Income in the charity sector has grown despite difficulties in attracting money from the public and from government, according to the latest figures from the National Council for Voluntary Organisations.
The NCVO’s latest Civil Society Alamanac, published today, shows that total income for the 2016/17 financial year went up by 2 per cent from the previous year, to £50.6bn.
But it was increases in grants income – rising by £588.8m – and investment income – up by £602.6m – that helped to mask difficulties in attracting further income from the government and the general public.
The public accounted for 45 per cent of all charitable income at £22.9bn, but there was a fall in earned income from the public and donations reduced by 2 per cent.
Income from the government remained static at £15.8bn, but growth in other types of revenue meant it fell as a proportion of overall sector income to 31 per cent, which is the lowest level since 2000/01, the NCVO said.
The almanac’s findings support recent data from Third Sector’s own research based on the top 155 charity brands’ accounts, which showed there was an increase in income of almost £300m, to £11.7bn.
But Third Sector’s data revealed that fundraised income fell from £5.1bn to £4.8bn, despite an increase of £100m in income from legacies, to £1.6bn. A total of £1.3bn was spent on fundraising, compared with £1.6bn the year before.
The almanac shows that spending on grants rose by 5 per cent to a record high of £7bn, with 57 per cent of that money staying in the charity sector.
Net assets in the charity sector grew by 4 per cent to £131.2bn, also a new record high.
The charity sector contributed £17.1bn to the UK economy in 2016/17, the almanac shows, which was equivalent to the gross domestic product of Honduras.
The sector employed 865,916 people, a slight fall from 2015/16. The almanac shows that 67 per cent of employees were women.
Sixty-eight per cent of all the charity sector’s assets were in London, the almanac reveals.
Karl Wilding, director of public policy at the NCVO, said: "The sector's income as a whole is still growing, which is positive, but it’s at a slower rate than we’ve seen recently. And it’s important to note the factors driving growth – assets and legacy income – are things small charities are less likely to have access to."
Wilding, who will succeed Sir Stuart Etherington as chief executive of the NCVO in September, said grant-makers should be alive to the greater threats faced by smaller charities and look at ways they can mitigate the effect on that part of the charity sector.
"The drop in public income reflects other findings we’ve seen and anecdotal evidence," he said. "Clearly, lots of organisations were adapting their fundraising strategies at this point in time, preparing to meet higher data-protection standards and doing a lot of internal work rather than launching donor-recruitment campaigns.
"I’m hopeful that refocusing on the right sort of engagement with supporters will pay off in the long run."