Spending increased by £2.6bn in 2015/16
- The voluntary sector spent around 97% of its income in 2015/16. The remainder is reinvested as capital expenditure through the purchase of investments, property or by keeping it in a bank account.
- In 2015/16, the voluntary sector’s total spending was £46.5bn, which is an increase of £2.6bn from 2014/15.
- Overall, £39.5bn (85%) is spent on charities delivering on their mission with £33.1bn (71%) spent directly on carrying out charitable activities and £6.5bn (14%) on grants.
- Organisations spent £6.4bn (14%) on activities for generating funds and £0.6bn (1%) on governance.
- The decrease in governance costs from £0.9bn to £0.6bn is explained by charities adopting new accounting standards requiring governance costs to be apportioned to charitable activities.
Since 2014/15, spending on charitable activities has increased by 8%, which is partly due to change in reporting
- Since 2007/8, spending on charitable activities has remained largely stable. However, it increased by 8% between 2014/15 and 2015/16.
- Spending on grants is stable at £6.4bn and remains higher than in 2013/14, when it was £6.1bn.
- Overall spending on charitable activities, whether directly or indirectly through grants, has increased by approximately £2.5bn between 2014/15 and 2015/16, partly because more organisations are now reporting governance costs as part of charitable activities. However, this does not explain all of the increase as governance costs only amounted to £0.8bn in 2014/15.
Social services accounted for 22% of the voluntary sector’s spending but research is the subsector with the highest average spending
- Social services, culture and recreation, health and international charities continue to have the highest levels of expenditure.
- Organisations delivering social services accounted for almost a quarter of the voluntary sector’s spending (22%) in 2015/16, far more than culture and recreation organisations, the next highest subsector, that spent half as much (11%).
- Average spending by subsector is the spending divided by the number of charities in that subsector. The higher this figure the more concentrated the subsector is, with a small number of organisations sharing a large amount of money, while a low figure is an indication of a more fragmented subsector.
- In terms of average spending by subsector, research organisations (including large medical research organisations such as Cancer Research UK) rank first with an average spending per organisation of £1.1m, followed by health charities (approximately £789,000) and international NGOs (£778,000).
- Grant making organisations spent 9% of the sector’s spending. Find out more about grant making specifically on our grant making page.
Super-major organisations spend a higher proportion on grants and a lower proportion on direct charitable activities than smaller organisations
- On average voluntary organisations dedicate 14% of their spending to raising funds. Perhaps unsurprisingly, this proportion goes up to 16% for organisations with an income above £100m (super-major) and down to 9% for organisations with an income below £100,000 (micro & small).
- In 2015/16, organisations with an income above £1m reported between 0% and 1% of their spending on governance. This proportion is higher for smaller organisations (5%). However, this is likely to reflect the quicker adoption of FRS102 reporting rules by larger organisations rather than a real drop in governance spending.
- Organisations with an income below £100m spend around three in every four pounds directly on charitable activities.
- Super-major organisations, with an income above £100m, spend three in every five pounds on charitable activities.
- Super-major organisations spend 22% of their spending on grants, which is a much higher proportion than other voluntary organisations, which spend 11% on grants.
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