Charities rely increasingly on government funding, says CAF
Howard Lake | 22 June 2003 | News
Income growth amongst the top 500 fundraising charities in the UK has witnessed a shift towards greater reliance on Government sources, according to new research by Charities Aid Foundation (CAF).
Voluntary income among the top charities reached £3.3 billion in 2001-02, but this represents only a modest growth of £178 million or 2.2% in real terms over two years.
In contrast, income from non-voluntary sources grew in real terms by 9.4% to
£2.7 billion between 2001 and 2002. This was mostly due to a substantial increase in grants from government and other public bodies, amounting to 39.9% over the same period.
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In addition, 42% of new income in real-terms to the top 500 fundraising charities is accounted for by the increase in government grants, whether for service delivery or programme development. This compares with 36% from voluntary sources.
Cathy Pharoah, Director of Research at CAF, said: “The figures, presented in this year’s Charity Trends, show there has been a
squeeze on growth in all the independent and voluntary sources of charity income in the current economic climate. At what should be an exciting time for charities with the implementation of the recent government review of the sector, financial concerns may inhibit how positively they can respond to
new initiatives.
“The research lends weight to the two major areas of concern for charities
as they face opportunities for growth, particularly in government service
provision. First, can they afford to take any risks? Secondly, can they maintain sufficient independence if their voluntary sources of income are shrinking?” she said.
The proportion of total income from non-voluntary sources amongst the major
fundraising charities grew from 43.7% to 45.3% of total income between 1999-00 and 2001-02, with a consequent drop in the share of voluntary income to 54.7%. This reverses the long and steady trend of the ’90s when the share of voluntary income grew from 50% in 1995 to 56.3% in 2000.
Stephen Ainger, Chief Executive at CAF, commented on the research by pointing out that “one simple thing which charities can do to maximise the value of their voluntary donated income is ensure that all gifts are made tax-efficiently and that the full benefit of government tax-reliefs is realised.”
The research forms part of the 24th edition of “Charity Trends”, the comprehensive analysis of the resources and expenditure of the UK’s voluntary sector. “Charity Trends” is available at the pre-publication price of £129.00 for the book or £179.00 for the CD Rom.
About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.