INSIGHTS CHARITY SECTOR SPECIAL
15 May 2020: The topic for the #icaewchartoftheweek is the charity sector, with data originally sourced from the Charities Commission indicating that a total of £77.5bn was generated by the 142,790 registered charities in England & Wales that reported receiving income in 2017-18.

As in many parts of the economy, a small number of very large organisations generate a significant share of the total, with £28.4bn or 37% being received by just under 200 charities with annual incomes in excess of £50m. At the other end of the scale, 124,000 or so charities with incomes less than £250,000 generated £4.5bn or 6% of the total.

According to the National Council for Voluntary Organisations (albeit based on a different dataset), the public remains the biggest source of income for charities and other voluntary organisations, making up 45% of total income, followed by government (31%), other parts of the voluntary sector (10%), investment income (8%), businesses (5%) and the National Lottery (1%).

However, the situation has changed dramatically this year. Despite the growth in online donations, other forms of fundraising have been significantly curtailed with most charity shops and cultural facilities closed and street collections and physical events no longer possible.

The Government has announced £750m in emergency funding for certain charities, but this will not be enough to make up for the loss of income across the whole sector, with total income for charities in 2020 likely to fall by many billions of pounds. It is particularly difficult for charities focused on supporting the most vulnerable in society, where more rather than less funding is needed in challenging circumstances.

As a consequence, many charities will quite rightly be concerned about whether they will still be operating in 2021.