What can the UK civil society almanac tell us about charities’ challenges now and in the future?

Today we’re releasing the 2020 edition of the UK Civil Society Almanac. It provides a comprehensive overview of facts and figures related to the voluntary sector, including its:

  • size and scope
  • finances
  • staff
  • volunteering.  

There’s no doubt that covid-19 is having a major impact on the voluntary and community sector. Despite having some data available on the immediate impact of the pandemic, there’s little long-term evidence on what this will mean for charities. Although most of the latest data covers the financial years 2017/18, the Almanac time series can improve our understanding of the challenges that charities are facing today, and possibly in the future.  

We’ll likely see a shrinking sector in the short term

After a period of relative stability until the economic recession in 2008, the sector saw a fall in numbers by 4% between 2007/08 and 2009/10The number of organisations remained at those levels but rose again in 2013/14 and have been almost stable since. Also, the sector experienced a drop of 4% in income in 2008/09. 

In recent years, the sector’s income bounced back to similar levels of growth before the 2008 financial crisis. But growth has slowed down in 2017/18 with income up by 2% compared to growth rates of 3-6% between 2012/13 and 2015/16. Following the financial crisis in 2008, the voluntary sector saw an immediate drop in number of organisations and income. It took a while to bounce back, but it eventually did.   

Different sized charities may face slightly different challenges 

Organisations with more than £100m income account for 0.03% of all organisations and for 23% of the sector’s income. They’re responsible for 30% of the sector’s grant making, with most of them working on national or international level. However, the majority of organisations are small and operate locally. Eight in ten organisations have an income of less than £100,000. 

Bigger organisations are more likely to own buildings and hold some reserves, however, their operating costs are also higher and many of them will now have to consider changes to their workforce. While smaller charities are more likely to have lower operating costs or to be solely volunteer led, instability associated with short-term funding streams could be a more critical issue for them and the removal or retention of single funding awards can be the difference between survival and closure[1]. 

Financial impact will differ depending on income profiles 

The public continued to be the largest income source for the sector. It grew by £1bn to £25.4bn accounting for most of the total income growth. The amount of income from government, £15.7bn in 2017/18, has remained largely stable in recent years. But with income from other sources growing at the same time, income from government as a proportion of the sector’s total income has fallen almost continuously. 

While most of the growth in income from the public was due to two individual legacies, earned income also increased and has largely driven overall growth since 2012/13. This includes fees for services such as membership subscriptions and trading activities such as charity shop sales. In the context of coronavirus, this area will be most vulnerable to the effects of social distancing restrictions which would negatively impact on income generation. 

Recovery is possible but will take time 

It took years for the sector’s assets to recover from the 2008 financial crisis, but by 2017/18 recovery was complete. While investment growth slowed in 2017/18, liabilities also shrank, leaving the sector’s assets in a stronger net position than any time previously: net assets grew by 4% to £142bn, marking another record high. At the same time the sector’s level of reserves amounted to £63.5bn, reaching pre-2007/08 financialcrisis levels for the first time. 

However, investment values have fallen in 2020 and so will have the reserves of some organisations. In the longer term, the fall in investments will impact on the ability of grant makers to give out funding to the sector, since many of them are heavily reliant on investment income.   

The number of employees in the voluntary sector is likely to decrease 

Since 2010, the number of people working in the voluntary sector has grown almost continuously. In 2019, a total of 909,088 people worked for voluntary organisations, representing almost 3% of the total UK workforce. The largest number of voluntary sector employees are working in social work (37%)15% more than the previous year. Although the sector has the lowest skills gaps reported compared to the private and public sector, digital skills are still low. The sudden lockdowns will have been challenging for many organisations, with them having to deliver most of their work remotely. 

The government job retention scheme has been helpful in supporting many organisations through the immediate crisisAccording to government figures, more than 160,000 charity staff have been furloughed in the first six weeks of the scheme. However, with upcoming changes to the scheme and things going back to a new normaljob losses will inevitably affect some sectors more than others.  

The way in which volunteering takes place will have changed 

Over the last couple of years, volunteering rates have remained stable. In 2018/19, 22% of people volunteered regularly through a group, club or organisation, equating to 11.9 million people across the UK. People aged 65–74 are the age group most likely to volunteer on a regular basis (at least once a month)

Due to social distancing measures and shielding, overall rates might have dropped with many of the most regular volunteers falling into an at-risk group or because their normal volunteering activities are suspended. Some organisations will have been able to move some of their volunteering online, however, possibly excluding certain groups

At the same time, thousands of people have come together in more than 700 mutual aid groups across the country while the NHS Volunteer Responder Scheme received around 750,00 volunteer applications. How the pandemic will have affected the overall number of people volunteering remains to be seen, but the way in which people volunteer will have changed. 

More facts and figures 

For more data and analysis, you can have a look at our website, download more data or the summary report.

If you are an NCVO member, you can also go to the NCVO member’s area where you’ll have access to our how to use the Almanac guide. 

This year’s Almanac is supported by Sarasin & Partners. 

[1] For more information on the particular challenges for small and medium sized organisations, have a look at the Navigating Change report. 

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Avatar photo Lisa Hornung is a data and research manager in the research team at NCVO. She leads on the data collection, analysis and communication of the UK Civil Society Almanac. More widely, she helps to ensure that NCVO remains at the forefront of voluntary sector data collection and analysis.

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