The voluntary sector could almost double its income from individual giving and increase its trading income by £1.7bn in the next decade, according to the Funding Commission, which was set up by the National Council for Voluntary Organisations last year to examine the sector's funding.
Its report, Funding the Future says charities' income has grown by £10bn in the past decade and could continue to grow significantly in the next 10 years if its 12 recommendations are followed.
A new £10m campaign, called Better Asking, could increase individual giving from £11.3bn in 2007/08 to £20bn by 2020, the report says, and charities' income from trading could rise from £8.3bn to £10bn. It also says the sector's reserves could double from their 2007/08 level of £16bn to £32bn by 2020.
The report says the future of the sector is in the balance. "Under one scenario, the pattern of public services is cut to the bone, serving fewer and fewer people," it says. "Commercial organisations take over the running of many of the services that are left.
"Civil society organisations become hopelessly overstretched and unsustainable through reductions in their funding and an unrealistic assumption that voluntary effort and income can fill the gap left by the state's withdrawal."
Under another scenario, it says, a new social contract is developed and the sector increases its income and impact. But it says the commission's 12 members, drawn from charities and umbrella bodies, are "concerned that, despite the rhetoric of the big society initiative, we are in danger of heading for the first scenario".
Fiona Ellis, chair of the commission, said: "If the government and the private sector don't make some of the investments that this report recommends, then we will be in hard times."