Islamic Relief Worldwide has seen its income drop from £100m in 2012 to £82m in 2013, according to the charity’s annual accounts.
But the charity said this was because of a "decentralised fundraising model" which meant money raised abroad was not being chanelled through the UK headquarters.
It said unaudited accounts for Islamic Relief charities worldwide for the year ending 31 December 2013 show that income increased by 44 per cent, reaching £173m.
The charity said: “We expect this trend to continue, especially as more regionalised operations of the Islamic Relief family grow organically.”
Although the Islamic Relief family has raised more money this year, less of it has been accounted for the UK charity accounts because “a decentralised fundraising model is enabling more funds going directly to the field that would otherwise be directed via Islamic Relief Worldwide,” the accounts said.
Voluntary income for the UK charity was down 15 per cent from £67.7m to £57.6m, which the charity said was “as a result of lower profile emergencies as compared to last year, and the absence of aid match from the UK government". In 2012 aid match funding from the UK government accounted for around £5m.
Income from charitable activities fell from £29m in 2012 to £21m in 2013.
The total resources expended in 2013 was £87m, down from £96m the previous year, with £74m being spend on charitable activities.
During the year Islamic Relief Worldwide became a co-owner of the International Civil Society Centre and established Islamic Relief Academy in Birmingham to develop leadership talent.
In 2013 the highest paid employee earned up to £80,000.