Editorial: Trend is worrying for smaller charities

The new edition of Charity Trends from the Charities Aid Foundation contains the usual wealth of information about the top 500 fundraising charities and the top 500 grant-making trusts, along with useful data on corporate and tax-efficient giving.

Stephen Cook
Stephen Cook

There are hours of delight here for those who like facts and statistics. But there are also three new elements in the 2007 edition that give it even greater significance than usual.

The first is that CAF and CaritasData, which produces the raw information, have decided to align what they do with the accounting categories of the Charity Commission's Statement of Recommended Practice 2005. Public grants not specified for the provision of a particular service are therefore now classed as voluntary rather than non-voluntary donations, and one result is that arts charities jump from fifth to second in the league table of voluntary income. 'Events and appeals' and 'shop-donated goods' move in the other direction, from the voluntary to the non- voluntary category. Some comparability with the past is lost, but a new standard is established for the future.

The second change is the addition of 15 short commentaries from sector luminaries and commentators, whose contributions add some welcome perspective. CAF's Russell Prior, for example, argues that although simple business philanthropy is declining, the rise of strategic giving by companies is a positive sign for charities. We report the concerns of two other commentators in our story on page three.

The third change is the inclusion in the report of data about the second 500 fundraising charities, with incomes ranging from £1.95m to £713,000. Although the premier league is doing even better than in recent years - too well, some would argue, for the overall health of the sector - there are serious concerns about what is happening in the first division. While the big-leaguers get 50 per cent of their income from voluntary sources, for example, the figure is 64 per cent for the second 500, which suggests they are failing to take advantage of public service provision, or are being squeezed out of it, as a recent report by Navca indicated.

For this and other reasons, Charity Trends sounds a note of alarm about the medium-sized charities. It points out that they stand in the shadow of the big boys and struggle to attract income from all sources. And it quite rightly argues that these are the organisations that meet local or highly specialised needs and play a vital role in creating inclusive communities and a healthy civil society.

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