What happens when you raise the registration threshold?

Lord Hodgson’s review of charity law recommends that the threshold for charity registration is raised to £25,000, with voluntary registration below that. We don’t think that’s a good idea – although aimed at relieving burden on organisations, we believe that raising the threshold will actually increase the pressure on organisations by removing an important signifier of trust – their charitable status.

I thought it might be useful to look in a bit more detail about the organisations that would be affected by the change. There are currently 96,000 registered charities whose income is less than £25,000 – their total income is over £630 million*. 25,000 of these have incomes between £10,000 and £25,000.

Like charities as a whole, they are concentrated towards the south of England, with 16,600 in South East and 12,000 in each of London, the South West and the East. But significant numbers would be deregistered across the country – 3,000 in the North East, 5,300 in Wales, 7,000 in Yorkshire and the Humber, 8,000 in each of the East Midlands, West Midlands and North West.

Raising the threshold would also mean that charity becomes a more urban activity – 55% of organisations with incomes below £25,000 are based in rural areas.

These organisations undertake a wide range of activities across the whole spectrum of charitable activity. Particularly important are religious groups (13,000 organisations), Parent Teacher Associations (9,700 organisations) and organisations that provide small grants (9,000 organisations).

And these charities do rely on income from fundraising. Data from the Almanac tells us that over half (57%) of the income that these charities receive is from fundraising or voluntary income. We believe that charitable status – and a charity number – is an important signifier for potential donors to small charities can trust those organisations.

* you can explore these numbers in a bit more detail on the Charity Commission’s site. Our numbers are smaller than the Charity Commission’s, because we’ve based the bands on the latest income for that charity, even if it was 2 or 3  years ago. So our figures probably underestimate the number of organisations.

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Avatar photo 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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