# Charities ‘prop up’ state services by £2.4 billion a year, says NPC report - Link: https://fundraising.co.uk/2024/02/19/charities-prop-up-state-services-by-2-4bn-a-year-says-npc-report/ - Published: 2024-02-19T10:00:06+00:00 - Author: Melanie May **Shortfalls in funding mean 62% of charities are having to cross-subsidise public service contracts with other sources of funding, such as money from fundraising, according to New Philanthropy Capital’s (NPC) State of the Sector 2024 report.** [NPC](https://www.thinknpc.org/) found that the median amount a charity receives from government for its service is 65% of the value of the contract, leaving it to find the rest to successfully deliver it. This means the average charity is contributing 35% of the value of a contract. In addition, 44% of the charity leaders asked said they had to use other sources of income most of the time, and almost a quarter (23%) said it was every time. Only 27% had had contracts uplifted with inflation. ## Advertisement As a result, NPC estimates that the sector is subsidising government services by £2.4bn every year. The _[State of the Sector 2024](https://npproduction.wpenginepowered.com/wp-content/uploads/2024/02/NPC-State-of-the-Sector-2024-Ready-for-a-reset.pdf)_ report also found that 44% of charities have turned down contracts due to the operational risk being too high, although this is 10% lower than in 2020. The report says: > “There are many reasons why charities do this. Our previous research shows that > some organisations can afford to do this, doing so intentionally to improve the > quality of a service. Others do this without realising, or because the needs they > see leave them with no choice.” It adds: > “This represents an ongoing and likely unsustainable risk to vital public services > which people rely on. Some organisations may reach crisis point and have to close > services or even the whole organisation. At this point, people who rely on these > services will go without support and some may have to resort to already stretched > emergency services instead.” It recommends that the government works with charities to identify potential risks in public service delivery, including cross-subsidisation of contracts, and that it co-develops a new approach to delivery which _“recognises the wider value that charities bring in communities and makes use of charities’ unique advantages as a partner in service delivery to tackle needs around the country”._ #### The public view NPC also found that while 83% of charity leaders think that they work in the geographic areas where need is greatest ‘most’ or ‘all of the time’, only 41% of the public think this is the case. 54% in the public survey said they want the government to give more support to charities to work in poorer areas. 59% of the public also want government to work in partnership with charities more. NPC surveyed 298 charity leaders for the report, and also conducted a survey of 2,062 representative members of the public, including 893 people who have used charity services in the last 12 months. * **[Gareth Davies argues 'charity is an investment like any other'](https://fundraising.co.uk/2006/03/09/gareth-davies-argues-039charity-investment-any-other039/)**( 9 March 2006) * **[New Chief Executive at New Philanthropy Capital](https://fundraising.co.uk/2008/01/30/new-chief-executive-new-philanthropy-capital-461/)**( 30 January 2008) * **[Are on line 'philanthropy markets' the future?](https://fundraising.co.uk/2008/07/16/are-line-039philanthropy-markets039-future/)**( 16 July 2008)