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Richer areas boast more charities, first Civil Society Almanac shows

Finance | Tania Mason | 19 Feb 2008

Positive discrimination could be needed in government grant-making to ensure capacity-building money reaches the poorest communities, according to NCVO chief executive Stuart Etherington.

Etherington was commenting on the latest NCVO Almanac, published today at its annual conference, which shows that wealthier communities boast a higher density of charities than poorer areas.

He said the revelation that there are 2.6 charities per 1,000 people in prosperous suburbs with more older people, detached houses and two-car households, compared with just one charity per 1,000 in blue-collar communities with lots of children, single parents and terraced housing, was an important policy-making consideration for government departments.

“If you take a government programme like the endowment challenge fund that is trying to raise money for community foundations by match funding, this is an important piece of information.

“How, for example, will the government ensure that it is not just incentivising the creation of community-based foundations in areas where there’s likely to be more activity anyway?

“If it is trying to pursue policies based on social justice, does it have a distinctive role in ensuring it positively incentivises areas where there are low levels of activity now? Do you positively discriminate by targeting grants to those areas? Because you need to build capacity in those areas, otherwise it ain’t going to take off.”

For the first time, this year's Almanac encompasses the whole of civil society, including independent schools, housing associations, trade unions, and political parties. However, it excludes registered charities whose boards are appointed by government, such as the Arts Council, the British Museum and the Guy’s and St Thomas’ Charity.

It shows that in 2005-6 there were 865,000 civil society organisations with total income of £109bn and assets of £196bn. The vast majority, around 600,000, are informal community organisations, and 164,200 are general charities.

The total income of general charities grew by almost 10 per cent on the previous year to £31bn, and for the first time more than half of this was earned by selling goods or services, rather than donated. This means that just under a third of civil society’s income is received by charities.

More than 47,600 charities are “heavily reliant” on government sources of funding, though grant income from government has been flat for five years. And one-tenth of the biggest charities and a third of the smallest experienced swings in income of up to 20 per cent over the previous two years, making budgeting difficult.

Most charities spent less on fundraising and publicity as a percentage of total expenditure compared with previous years, and allocated more of their income to charitable activities. Overall, 72.3 per cent of spending was on charitable work, up from 70.6 per cent the year before.

The proportion of people giving fell, from 53 per cent to 48 per cent of men and from 60 per cent to 59 per cent of women. Though the mean amount donated per person in a four-week period remained the same as the year before, at £16, this was a net drop because less people gave.

Spending on investment management rose sharply, up almost 300 per cent to £334m from £88m in 2004-5 and £80m in 2003-4, for investments of nearly £60bn. According to the NCVO, as only 15 per cent of charities have investment assets, this suggests a “relatively small group of charities are taking investment much more seriously and are willing to pay significant amounts to ensure good returns”. 

The NCVO was also planning to use today’s annual conference to publish results from a public survey which showed 88 per cent of people think there is a social divide in UK society. Nearly two-thirds, or 63 per cent, think this divide will get bigger over the next five years, and just 5 per cent think it will narrow, with the rest not knowing or imagining it will stay the same. 

Only 23 per cent said they would be prepared to take action to try to narrow the gap.

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