# Charities rely increasingly on government funding, says CAF

- Link: https://fundraising.co.uk/2003/06/22/charities-rely-increasingly-government-funding-says-caf/
- Published: 2003-06-22T23:00:00+01:00
- Author: Howard Lake

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.

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