Income and expenditure at biggest charities 'is growing faster than inflation'

Research by Third Sector finds that the total income of 157 charities grew by 3.6% year on year and spending rose by 4.6% - inflation stands at 3%

The income and expenditure of the biggest brands in the charity sector are growing faster than the rate of inflation, research by Third Sector shows.

Analysis of the most recent accounts for 157 charities published before 1 December 2017 shows that the total income of the charities identified increased by 3.6 per cent year on year – faster than the current inflation rate of 3 per cent.

The 157 charities are taken from Third Sector’s Charity Brand Index and include most of the biggest names and fundraising charities in the sector.

The total income of the selected charities was £11.4bn in their most recent financial years, up from £11bn the year before.

Overall spending among the charities in our study also increased by 4.6 per cent, rising from £10.8bn to £11.3bn.

The mean income has risen from £70.2m to £72.7m. The median income has also increased, albeit by a smaller amount – rising from £36.6m to £37.3m.

The mean overall expenditure for the charities in our study increased from £68.6m to £71.7m, and median expenditure rose from £34.6m to £37.9m.

Spending on charitable activities by the charities in the study was £9.1bn, or about 79 per cent of total income and 81 per cent of total expenditure.

Gareth Morgan, emeritus professor of charity studies at Sheffield Hallam University and a consultant with the Kubernesis Partnership LLP, said: "Although these findings are based on 157 'big-name' charities, and trends may be very different for small and medium charities, they show some interesting results. Most of the accounts that were considered include the financial year that went across the 2016 EU referendum.

"The fact that income is up slightly ahead of inflation suggests that these larger charities are still attracting strong support from the public and/or winning an increasing share of funding available from the public sector – but one would need to probe the different sources of income to unpack this.

"However, the fact that expenditure rose slightly faster than income tells us that a higher proportion of income is going out on the operational work of these charities rather than being invested in assets, such as new buildings, or being used to build up reserves."

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