How much do voluntary organisations get from the public?

Overview

The public accounts for almost half of voluntary organisations’ total income

  • The public accounts for almost half (45%) of voluntary organisations’ total income. In 2016/17, it remained the largest income source amounting to £22.9bn.
  • Half of the money from the public (50%) is ‘voluntary income’ in the form of donations, such as bucket collections or direct debits, and legacies – money that people give to voluntary organisations in their wills.
  • The rest comes from what we call ‘earned income’, where people get something in return. It encompasses ‘income from charitable activities’ which include fees paid for goods and services such as rent for accommodation, membership subscriptions or fees for training courses depending on the charitable purpose of the organisation, and ‘activities for raising funds’ which include sales from charity shops or admission fees for fundraising events.

Over time

  • The amount of money from the public has seen a slight dip for the first time since 2008/09. In 2016/17 it fell slightly by 1%, from £23.2bn to £22.9bn.
  • This year’s drop was due to a fall in earned income. This discontinued the recent trend where earned income from the public was growing and driving overall increases in the sector’s income. However, the income from ‘activities for raising funds’ that makes up only a small proportion of total earned income continued to grow.
  • Despite an overall drop, income from the public was up for super-major organisations (due to significant growth in legacies) and large voluntary organisations, for which income from the public grew across all types (donations, legacies, earned).

Income from the public has seen a slight dip for the first time since 2008/09

Donations and legacies

  • Donations from the public fell slightly by 2%, from £8.4bn to £8.3bn. They represent 16% of the sector’s total income. This is not the first time donations dropped, the last dip happened in 2012/13 when donations fell by 7%.
  • Legacies continued to grow and amounted to £3.1bn. Legacy income was up across organisations of all sizes, except for major organisations (£1 to £10m). Over the last five years legacies have grown by 50%.
  • The rise in legacy income might be linked to changes in financial reporting as much as a real trend: The new accounting standard requires voluntary organisations to be more specific about their legacy income, and at the same time, some voluntary organisations have increased their efforts on raising legacies. Read more in the context section.

Legacies continued to grow while donations dropped slightly

By size

  • The public are the largest income source for voluntary organisations of all sizes. Micro and small voluntary organisations receive 59% of their income from the public, while this proportion is lower for larger organisations (41%-48%).
  • Although legacy income has grown overall, micro and small voluntary organisations are least likely to receive money from the public in that way. Only 5% of money from the public was in form of legacies for these organisations, while this was 25% for super-major voluntary organisations in 2016/17.
  • The proportion of donations is fairly similar across voluntary organisations of different sizes ranging between 33% and 39%.

Micro and small organisations are least likely to receive legacy income

By subsector

  • Income from the public is the largest income source for eight out of 18 subsectors (44% of all sectors).
  • Some subsectors are particularly dependent on income from the public, including the three sectors with the highest proportion of micro and small organisations (parent-teacher associations, village halls, scout groups). Income from the public makes up more than two-thirds of the total income of environmental organisations (72%), parent-teacher associations (72%) and religious voluntary organisations (67%).
  • Voluntary organisations that are the least dependent on income from the public are umbrella bodies (30%) which have a very diversified income base, and organisations working in employment and training (29%) and law and advocacy (29%) which generate the largest share of their income from government.

The public is the largest income source for many subsectors

Putting it into context

Donations

This year, donations from the public have seen a slight drop after three years of growth. However, it’s too early to say whether this will be a continued trend. Some have been quick to link this drop with falling levels of trust in voluntary organisations.[1][2] However, other factors shouldn’t be overlooked:

  • People are being asked less. With the implementation of GDPR, voluntary organisations everywhere have done a huge amount of work to clean and update their supporters databases, with occasional or lapsed donors the supporters most likely to have been removed.
  • The way people are doing good is changing. For example, the market for ethical goods and services has grown rapidly over the last two decades and the rise of fundraising platforms and individuals asking directly for support has in some cases removed the role of voluntary organisations as an intermediary, trusted or otherwise.

Have a look at this blog for some reflection on whether fewer people are supporting charities.

Legacy income

Over the last five years, the sector has seen continuous growth in legacy income with the biggest jump in recent years. This trend can be explained by various factors.

  • At death the greatest asset is usually a home and its value dependent on the state of the market. The growth in legacy income since 2011/12 could therefore be linked to a recovering economy and increased property prices. The rise in the number of deaths may also be a contributing factor.
  • In addition, with the new financial reporting standard FRS 102 legacy income is recognised when receipt is ‘probable’ rather than the previous criteria of "virtually certain". This may have resulted in more legacy income being recognised earlier and contributed to its growth.
  • It might further be explained by some voluntary organisations changing their fundraising strategies and increasing their efforts to raise legacy income.

Earned income

In the past, the growth in the sector’s total income has been largely driven by earned income from the public, including fees for services and sale of things like goods in charity shops. In 2016/17, earned income from the public stopped growing for the first time in six years. However, the drop was due to a fall in fees for goods and services linked to the organisations’ charitable purpose, while income from activities for raising funds from the public was up.

Charging for services is not without risks for voluntary organisations. Income from fees for goods an and services is premised on the continued availability of a functioning market in such services. The amount of money that voluntary organisation can charge the public in order to access goods and services might have reached a plateau. Although it’s far too early to say whether this is a trend that will continue.

More data and research

Notes and definitions

Income from the public is split into four types:

  • Fees for services: Income earned through voluntary organisations providing charitable services – examples include tuition fees for training, micro-credit schemes, selling equipment and services.
  • Fundraising: Earned income from providing other services. Examples include the selling of goods in a charity shop.
  • Donations: Income given freely by the public, mainly charitable donations.
  • Legacies: Money that people give to voluntary organisations in their wills.