Trends & data analysis

Charity sector’s daily income grows by £11 million in 2016-17

14 February 2018

A new report from Charity Financials finds that the sector generates £206 million every day, up from £195 million in 2015-16…

Charity Financials has launched the latest instalment of its flagship Charity Income Spotlight report, now in its fifth year, which analyses the financial performance of the UK’s top 5,000 charities.

The report, sponsored by Charles Stanley, shows that amid a challenging economic outlook, the charity sector is growing its income substantially every day and in the last financial year (2016-17), income of all 167,000 charities within the sector exceeded £75 billion, growing from £71 billion in 2015-16. This represents an annual growth of 5.7%, which is up slightly from 5.6% in 2015-16.

The report tracks the income of the top 5,000 charities over the past decade and finds that these charities grew their income by £18 billion to £50.6 billion in the last financial year – a 55% increase in income over 10 years. These top organisations represent just 3% of the total sector population, but generate more than two-thirds of the total income.

However, if income is adjusted according to the Consumer Price Index (base rate of 100% September 2015), for every organisation based on their individual year ends, the annual real-time increase drops from 6.8% in 2013-14 to 4.6% in 2016-17, meaning that the sector has seen just a 2.2% in income growth in four years.

The report also tracks charity income by source over the past 10 years, which shows that since 2014-15, reported government funding has fallen by more than £35 million. This suggests the sector is working hard to plug the gap with income from fundraising, investments, voluntary donations and charitable activity, which all saw a significant positive uplift over the past decade.

Other key findings of the Charity Income Spotlight report include:

  • 10 years ago, the sector generated £3 billion surplus, but in the last financial year, this fell to £0.5 billion
  • Growth of the sector is primarily from the largest organisations (those with income exceeding £10 million), which increased their income by more than 10% in 2016-17
  • Growth of the charity sector has been slowing for the past five years, however, growth did increase this year for the first time since 2013-14 – but only by 0.1%
  • Even if growth falls by 1% a year, the sector would still increase its annual income to £94 billion by 2023
  • The biggest charities generate £1.7 billion annual surplus; but the sector as whole generated just £0.5 billion annual surplus
  • Small charities are on a knife edge, struggling to stay afloat into the next financial year

To download the full report, click here.

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Alexandra Jones

is Content Manager at Wilmington Plc

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