Voluntary sector finances strengthening

The sector's financial health appears to be improving, according to NCVO's UK Voluntary Sector Almanac 2007, published yesterday.

In 2004/5 charities' total funds -£77.6bn - equated to 3.1 years' worth of current expenditure. The figure is up from 2.7 years' expenditure in 2003/4, which suggests that charities' reserves are growing larger.

The report, which is covered in detail in tomorrow's Third Sector, also showed that the sector had assets, defined as land, buildings, equipment, investments and cash, worth £88.5bn in 2004/5. But liabilities, such as debts, totalled £10.6bn.

More than 80 percent of income funds in 2004/5 were unrestricted, the Almanac revealed, allowing charities to spend funds how they wished. Income funds, mainly investment and cash deposits, totalled £55.7bn, £46.6bn of which was unrestricted.

Endowment funds, primarily capital funds that could not be spent, stood at £18.7bn - 24.2 per cent of total funds.

Charity investments were worth a total of £51.8bn in 2004/5. They generated income of 2.2bn, or 7.8 per cent of the sector's total income. Investments were much more important to larger charities, the report found. organisations with income above £10 held 80.1 per cent of their income as investments. Those with income below £10,000 held 29.2 per cent of their assets as investments.

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