A ceiling in voluntary giving may have been reached and small charities should act now to ensure their survival, the FSI has said with the release of its sector income figures for the last quarter.
The latest FSI Small Charity Index report shows a total growth of just 1% in voluntary income since 2013, while its figures for the last quarter show that 53% of small charities had seen no change in their voluntary income. 20% however had experienced a decline, while just 11% of small charities saw an increase in voluntary income of above 10%.
82% of small charities also reported their statutory income levels remained unchanged between December 2016-February 2017, the period covered by the report.
According to the report, the figures suggest that voluntary income does not sufficiently compensate for any losses in statutory income, leaving small and local charities and community groups extremely vulnerable to the shortfalls.
- 20% of small charities experienced an increase in earned income this quarter
- 71% experienced no change in earned income
- 65% of small charities reported an increase in demand for services
- 71% collaborate with other charities but only 23% are collaborating at a meaningful level (i.e. more than 30% of activities in partnership)
- 38% used reserves in the last quarter
- 22% of trustees see closure as likely in the next 12 months
To survive in the current climate, small charities need to ensure they are investing in the skills of their staff and volunteers, and looking at working or merging with each other, the FSI’s chief executive Pauline Broomhead said.
“Having attended the launch of CAF’s UK Giving Report 2017, they like the FSI are seeing a flat-lining of income to the sector which indicates a ceiling in giving may have been reached by givers in the UK.
“At a time when the current commissioning environment poses a major threat to the long-term sustainability of small and local charities and community groups, and the demise of grants and rising contracts there has not been an increase in voluntary income to support the continuation of services, let alone the rise in demand that small charities and local and community groups are experiencing.
“The work of small charities is vital and if they are to continue to exist for their beneficiaries it is imperative that trustees are investing in the skills of their staff and volunteers and looking at potential collaborations or mergers with each other.”
The FSI’s Small Charity Index is carried out by the FSI among its membership of 4,500 small charities. The latest index surveys 277 charities.