Where do voluntary organisations get their money from?

Overview

  • Voluntary organisations receive money in a variety of ways and from a range of sources.
  • The public remains the largest income source for the sector. In 2016/17, income from the public amounted to £22bn, representing 45% of the sector’s total income. It includes donations, legacies and income earned in a range of ways including through charity shops or membership fees.
  • The second largest income source is money from government, which makes up around a third of income (31%). This includes income gained through funding, trading and paying for contracted services.
  • Other sources of income include money from the voluntary sector (10%), investments (8%), the private sector (5%), and the National Lottery (1%)

The public remains the largest income source followed by government

Over time

  • While the public and government remained the largest income sources, the amounts received from both sources has dropped slightly. Income received from the public has fallen by £287.2m (1%) and income from government has fallen by £128.5m (1%).
  • The overall growth in income was instead driven by money from the voluntary sector and investments, which increased by 13% and 17% respectively from the previous year.
  • Although income from the private sector has grown by 16%, it remains a small income source that has been affected by volatility in the past.
  • Income from the National Lottery income has fallen by £162.5m (-23%) from a peak in 2015/16. However, this was linked to a large endowment of £150m received by the Power to Change Trust in 2015, with National Lottery funding now going back to 2014/15 levels.

Overall growth in income was driven by grants and investments, while income from the public and government plateaued

By type

  • There are three ways in which voluntary organisations can generate money. Income can be:
  • voluntary which includes donations, grants or sponsorship,
  • earned which includes income generated through contracts, membership fees or charity shops but also fundraising activities like bake sales or raffles,
  • from investments.
  • Almost half (49%) of the sector’s income is earned income followed by voluntary income making up 43%. The smallest proportion is generated through investments (8%).
  • While earned income has dropped by around 5% from last year, voluntary income has increased by 7%. This was partially caused by a fall in government contracts and a rise in government grants. However, it has become increasingly difficult to distinguish between contracts and grant funding in the financial accounts of charities.

Earned income makes up the largest type of income received by voluntary organisations

By size

  • Micro and small organisations rely on money from the public more than other organisations. In 2016/17, income from the public made up over half (59%) of micro and small organisations’ total income compared to 41–47% for other organisations.
  • Bigger organisations receive more of their income from government than other organisations. Over a third (39%) of major organisations’ income comes from government. Government income also accounts for 31% of large organisations’ and 27% of super-major organisations’ income.
  • Super-major organisations receive the highest proportion of income from the voluntary sector compared to other organisations. Income from the voluntary sector makes up 16% of super-major organisations’ total income, while this proportion is between 6% and 10% for other organisations.

Smaller organisations rely more on the public, while larger organisations receive more of their income from government

By subsector

  • Income from the public makes up the majority of total income for parent teacher associations (72%) environmental organisations (72%) and religious organisations (67%).
  • Income from government makes up almost half of total income for employment and training (49%) and social service (45%) organisations.
  • Other organisations have a more even split between income sources. For example, international organisations are most reliant on income from the public (32%), government (31%), and other voluntary organisations (28%).
  • Most voluntary organisations don’t generate much of their income through investments except for grant-making foundations. Income from investments makes up more than a third (35%) of their total income.

Parent teacher associations, environmental organisations and religious organisations are the most reliant on income from the public

More data and research

Notes and definitions

Voluntary sector income can be broken down and analysed in different ways.

  • There are two main types of voluntary sector income: earned income and voluntary income.
  • These income types come from five main sources: individuals, government, the voluntary sector, the private sector and the National Lottery.
  • In addition, there is investment income, generated from investments and cash balances.