# Sector finances finally recover to pre-recession levels but smaller charities still struggling

- Link: https://fundraising.co.uk/2018/05/09/sector-finances-finally-recover-pre-recession-levels-smaller-charities-still-struggling/
- Published: 2018-05-09T10:37:11+01:00
- Author: Melanie May

**Ten years on and overall, the sector’s finances have finally recovered to pre-
recession levels. However, smaller charities have fared less well, according to 
the NCVO UK Civil Society Almanac 2018.**

The [NCVO](https://www.ncvo.org.uk/)‘s Almanac shows that while the sector seems
to have now recovered its finances to pre-2008 levels, smaller charities have not
managed to recover the value of their assets to the same extent as the sector on
average.

Overall, the charity sector’s total net assets reached £121.3bn in 2015/16, finally
surpassing their previous high of £120.5bn in 2007/8,

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Total income for the charity sector reached a new high of £47.8bn in 2015/16: a 
4% increase on the previous year, with £22.3bn coming from individuals and £15.3bn
from government: £186m less (a 1% decline) than the previous year. While income 
from individuals rose, the data shows that this growth was predominantly in earned
income such as membership fees or charity shop sales, rather than donations. Donations
from the public however still account for the largest share of income (35%), and
showed slight growth of 1%, to £7.8bn, while earned income from the public increased
more strongly, by 8% to £11.4bn.

However, despite these figures, four-fifths of income is generated by just 3% of
organisations: those with an income of £1m or more. Small charities, those with 
an annual income of £100,000 or less, make up over four-fifths (82%) of the sector
but account for only 5% of the sector’s income.

The Almanac also shows that the sector’s spend nearly equaled its income in 2015/
16, reaching £46.5bn. £33.1bn of this went on charitable activities, £6.5bn on grants,
£6.4bn on generating funds, and £0.6bn on governance.

#### Value of sector

To estimate the contribution of the sector to the wider economy, the Almanac looks
at the number of people employed and the gross value added (GVA). It estimates the
sector’s GVA to be £15.3bn: roughly similar to the GDP of Estonia in 2016, with 
the voluntary sector employing 880,556 people (3% of the total UK workforce), and
the value of formal volunteering estimated at £22.6bn in 2015.

Sir Stuart Etherington, chief executive of NCVO, said:

> “We can and should celebrate the fact that the UK voluntary sector continued to
> grow, doing more than ever for the people and causes it works for. But I know 
> that aggregate numbers can disguise a great deal of variation in experience 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.
> “The sector as a whole may have recovered from the impact of the recession, but
> there is clearly no shortage of risks out there for charities. The solutions, 
> as ever, all come back to ensuring organisations have the strong governance needed
> to help them manage risks and to ensure they grasp opportunities.”

NCVO uses data from a sample of thousands of charities’ annual accounts to produce
the almanac. Published every year, it is also used by the Office for National Statistics
in their calculations of charities’ contribution to the economy.

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