This year brought two Budgets – one in the spring and one after the general election – an autumn statement and a spending review, all of which had mixed news for charities. In the spring Budget, the coalition government extended the limit for claims made under the Gift Aid Small Donations Scheme from £5,000 to £8,000 a year from April 2016, and extended VAT exemptions to blood bike charities.
After the election, the new Conservative government’s summer Budget included the announcement of a "living wage", to be introduced from April 2016, which prompted fears of further financial strain on charities, especially on those in the care sector.
In the spending review in November, the government announced that it would freeze the budget of the Charity Commission for the next four years and would not make any cuts to the share that the Big Lottery Fund receives from the National Lottery, contrary to rumours. Charities remained concerned about possible changes to business rate relief after the government put back the expected results of its review of the current regime until the 2016 Budget.
Access: The Foundation for Social Investment became operational in March 2015, hiring Seb Elsworth as its first chief executive. Access will support capacity-building initiatives to help charities and social enterprises access social investment. It will also provide finance to the sector.
In March, a report by the Charity Commission found that a third of charities’ annual accounts were of unacceptable quality, based on a random sample of 107 charities’ most recent accounts. Further research by the regulator published in November found that a large number of charities were overstating the level of their governance costs. The most common mistake, according to the commission, was to equate governance costs with general management and administration costs.
In the spring, the Charities Aid Foundation released its UK Giving 2014 study, which said that charitable giving by adults was worth £10.6bn, £200m less than the previous year. The decline was atttributed to the adoption of new research methodology. The amount of money held by the UK’s 5,000 largest charities rose by 6 per cent to £17.4bn during their most recent financial years, according to the data provider Charity Financials.
But the National Council for Voluntary Organisations had a bleak forecast for the charity sector in July’s A Financial Sustainability Review. It predicted a £4.6bn annual shortfall in charity finances by 2018/19. The NCVO’s UK Civil Society Almanac also highlighted a £1.7bn real-terms reduction in the voluntary sector’s income from government grants and contracts.
The year ended with the news that charities could be in line to receive hundreds of millions of pounds from a Cabinet Office scheme to unlock dormant assets such as stocks and shares and direct the money towards good causes.
The Dormant Assets Commission will be tasked with unlocking UK assets that have been untouched for more than 15 years. It will identify new pools of such assets, which could include stocks, shares, pensions and bonds. The government estimated they could be worth more than £1bn.