The first major reform to charity law in 400 years came a step closer during 2003 when the Government announced its intention to publish a draft Charities Bill.
Twelve new charitable purposes, the reform of the Charity Commission and a new legal form for charities could hit the statute books within 18 months - provided the next election doesn't intervene.
The announcement capped a momentous year for the voluntary sector, which also saw Fiona Mactaggart installed as its minister in the summer's ministerial reshuffle. While there was annoyance that yet another minister had entered via the revolving door, there was also some optimism in that Mactaggart seemed keen to stay awhile.
Earlier in the year, charities learned the hard way that consultation doesn't always mean you get what you want when their almost universal opposition to the merger of the Community Fund and New Opportunities Fund made no difference at all to the Government's determination to push it through.
After assurances were given on the independence and size of the voluntary sector's grant stream, moves towards the merger have continued apace.
The new super lottery distributor, which will handle 50 per cent of all the money to good causes, is expected to be in place by April 2004.
Relations with government also became strained over the war with Iraq.
Most international NGOs aligned themselves with the anti-war camp, echoing public disquiet and warning of the humanitarian consequences of conflict.
But despite a frosty relationship with the British Government over the issue, major aid agency executives were pivotal in persuading Clare Short to stay in the Cabinet for the duration of the war.
The growing influence of NGOs on international issues provoked the ire of US Republicans. A thinktank with ties to the Bush administration launched NGO Watch, a website aimed at monitoring NGO activities, including Oxfam GB and ActionAid, which, it claimed, were undermining democracy.
But if their criticisms caused domestic difficulties for them, it was NGOs' perceived closeness to the US and British military occupation that provoked a lethal response in Iraq. The insurgency, initially restricted to attacking soldiers, soon widened to include aid workers. The massive suicide bomb at Red Cross headquarters in Baghdad in October killed 14 people and convinced the Red Cross to end operations in the Iraqi capital.
Other aid agencies, such as Oxfam, had already pulled out.
Closer to home, economic problems beset charities, as the consequences of the three-year slump in share values hit home. The RSPCA, RNIB, RNID, Help the Aged and Children's Society all suffered job losses. The 200 redundancies at the RSPCA as regional call centres closed sparked a bitter dispute with trade union Amicus. Staff came within eight votes of taking strike action for the first time in the charity's history. At the Child Poverty Action Group, workers did go on strike - an almost unknown event in the voluntary sector - in a dispute over contracts.