Charities’ recession recovery complete, shows NCVO Almanac

By agency reporter
May 10, 2018

Charities have restored their finances to pre-2008 levels, new data released by the National Council for Voluntary Organisations (NCVO) shows.

The sector’s total net assets – assets minus liabilities – hit £120.5 billion in 2007/8, before crashing to £94.4 billion in 2008/9. It took seven years for them to recover, with new analysis showing they surpassed their previous high by reaching £121.3 billion in 2015/16. ( All figures adjusted to 2015/16 terms.) But NCVO cautioned the data suggests smaller charities have not managed to recover the value of their assets to the same extent as the sector on average.

The figures are contained in this year’s edition of NCVO’s UK Civil Society Almanac, the authoritative resource for information on the charity sector’s finances.

The sector’s income returned to above 2007/8 levels in 2013/14 and has continued to grow since then, reaching a new high of £47.8 billion in 2015/16, a four per cent increase on the previous year.

Government income

However, income from government sources fell back slightly, declining by one per cent to £15.3 billon this year, the same as its level two years prior. Government income to the voluntary sector has historically tracked government spending as a whole, and as 2015 saw the start of a spending review period with significant cuts in departmental spending planned, the following years may also turn out to have seen declines in government income.

Fundraising

The 2015/16 period covers the time of heightened concern about fundraising methods. The figures show that income from the public grew during this period, although in line with the longer-term trend, the growth was seen predominantly in earned income – payments for goods and services, such as membership fees or charity shop sales, rather than donations. Donations from the public showed a slight growth of one per cent to £7.8 billion, while earned income from the public continued to show strong growth, increasing by eight per cent to £11.4 billion.

Sir Stuart Etherington, chief executive of NCVO, said, "We can and should celebrate the fact that the UK voluntary sector continued to grow, doing more than ever for the people and causes it works for. But I know that aggregate numbers can disguise a great deal of variation in experience on the ground.

"While some charities are going from strength to strength, others, smaller charities in particular, are struggling with the ongoing local government spending squeeze, or being pushed out of an increasingly competitive public services market.

"Income from the public was strong in the year under examination, but many have suggested that the transition to a longer-term approach to fundraising methods and the impact of changes to data law could mean future fundraising returns will be lower in the short term.

"The sector as a whole may have recovered from the impact of the recession, but there is clearly no shortage of risks out there for charities. The solutions, as ever, all come back to ensuring organisations have the strong governance needed to help them manage risks and to ensure they grasp opportunities."

* Access the UK Civil Society Almanac 2018 here

* National Council for Voluntary Organisations https://www.ncvo.org.uk/

[Ekk/6]

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