What is the state of the sector's finances?

Overview

The sector spends the vast majority of its £56bn annual income on charitable activities

  • In 2018/19, the sector’s total income grew by 1% to £56bn. The public continued to be the largest income source (£27.1bn) making up 48% of voluntary organisations’ total income.
  • Total spending stands at £54.2bn, an increase of 2% on the year before. The vast majority of the sector’s spending goes towards charitable activities (85%), including the direct delivery of charitable activities (£38.4bn) and grant-making (£7.6bn).
  • The sector’s total expenditure in 2018/19 was equivalent to 97% of its total income. However, the difference between income and spending in any individual year does not necessarily imply a surplus, as some elements of income and spending are recorded in one year but “used” over a period of several years.
£56bn

The sector's total annual income

Over time

  • In 2018/19, the sector’s total income went up by £788m to £56bn.
  • Total annual income growth slowed down to 1%. In the five previous years, it had increased by 2-6% per year.
  • In 2018/19, spending grew by £1.3bn to £54.2bn, an increase of 2% on the year before. Spending grew by slightly more than income, meaning the gap between income received and spending narrowed slightly.
  • The sector spent 97% of its income in 2018/19, up from 96% the year before.

Voluntary sector income and spending have continued to grow since 2000/01, but the rate of growth has slowed

Income by size

  • In 2018/19, income decreased for micro, small and medium-sized organisations but grew for bigger organisations.
  • Over half (£30.6bn) of the sector’s income was generated by major and super-major voluntary organisations – those with an income over £10m. Their share of the sector’s income has almost continuously grown from 38% in 2000/01 to 55% in 2018/19.
  • Much of the increase in 2018/19 was concentrated in major voluntary organisations or those with an income of between £10m and £100m. This contrasts to the year before when super-major organisations (those with incomes of over £100m) drove most of the income growth.
  • The number of super-major organisations grew from 56 to 59 in 2018/19. There was an increase in the numbers of organisations of all sizes except for micro organisations with an income of up to £10,000. This appears to be the result of both a small decline in the numbers of charities over the last year, and the fact that inflation means that more charities will naturally move into the larger size categories over time. See our section on size categories.
  • The total growth in the income of super-major organisations can be explained by their increased number but also by the strategies and decisions of the organisations themselves. For example, they include organisations that received large one-off donations, such as the Aga Khan Foundation which received a donation to fund the acquisition of new buildings in London.

The number of bigger organisations has continued to grow, and they receive an increasing amount and share of the sector’s total income

Expenditure by size

  • Major and super-major organisations are responsible for over half (54%) of the sector’s annual expenditure, or £29.1bn. This is only slightly lower than their share of the sector’s income.
  • Large organisations – those with an annual income of between £1m and £10m - make up the next £15bn of spending, or 27.6% of the sector’s expenditure.
  • Micro, small, and medium-sized organisations jointly make up the remaining 19%, or just over £10bn.
  • On average, organisations of all sizes spent on average a similar proportion of their spending on direct delivery of their charitable purposes (including charitable activities and grant-making). between 84% for the larger organisations and 88% for the smaller ones. Micro, small, and medium-sized organisations spent slightly less (10%) on generating funding than larger organisations did (15%).
  • £23.3bn was spent on staff costs, an increase of 16% on the year before. This constitutes 43% of total expenditure, but it varies substantially by organisation size. Micro charities spend 46% of their expenditure on staffing, whereas super-major charities spend 31%.

Major and super-major organisations are responsible for over half the sector’s expenditure, similar to their share of income

More data and research