A changing funding landscape for charities involved in criminal justice

Lisa Hornung is a research officer at NCVO. She helps with the production of the UK Civil Society Almanac and undertakes other research projects at NCVO. Previously, she worked as a researcher and data analyst in the language education sector, where she supported academic product development teams with quantitative and qualitative research. As a research assistant at the University of Kassel (Germany) she worked on a large-scale evaluation of a teacher training programme.

 

Today Clinks launches their State of The Sector report which looks at how voluntary organisations working in criminal justice are doing. This year the report is based on NCVO research comprising an analysis of financial accounts of such organisations based on the NCVO Almanac data set, as well as a survey and follow up interviews with individual organisations. This blog post highlights some of the key findings of the financial analysis, you can read the full report for more insights.

Most organisations are small or medium-sized

The criminal justice sector consists of mainly small and medium sized organisations: 26% of organisations have an income below £100k (small) and 50% between £100k and £1m (medium). But its economy is dominated by larger organisations: the total income stood at £528m in 2014/15, with large to super-major organisations accounting for 88% of the total income.

Government is the main income source

The criminal justice sector is largely dependent on income from government which makes up 70% of the total income, followed by income from individuals (19%). This is very different to the UK voluntary sector as a whole with government representing just 34% of the total income while income from individuals represents 45%. The proportion of income from government differs in relation to the size of organisations. Whereas larger organisations get a high proportion of their income from government and individuals, many smaller organisations rely on income from the voluntary sector and the National Lottery.

Income from local government is decreasing

Between 2008/09 to 2014/15, overall levels of government income to the criminal justice sector have remained fairly static while income from local government (both in contracts and grants) has decreased by 40% (£93m). A trend that is similar to the whole UK voluntary sector. At the same time, criminal justice organisations have seen a big fall in government grants (-50%) whilst income from contracts continued to grow slowly. However, growth in government contracts was mainly seen among the very large organisations. In 2014/15, income from contracts makes up 97% of total income from government which is a far larger proportion than for the UK voluntary sector (81%).

Earned income from individuals on the rise

Between 2008/09 and 2014/15, the criminal justice sector has seen a large increase in earned income from individuals (100%), including fees for services and fundraising activities, and a small increase in voluntary income from individuals (19%). Whereas changes in government income are largely due to changes in income of the larger organisations, increases in earned income from individuals occurred across all income bands.

What does it mean?

Our research shows that voluntary organisations working in criminal justice are facing a changing funding landscape. The sector, which is largely dependent on government income, has seen an overall static income from government becoming more centralised and almost entirely focused on contracts delivered mainly by larger organisations. The rise in earned income from individuals across all income bands indicates that most organisations are becoming more entrepreneurial while adapting to the new funding landscape. However, maintaining the same level of income and finding new income streams will continue to be challenging in the current environment, especially for smaller and medium sized organisations.

Full report

This blog has focused on the financial analysis of voluntary organisations working specifically in the criminal justice sector. You can find much more data and insights in the full report, which also covers organisations whose service users might include people who have a conviction, but their main purpose is not to work in criminal justice.

 

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