What do we know about charities and the European Union?

As the process of Brexit unfolds, NCVO research is exploring what the evidence tells us about relationships between the European Union, the voluntary sector and volunteering. There are lots of gaps in our understanding of these relationships, so we are attempting to fill some of these.

I’ve taken a look at what our data and research tells us about the relationship between charities and the European Union. Using data from the Almanac, I’ve put together what we do and don’t know across four areas: funding, where they operate, workforce and giving.

Note on the figures: As European funding makes up only a small part of the voluntary sector’s funding, and the Almanac figures are based on a sample of charities, these figures should be treated as estimates which give a general picture of the scale of funding.

Charities received over £300m from the EU in 2013/14

We estimate that in 2013/14 charities received £307m from the European Union, around 0.7% of their total funding, and around 35% of funding from governments outside the UK. The amount is at the same scale as income from the National Lottery (£488m) and income from investment interest (£299m).

These figures probably hide the true size of European funding however. Where match funding or sub-contracting arrangements are used (as is quite common with EU funding), these won’t be displayed in our data. And while the overall size may be relatively small, for individual organisations EU funding can be a large part of their income.

Our estimate is that 71% of this funding goes to organisations with more than £10m income. This is a bigger proportion than for all government funding, where 54% of funding goes to organisations with more than £10m income.

While income is concentrated in the largest organisations, it still makes up a relatively small proportion of their income. 1.0% of the income of organisations over £10m comes from the EU, compared to 0.4% for organisations with under £10m income.

We estimate that 41% of income from the European Union arrives in the form of grants, with the rest as contracts.

It is difficult to estimate how many charities receive funding from the European Union, but the number is likely to lie at around 3,000 charities. This would suggest around 2% of charities receive some funding from the EU, with around 6-10% of the largest charities (those with over £10m income). We estimate that around £190m of the £300m funding goes to international organisations, particularly those working in international development.

The figures suggest there was no significant change in funding between 2008/09 and 2013/14, with funding from the EU remaining steady in real terms over that period. The chart below also shows the levels of funding from other international sources – including international bodies like the UN and World Bank, as well as foreign governments.

What’s missing?

Data on funding from the EU is patchy – it’s only a small proportion of our sample so it rarely appears in the data. Also, the funding relationships used by the EU can be complex, involving matched funding from local or national bodies and other funding arrangements. Our estimates come from how the funding is described by the charities themselves in their accounts, so if they are not aware that it is EU funding, or haven’t described it as such, then it would not count towards these figures. As an example, where EU funding has been channelled through the Work Programme it is unlikely to show up here. As such, it’s possible that the figures here underestimate the amount of EU funding for charities.

4,300 charities operate in EU27 countries

Charities registered in England and Wales supply to the Charity Commission a list of the countries they operate in. Charities can tick more than one area or country, and there is no indication of what proportion of their activity takes place in a particular area.

Around 4,373 charities say they operate in one or more of the EU27 countries (EU states not including the UK) – that’s around 3% of all charities. These charities represent around 19% of the sector’s total income, so larger organisations are more likely to work in EU countries.

The country with the largest number of English and Welsh charities operating in is Ireland, with France close behind – both have nearly 1,500 charities operating there. Other EU countries with more than 1,000 charities operating include Spain, Italy, Netherlands and Romania.

Number of England and Wales-registered charities operating in EU27 countries

Looking at the activities that these organisations undertake, the largest is religion, with culture and recreation, social services and grant-making foundations also popular.

What’s missing?

Any sense of the volume of activity in EU27 countries, or what that activity is. We would expect that some of this activity is fundraising, for example, with the actual charitable activities happening in a third country. We also don’t know how many charities are part of group structures with charities operating in the EU.

Workforce

We don’t have any existing data on the proportion of the VCS workforce that are EU nationals, or other things like how many charities employ staff based in EU27 countries. We use data from the Labour Force Survey to give our workforce figures in the Almanac, and this could be examined for evidence of the number of EU nationals working for voluntary sector bodies. However, these figures would need sufficient numbers of these to be present in the sample, which is unlikely as charity employees make up only 2% of the survey sample.

Charitable giving

Looking at charitable giving, no data is available on how much EU nationals donate to UK charities, and how those donations flow through partner organisations in EU27 countries. Data on these specific areas isn’t available from the main sources of data in this area – the UK Giving survey from CAF, and the Community Life Survey.

 

At NCVO we’ll be working to try and fill in some of these gaps over the coming weeks and months, as well as looking at other areas, including volunteering.

 

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David Kane David Kane was formerly NCVO’s Senior Research Officer. He discusses open data and emerging trends in the voluntary and community sector and wider civil society.

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