lower than in 2008/09.

Get the data

Get the data on spending, on income (to calculate the ratios) and subsectoral information

 

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UK Civil Society Almanac 2018 / The Voluntary Sector /Spending

Published: 09-05-2018 / Tagged:

https://data.ncvo.org.uk/a/almanac18/raising-funds-2015-16/