No doubt you’ll be pleased to hear that sector income hit an all-time high in 2017/18, with charities recording a combined total of £77.5 billion; that’s £21.5 billion higher than Tesco, about the same as the Legal and General Group, but sadly, nowhere near Shell - the UK’s highest earning company in 2017. Still, it is a very respectable amount and 5.8% up on the previous year. Quite the achievement, Brexit forecasts considered!
What’s really interesting though, is what these figures tell us about the sector as a whole. 5.8% might sound like a lot, but still isn’t as high as the growth we saw between 2009-2015. If the 9.6% peak in 2013/14 was Ben Nevis, then this is a walk in Lake District. Furthermore, looking behind these numbers, we can see that most of this growth (68.5%) is linked to Major and Super-Major Charities. This means that larger charities are driving sector growth, with this last year seeing 19 organisations cross the £50+ million threshold. Counting 191 charities in total, together they represent just 0.1% of the sector. Yet they bring in more than a third of its income. So bigger charities are getting bigger. The smaller ones? Well, they’re staying the same.
Whichever category your organisation falls into, ‘charitable activities’ continues to be the sector’s biggest source of income (the money earned through service provision and contracts). But as a percentage, levels are falling – most likely due to cuts in government funding. Voluntary income (donations, legacies, gift aid etc.) comes second, but whilst the total value is rising, percentages have stayed reasonably consistent. Then we come to trading, investment and ‘other’, all of which help make up the difference. But will it be enough to meet future demand?
At Access, we believe the story told by this year’s Charity Spotlight is one of a sector that has stayed strong in spite of unpredictable economic circumstances. No, growth is not as high as it has been, but numbers are going up. Not only do we have more Major charities than ever before, the last 10 years have seen 2,000 more charities log an income that tips the £1 million mark. But as bigger charities get bigger, we must take care not to overlook those at the other end of the spectrum. Last year 112,662 charities recorded an income below £100k. That’s 71% of respondents. They might be small, but these local charities are often the ‘glue’ that holds communities together. As we look to 2020 we must be careful it doesn’t become unstuck.