Income to the sector may be flat-lining, as a "ceiling of giving" is reached, says the chief executive of the FSI following the publication of its latest small charity index.
The FSI Small Charity Index: Taking the Pulse of the Small Charity Sector, which was launched yesterday, shows that 82 per cent of small charities reported that their statutory income levels remained unchanged in the three months between December 2016 and February 2017, while 53 per cent said their voluntary income had deceased.
The report, which is based on data gathering and analysis of trends is carried out by the FSI through its membership of over 4,500 distinct small charities, and surveyed 277 charities in this period, adds that only the North and the Midlands have seen an increase in voluntary income this quarter, of 3 per cent and 1 per cent respectively.
Pauline Broomhead, chief executive of the FSI, said that these findings echoed those in CAF’s annual UK giving report launched earlier this week, which showed a decline in regular giving.
Broomhead said: “Having attended the launch of CAF’s UK Giving Report 2017, they like the FSI are seeing a flat-lining of income to the sector which indicates a ceiling in giving may have been reached by givers in the UK.
“At a time when the current commissioning environment poses a major threat to the long-term sustainability of small and local charities and community groups, and the demise of grants and rising contracts there has not been an increase in voluntary income to support the continuation of services, let alone the rise in demand that small charities and local and community groups are experiencing.
“The work of small charities is vital and if they are to continue to exist for their beneficiaries it is imperative that trustees are investing in the skills of their staff and volunteers and looking at potential collaborations or mergers with each other.”
Small charities need a ‘larger slice’
Concluding the report, Broomhead said that “if the cake isn’t getting bigger we need to strive for a larger slice”. She said this means that small charities need to get better at fundraising and better at articulating their message to those who would support them.
She said that this “will require trustees to invest in upskilling their staff to ensure that they are at the top of their game when it comes to securing funds through voluntary means”.
She also said that small and local charities need to be “more efficient and effective” in the way they deliver services. She said that this will certainly mean collaborating more with likeminded charities where we can pool our resources to deliver as effectively as possible.
- 71 per cent of charities surveyed experienced an increase in earned income this quarter
- 65 per cent of small charities reported an increase in demand for services this quarter, with 31 per cent saying it was unchanged
- 71 per cent of charities asked work in partnership with other charities
- 80 per cent of those charities surveyed hold reserves, with 62 per cent of those saying they maintained the level of reserves over the previous quarter