A report from IPPR North and Durham University has found that charities contribute £2.5bn to the region’s economy.
Third Sector Trends in the North West, which is part of the Third Sector Trends study, was published last week and finds that charities in the region employ 110,000 people, accounting for 3 to 4 per cent of total employment in the region.
It also estimates that there are 440,400 volunteers in the region who deliver 31,709,800 hours of work.
It is the first time that the two organisations have attempted to assess the state of the sector in the region. They surveyed 1,400 charities, finding that overall the sector had a relatively stable income, but that these charities expect challenges to arise after further government spending cuts.
The survey also suggests that charities in the most deprived areas are more likely to be financially vulnerable.
Jack Hunter, research fellow at IPPR North, said: “People might not automatically think of charities as an important part of the North West economy, but this data shows that they are an economic powerhouse in their own right.
“And that's even before we consider the indirect support that the third sector provides to the wider economy by, for example, helping people with physical and mental disadvantage or campaigning for local change.
“But while overall the sector seems in relatively good shape, what is worrying is a clear link between deprivation and a charity’s overall financial health: those who are arguably doing some of the most important work with the most excluded North West communities appear to be suffering the most as a result of the government’s austerity policies.
“More attention must be paid to poorer parts of our region, where charities and other third sector organisations are most likely to be in a vulnerable financial situation.”