The NCVO Almanac is the definitive publication on the state of the voluntary sector in the UK used by the ONS, cited by the media, and referenced by sector leaders, policy makers, journalists, and academics. This year’s publication is primarily based on charity accounts for the financial year 2019/2020.
The Almanac helps us understand how prepared charities were going into the pandemic and what the impact of the first lockdown looked like, and we can begin to see what state the sector is in going into the cost of living crisis. Here are some of the key findings…
The sector is going into the cost of living crisis more reliant on public giving
The latest data reveals that for the first time in 20 years the voluntary sector is now depending on the generosity of the public for over half its income. Income from the public made up 51% (£30 billion) of the sector’s total income in 2019/20.
With wages not rising in line with inflation and inflation expected to peak at its highest rate in 40 years by the end of 2022, we are looking at the cost of living crisis placing a squeeze on public giving at a time when the sector is majority-funded by the public.
Although large organisations are more likely to own buildings, employ staff, and have higher operating costs, they are also more likely to have reserves and are less reliant on public giving for their income. This could mean they will be better equipped to weather this crisis compared with smaller organisations who are more dependent on the public for their income (58%). Added to the challenges of rising demand and increased costs – caused by both the pandemic and cost of living crisis – any fall in income could see some smaller charities close without extra support from government.
Small charities likely to make up smaller proportion of the sector as larger ones grow
There are 165,758 voluntary organisations in the UK (2019/20). The number of larger organisations has continued to grow, more than doubling over the past two decades. ‘Large’ organisations – those with an income over £1m – account for 80% of the sector’s income, 82% of spending and 86% of assets. In comparison, micro and small organisations make up 80% of voluntary sector organisations but only 4% of income, 5% of spending and 4% of assets.
This year’s research shows that small and micro organisations are declining in both number and proportion over time. In 2000/01 small and micro organisations made up 88% of the voluntary sector but this has fallen to 80% (2019/20). The impact of the pandemic and cost of living crisis on smaller organisations will mean we are unlikely to see a reversal of this trend.
Fewer closures than expected, but trend unlikely to continue without further support
As others have also shown, the expectations that the Covid-19 pandemic would result in a dramatic increase in charity closures have not yet appeared. The number of closures plummeted from 5,846 in 2019, to 3,830 in 2020. This downward trend has continued with just 3,596 removed in 2021.
With charities expecting their energy bills to rise by anywhere from 200% to 1,700% over the next six months, many are already having to make difficult decisions to ensure their future sustainability. For some the lasting impact of the pandemic on their financial resilience will mean they aren’t able to weather the current crisis without further government support.
Any increase in charity closures will be felt more in communities in areas that already have fewer charity services. For example, in north-east England there are only 1.6 organisations per 1,000 people, compared to twice that in the south-west of the country.
Voluntary sector workforce fastest growing of any sector, but diversity remains low
The latest data sees the number of people working in the sector continuing to increase. The sector now has a paid workforce of almost a million (952,000 in 2021). While substantially smaller than both the public and private sectors, the voluntary sector has seen the fastest workforce growth over the last decade - growing by over a quarter (27%) since 2011.
However, although there has been a slight increase (2%) of minority ethnic groups in the workforce in the past 10 years, there is less ethnic diversity in the voluntary sector workforce than both the public (14%) and private (13%): with white people constituting 90% of the workforce.
It’s not just ethnically homogenous. 3% of trustees are under 30, and there are half as many people under the age of 25 as the private sector. When it comes to the diversity of the sector, we know that we have a long way to go.
The ways in which we volunteer has changed, with formal volunteering declining during pandemic
The findings show that more than half the population volunteered informally at least once during the pandemic, with a third (33%) doing so at least once a month. This substantial increase is linked to the pandemic. However, the number of people volunteering formally has taken a real hit in the same period: falling from 20 million in 2019/2020, to 16.3 million in 2020/21.
Lockdowns saw major changes to the way volunteering operated, and some of these changes have had a significant long-term effect. We know that one of the major barriers to volunteering is paid employment, and the impact of rising costs on people’s capacity to volunteer could mean that we see more significant changes in the volunteering landscape over the coming years.
To see the full data and analysis from the research team at NCVO you can read the latest edition of the UK Civil Society Almanac.
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