The 12 months that began with the Asian tsunami, one of the biggest natural disasters in recent history, was an eventful one for the sector. The introduction of an improved Compact Plus, the General Election, the appointment of a new charities minister, Make Poverty History and the Charities Bill debate all contributed to an exciting year.
Relief agencies begin 2005 confronting one of the biggest natural disasters in recent history - the south Asian tsunami. "As the scale of the disaster emerged, it left us stunned, but the real horror began the next day," says Chris Bain, director of Cafod. The Disasters Emergency Committee website receives £1m every hour from the British public. The appeal eventually raises £420m.
Shortly afterwards, charities hear that they will probably have to pay up to £1,500 a year to join the new self-regulatory body for fundraising, the Regulation of Fundraising Unit.
Britain's litigious society begins to impinge upon the sector: both the RNLI and the Scout Association report they are facing lawsuits from volunteers claiming unfair dismissal. "Obviously we are concerned because we could not function without volunteers," says Anna Wardley, press officer at the RNLI.
Charities also begin to feel the pinch of tsunami fundraising. The World Land Trust reports its worst two months ever, with virtually no donations since Christmas.
A leaked report reveals that ministers are to scale down a promise to reduce red tape for charities because civil servants can't be persuaded to change their working practices.
Home Secretary Charles Clarke announces a new, improved Compact Plus to referee disputes between the sector and government. Control of ChangeUp, the programme for voluntary sector infrastructure, is also to pass to an independent board called Capacity Builders.
David Carrington, an independent consultant, castigates sector umbrella bodies for their bitter infighting over control of the Government's ChangeUp programme ICT hub. Leading organisations within the sector have demonstrated "an intensity of mistrust and mutual lack of confidence", says his report.
Mental health charity Sane threatens to sue the Department of Health over a year-long delay in the payment of a £1m contract. Two Saneline call centres close because of a lack of funding.
The first major change to charity law in 400 years - the Charities Bill - is postponed because of the General Election. NCVO calls it "one of the most disappointing weeks for the UK charity sector for a long time".
Charities are resorting to the black market to get hold of London Marathon golden bonds, it emerges. Some organisations admit paying more than twice the official rate for bonds, which guarantee entry to the race.
Save the Children says about 80 jobs will go at its London office because of a plan to devolve decision-making to the developing world.
A Third Sector reader survey on the eve of the General Election reveals that 38 per cent of voluntary sector managers intend to vote Labour. The Lib Dems run Labour a close second with 33 per cent, while the Conservatives trail in third with 18 per cent.
In the real world, Labour stumbles home with a reduced majority. New Labour intellectual David Miliband becomes minister for communities.
Faultlines emerge between the NCVO and Acevo over how far the sector should go in running public services, expected to be a key theme in Labour's third term. NCVO warns that the sector should be valued for more than just services, while the chief executives' body commits to a more radical vision of charities taking on employment services and working in prisons.
Within days of being appointed the new charities minister, Paul Goggins faces scandal. His claims that his uncle was the inspiration for the naming of Postman Pat character Mrs Goggins, are rubbished by creator John Cunliffe.
"I simply found the name Goggins in the Westmoreland phone directory," he tells Third Sector. "I don't know anyone who is related to Paul Goggins."
Scottish public schools face the prospect of losing their charitable status. An amendment to the Charities and Trustee Investment (Scotland) Bill means that fees charged by a charity cannot be "unduly restrictive".
Fettes, Tony Blair's alma mater, which has annual fees of £21,000, would seem to be on death row.
The Charities' Tax Reform Group goes on the offensive to demand government action to reduce the sector's £500m irrecoverable VAT bill.
As the G8 leaders meet, 225,000 people march in Edinburgh to Make Poverty History. "Today will give birth to a key generation of activists," says Richard Miller, director of ActionAid. But fissures emerge over the deal hammered out for poorer countries. Kumi Naidoo, an activist for MPH, says "the people have roared, but the G8 has whispered".
Cancer Research UK is fast becoming the Tesco of the charity sector, figures from the Charities Aid Foundation reveal. The giant generates more than twice as much voluntary income as any other charity - £306m in 2003/04.
The superhero impersonators of Fathers 4 Justice are warned by the Metropolitan Police that, as security is tightened in the aftermath of 7/7, they could be shot if they target London landmarks such as Buckingham Palace again.
Make Poverty History is to reduce its involvement with celebrities as frustration over Live 8's overshadowing of the campaign boils over. "At the G8 our worst nightmares came true as far as celebrity engagement was concerned," rages one source.
More than 100 charities get more than they bargained for when In Kind Direct distributes boxes of washing powder donated by HM Revenue & Customs. The consignment contains cannabis resin confiscated by HMRC officers.
At its AGM, the Charity Commission announces that it will cut the number of inquiries it conducts, limiting them to the most serious cases.
"They take far too long and accomplish far too little," says Kenneth Dibble, legal services director at the commission.
A sadomasochist group bids to become one of the first Community Interest Companies. SM Pride says it delivers a community benefit to all UK adults interested in "alternative sexuality". Lawyer Stephen Lloyd, the man behind the Community Interest Company concept, says S&M should stay "behind closed doors".
Matthew Ashimolowo, senior pastor of evangelical church Kingsway International Christian Centre, is ordered to pay £200,000 back to the charity after one of the longest investigations in Charity Commission history, lasting two and half years. Ashimolowo was guilty of receiving "unauthorised trustee benefits", including a timeshare apartment in Florida that was bought with the charity's Visa card.
The House of Lords rejects a Charities Bill amendment, obliging the Charity Commission to take fees into account when assessing charities' public benefit. The Bill's reliance on case law to determine public benefit is certain to remain because of the Commons consensus on the issue between Labour and Tory front benches.
The London Marathon bows to pressure and introduces a silver bond scheme to run alongside the controversial golden bond scheme. Golden bond holders will give 250 places to some of the 600 charities on the waiting list.
Iain Duncan Smith, former leader of the Conservative Party, says the charity sector is threatened with 'Tescoisation' as a small group of behemoths simply overwhelms smaller rivals. "As big charity gets ever closer to big government, it increasingly mirrors its thinking and behaviour," he says.
Public trust in the sector is only moderate, according to a poll published by the Charity Commission. Charities score 6.3 out of 10 for trust and confidence, the research finds. Sixty-nine per cent of the public admit they do not know much about how charities are run.
Chancellor Gordon Brown says that money languishing in dormant bank accounts can be distributed to good causes - but only those involving young people or financial exclusion. Several hundred million pounds lie forgotten, according to the banks, but the new Commission on Unclaimed Assets reckons the figure could be closer to £5bn. The pre-Budget report also promises £100m for gap-year volunteering.
Junior Treasury minister Ivan Lewis does not share his boss's festive cheer. He tells charities to ditch the campaign for VAT reform: "It doesn't help anyone to reopen the debate," he states.
Meanwhile, within a day of being elected leader of the Conservatives, David Cameron announces an inquiry into how his party can achieve social justice. He promises policies to "help communities to turn themselves around".