Charity Index

Recent rally recedes: Charity 250 Index

Finance | Diane Sim | 8 Mar 2012

Last year’s recovery of the Charity 250 Index and the upturn in voluntary income have both been short-lived, writes Diane Sim.

 >> Download Charity 250 Index March 2012 as .pdf<<

The positive upturn in the fortunes of the Charity 250 Index at the end of last year, when it outperformed both its quarterly and annual benchmarks, has sadly not been sustained. With the addition of over 100 charities with financial year-ends up to and including 31 March 2011, the Index has fallen back to the below-par performance that has characterised most of the last two years.

The Charity 250 Index rose by 41 points in the first quarter of 2011, some 15 points behind its average quarterly rise of 56 points. Income from legacies and trading operations outperformed their quarterly average rises by 104 points and 47 points respectively. However, this was not sufficient to offset below-average performance from voluntary income, investment income and grants and fees, which lagged their average quarterly rises by 53, 28 and 18 points respectively.

A similar pattern is discernible in the annual data: in the year to 31 March 2011 the Charity 250 Index rose 96 points, some 31 points behind its average annual rise of 127 points. All income streams underperformed their annual averages with the exception of legacies, which outperformed its annual average rise by 118 points. Charities reporting significant increases in legacy income in the year under review include the Paul Hamlyn Foundation, the YMCA and the Children’s Trust.

The biggest disappointment in the Charity 250 Index data for the first quarter of 2011 is the fall-off in voluntary income, which for charities reporting in the fourth quarter of 2010 had shown definite signs of recovery. A notable casualty is the Disasters Emergency Committee, which reported a 34 per cent decrease in voluntary income, resulting in a 33 per cent fall in income overall.

While it would be comforting to see this quarter as the blip, and last quarter as the trend, this quarter sees almost half of the Charity 250 Index members reporting their figures and, as such, provides a much more telling indicator of the health of the Index as a whole.

Not all is doom and gloom in the area of voluntary income of course: CLIC Sargent Cancer Care for Children reported a 61 per cent increase in voluntary income, which contributed to a 44 per cent increase in its income overall. Similarly St Dunstan’s, which supports former servicemen and women suffering from blindness, posted a 51 per cent increase in voluntary income and a 33 per cent increase in income overall.

However, most of the charities reporting overall income increases of 20 per cent or more in the quarter to 31 March 2011 are heavily reliant on income gains from grants and fees – an income stream, which is itself increasingly under pressure. This includes some of the larger players in the Charity 250 Index such as Alternative Futures, Crime Reduction Initiatives and the Federation of Groundwork Trusts, to name but a few. 

 >> Download Charity 250 Index March 2012 as .pdf<<

Directory: Central YMCA | Children's Trust [The Children's Trust] | Clic Sargent | Disasters Emergency Committee
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