Voluntary income at the largest 100 fundraising charities fell by 2.7% year-on-year in 2018-19, a report based on charities’ annual accounts has found.
This amounted to a £92m loss after inflation compared to the year before.
The Top 100 Fundraisers Spotlight, based on data from Charity Financials, found that voluntary income, statutory income and overall income were all down last year at the top 100 fundraising charities.
Cathy Pharoah, author of the report and co-director of the Centre for Giving and Philanthropy at Cass Business School, wrote: “As the sector grapples with the impact of Covid-19 on its earning capacity, the findings for 2018-19 are particularly important for indicating any changes resulting from high-profile sector crises around service, governance and fundraising standards, as well as reaction to sector measures to address these.”
Fundraising income down or stable at most charities
Voluntary income totalled £5.8bn at the top 100 fundraising charities in 2018-19, £92m less than the year before.
Almost half of charities saw it decrease, with 11 registering falls of £10m or more and 37 seeing reductions in the range of £10,000 to £10m.
Among the charities registering significant decreases were Save The Children, which lost some corporate support after the safeguarding scandal it was involved in, and Comic Relief, whose 2018 Sports Relief event had a particularly challenging year and usually raises less than Red Nose Day.
Nine charities did grow their fundraising income, but only enough to match inflation.
British Heart Foundation and Macmillan Cancer Support, respectively second and fifth in the top 100 chart, maintained their levels of fundraising.
Cancer Research UK, which tops the list, achieved a 2% growth in real terms.
Despite the overall downtrend, some charities did grow their fundraising income significantly. Guide Dogs for the Blind Association’s fundraising income increased by £11m across a range of income channels. Royal Marsden Cancer Charity and The National Trust also grew their voluntary income by about £10m.
Legacies not a sustainable long-term strategy
According to the report, many charities relied on legacies to maintain or grow their levels of fundraising.
Oxfam, for example, grew its fundraising income “largely because of an exceptional year for legacy income”, but lost about £13m in real terms from regular donations, appeals and events after the Haiti safeguarding scandal.
Great Ormond Street Hospital Charity saw its overall fundraising income decrease after a “bumpy ride with media attention over the sharing of donor details and its receipt of donations from the Presidents Club”, but legacies were up.
Pharoah said that while the increase in legacy income “is much welcomed”, legacies may not be a long-term solution to a challenging fundraising environment.
She wrote in the report: “Legacies are principally the expression of past goodwill and wealth. Relying on legacies may not be a sustainable strategy in a period of faltering global growth.”
Overall income down by 3%
Statutory income at top 100 fundraising charities fell by £209m. Save the Children alone was down by over £100m after the Department for International Development paused funding as a result of safeguarding issues.
Income from charitable activities increased by 3% in real terms, with National Trust, Cancer Research UK and the Victoria and Albert Museum growing it by £21.6m, £19.9m and £5.7m respectively.
But this was not enough to generate overall income growth, and income at the top 100 fundraising charities fell by 3% in 2018-19. Voluntary income made up about 63% of the total.
Pharoah wrote that “in practice this took its income in real terms back to where it was three years ago”.
All in all, the report’s findings suggest that the fundraising environment was already challenging even before the Covid-19 crisis hit charities.
Pharoah said: “In a period of faltering global growth, with the effects of the Covid-19 crisis difficult to predict, income growth is likely to prove an elusive target for some time.”