Voluntary sector income rose to a record £47.8bn in 2015/16, according to the UK Civil Society Almanac 2018, which is published today.
The almanac, which has been published by the National Council for Voluntary Organisations for the past 17 years, is based on the annual accounts of 7,600 charities for the financial year 2015/16.
Total income increased by 4 per cent from £46.1bn in 2014/15, researchers found.
Earned income, which includes fees for goods and services, was largely responsible for this growth: it went up from £10.6bn in 2014/15 to £11.4bn in 2015/16.
This more than offset a 1 per cent decline in government income from £15.5bn to £15.3bn.
Government funding is now well below its 2009/10 peak of £16bn.
The almanac suggests the sector has finally recovered from the sharp economic downturn a decade ago.
The sector’s total net assets – assets minus liabilities – were £120.5bn in 2007/8, but slumped to £94.4bn in 2008/9. They had bounced back to £121.3bn in 2015/16, the publication reveals.
But smaller charities have not recovered the value of their assets as much as larger ones have.
Sir Stuart Etherington, chief executive of the NCVO, said in a statement that the sector's growth should be celebrated, but warned that the headline figure disguised significant variations on the ground.
"While some charities are going from strength to strength, others – smaller charities in particular – are struggling with the ongoing local government spending squeeze or being pushed out of an increasingly competitive public services market," said Etherington.
"Income from the public was strong in the year under examination, but many have suggested that the transition to a longer-term approach to fundraising methods and the impact of changes to data law could mean future fundraising returns will be lower in the short term.
"The sector as a whole might have recovered from the impact of the recession, but there is clearly no shortage of risks out there for charities."
Other revelations in the almanac
- 881,000 people were employed in the UK voluntary sector in June 2017 – up by 4 per cent on the previous year. This represents 3 per cent of the UK workforce.
- Almost two-thirds (63 per cent) of sector employees are female and 37 per cent are male.
- 37 per cent of people over the age of 16 formally volunteered at least once in 2016/17.
- 9 per cent of voluntary sector employees are from black, Asian and minority ethnic groups, compared with 11 per cent in the public sector and 12 per cent in the private sector.
- The number of EU nationals working in the voluntary sector has fallen by 7,800 since June 2016 when the referendum on European Union membership took place, a fall of 20 per cent.
- London voluntary organisations account for almost half of voluntary sector income in England.
- In 2015/16, north-east England experience the biggest growth in government income (12 per cent). The East Midlands fared worst, receiving 32 per cent less.