Small charities struggling while their larger counterparts grow, NCVO figures show

The UK Civil Society Almanac 2016 shows overall charity sector income rose by 5.8 per cent in 2013/14 to reach £43.8bn, the first increase since 2009/10

Income among small and medium-sized charities fell in 2013/14 despite an overall increase in income across the voluntary sector, according to the National Council for Voluntary OrganisationsUK Civil Society Almanac 2016.

The publication, produced each year by the NCVO and based on its analysis of charities’ accounts as submitted to the Charity Commission, shows that overall charity sector income rose by 5.8 per cent in 2013/14 to reach £43.8bn.

Spending also increased by 3.5 per cent to reach £41.7bn, which is the first time income and spending has risen since 2009/10, the almanac says.

But in a statement the NCVO said that medium-sized charities with incomes of between £100,000 and £1m reported a combined 0.7 per cent fall in income, with small charities (annual incomes of between £10,000 to £100,000) and micro charities (below £10,000) experiencing falls in income of 1.7 per cent and 3.6 per cent respectively.

In contrast, "super-major charities", defined by the NCVO as having incomes of more than £100m a year, reported a 26 per cent increase in income, the NCVO found, due in part to a rise in the number of such charities from 33 in 2012/13 to 40 a year later.

The almanac, published today, says the sector’s economy is dominated by charities with annual incomes of more than £1m, with super-major charities having 18.4 per cent of all charitable income despite making up only 0.02 per cent of registered UK charities.

Major charities, or those with annual incomes of between £10m and £100m, made up 0.4 per cent of the sector but had 31.9 per cent of income, and large charities, defined by having incomes of between £1m and £10m a year, had 29.4 per cent of income despite representing 2.8 per cent of charities, the almanac says.

It says that medium-sized charities accounted for 13.6 per cent of all charities and had 15.5 per cent of voluntary sector income.

But small charities had 4.4 per cent of total income, despite accounting for 33.4 per cent of all charities, and micro-charities – 49.8 per cent of the sector – had only 0.5 per cent of total income.

Government funding for charities increased slightly over the year, but is still much lower than pre-2008 levels and the almanac says the "longer-term trend is downwards". All sources of charitable income, except that from the National Lottery, increased in 2013/14, the almanac says.

The almanac says 27 per cent of the UK population volunteer at least once a month, equivalent to 14.2 million people, with 41 per cent doing so at least once a year and 44 per cent of adults giving money to charitable causes.

The proportion of young people who volunteer continues to grow, from 45 per cent volunteering at least once a year in 2013/14 to 47 per cent in 2014/15, the almanac says.

It adds that 35 per cent of young people volunteer once a month, up from 31 per cent in 2013/14.

Charities registered in seven London boroughs – Islington, Westminster, Camden, City of London, Lambeth, Southwark and Hackney – account for 6 per cent of all charities and 32 per cent of all income for the sector.

Sir Stuart Etherington, chief executive of the NCVO, said this year’s data showed that about one-third of charities with a annual incomes of less than £1m reported having no reserves at all, "making them especially vulnerable to external shocks".

He said he would like to see more done "to ensure that smaller, specialist charities can bring their expertise to public services".

He said: "The problem is not larger charities winning contracts at the expense of smaller charities, but that public service procurement is done in such a way that only large charities could win these contracts to begin with."

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