Good year for the top 500, says Charity Trends

The year to April 2006 saw "very strong growth" for the UK's top 500 fundraising charities according to the Charities Aid Foundation analysis Charity Trends 2007, published today.

Their income grew by 8.6 per cent to £10.9bn, while the value of grants made by the top 500 grant-making trusts grew even more strongly – by 17 per cent to £3.3bn.

“The top 500 are reaping the rewards, in terms of growth and efficiency, of their efforts to develop strong brands that are moulded around the public’s altruistic needs and values,” it says.

Half the income of the top 500 was from voluntary sources, the report says. Of these sources, legacies grew by 3.2 per cent and other voluntary income by 5.4 per cent.

Popular causes

Cancer Research UK and Oxfam come first and second in the income league, as in the previous year. Direct comparisons with previous years were not possible because Charity Trends has changed its definitions of voluntary income to conform with the Charity Commission’s Statement of Recommended Practice.

But Richard Harrison, director of research at CAF, said all the previous year’s top 10 remained in the top 15 of the latest volume. One significant result of the definition change was that arts and culture charities had moved from fifth to second in the league of voluntary income by cause, he said.

‘International’ remains in first position in that league with £888m, followed by arts and culture (£630m), cancer (£557m), religious – general services (£436m), religious missionary (£334m) and children (£327m).

The top 500 and the rest

For the first time, Charity Trends has a comparison between the top 500 fundraising charities and the next 500. It shows the second group deriving a higher proportion of income – 64 per cent – from voluntary sources.

The report says: “The medium-sized charities are much more reliant on donations and grants, which make up almost half (46 per cent) of their total income, compared with just one third (31 per cent) across the larger charities.

“This reliance on voluntary income may also be partly due to the fact that smaller charities find it harder to attract government fee income – just 20 per cent of their total income comes from public service fees and contracts.”

The breakdown of spending for the top 500 shows 81 per cent is direct charitable expenditure, with nine per cent on fundraising and publicity, seven per cent on trading and one per cent on both governance and events. Of the direct charitable expenditure, 63 per cent is service provision, says the report.

A staffing analysis shows that the average number of employees in the top 500 fell from 391 to 384, although average total employee costs went up by 6.8 per cent to £8.67m.

Attitudes

The report contains a survey from earlier this year of attitudes among medium and large charities. The report says: “The results show how clearly charities are focused on developing innovative fundraising solutions in an increasingly competitive market, which to them means increasingly intimate communication with donors.

“Three-quarters believe that public belief in giving remains strong, nearly two thirds say they are having to raise funds from fewer sources, and over half that fundraising is harder than ever before, and will have to focus increasingly on the young in future.”

A survey of public attitudes in the report showed that 48 per cent think charities should make giving easier, 46 per cent want to see more efficient and ethical spending, 43 per cent felt comfortable giving online, 40 per cent feel giving should be more enjoyable and 38 per cent believe local giving is more important than national.

“Of the five points, the most significant is that almost half of people are comfortable giving online,” said Harrison. “ And among 18 to 24 year olds the figure goes up to 54 per cent.”

Corporate giving

The publication also analyses corporate, individual and tax-efficient giving to charities generally.

Giving by the top 500 UK companies grew by 3.6 per cent to £1.1 billion, although giving as a proportion of pre-tax profits fell from 0.9 per cent to 0.8 per cent.

Total giving by individuals was estimated at £8.9 billion, excluding legacies, which was roughly the same as the previous year. “Long-term trends in giving from a number of surveys show that the value of total giving is being maintained by an ever-decreasing donor base, compensated for by a rising average gift size,” says Charity Trends.

The total value of gifts to charities through Gift Aid jumped by 16.9 per cent in 2005-6, compared with 6 per cent the previous year and 15 per cent in the year before that. Payroll giving grew by 2.4 per cent.

“We can’t put our finger on what’s produced this large increase,” said Harrison. “It’s possible the sector is beginning to understand how to make the most of Gift Aid, although there is a long way to go.”

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