Charity shops defy recession with profit increase

Fundraising | Gareth Jones | 10 Sep 2009

Charity shops increased their profits by 4.1 per cent in the past year, according to the Charity Shops Survey 2009.

While the gross income of the 69 shop chains in the sample fell by 3.1 per cent to £526.1m, their costs fell even further, by 4.9 per cent to £414.6m, leaving a collective profit of £111.5m. Charity shops have now increased their profits for four years running, and in eight of the last 11.

The welcome decline in charity shop expenditure is due to falls in two key costs. Property costs as a proportion of total income were down, with rents falling from 19.1 per cent to 18.9 per cent, while staff costs as a proportion of total income also fell, from 31.9 per cent to 30.5 per cent.

Oxfam continues to make the most money from charity shops, despite a 0.3 per cent fall in its profits to £21.1m (see table). Cancer Research UK, the British Heart Foundation and the Salvation Army all increased their profits closing the gap between second, third and fourth places. The biggest percentage profit increase was made by Scope, up by 168 per cent, taking it to number 20 in the profit ranking with a surplus of £772,000.

Gift aid

This year a significant contribution to profits was made by the application of gift aid to items sold. The number of charities applying gift aid has more than doubled from 16 to 33 per cent, and collectively they claimed £6.6m in gift aid. On average, charity shops were able to convince a quarter of their donors to make their donations eligible for gift aid, up from 19 per cent last year.

The British Heart Foundation claimed the most gift aid, adding an extra £2.7m to its income having converted 30 per cent of its donors, while St Catherine’s Hospice in Preston has had the most success in converting donors, with 50 per cent agreeing to make donations eligible. Other high profile charities claiming gift aid on donated items include Sue Ryder Care, Barnardo’s, PDSA, Sense and Shelter.

Rank	Charity	No. of shops	Income (£)	Profit (£)	Profit increase (%)
1	Oxfam	702	£81.8m	£21.1m	-0.3
2	Cancer Research UK	580	£65.7m	£17.1m	5.9
3	British Heart Foundation	595	£93.6m	£15.8m	8.9
4	Salvation Army	54	£14.4m	£8.4m	34.6
5	British Red Cross	323	£22.7m	£5.0m	-4.0
6	Barnardo’s	359	£29.8m	£4.2m	70.1
7	RSPCA	215	£9.8m	£3.6m	16.4
8	Sue Ryder Care	355	£28.1m	£3.5m	25.4
9	Save the Children	124	£7.5m	£2.9m	45.8
10	PDSA	180	£20.2m	£2.9m	49.0

Who's Who: Gareth Jones

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