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Level and sources of VCS income

Voluntary sector income is still increasing but future funding streams are uncertain. Total income rose to £35.5 billion in 2007/8. This was a 2.9% increase on 2007/8.  The largest sources of funds are donations, legacies and fundraising from  individuals (£13.1 billion) and grants and contracts for service delivery from statutory sources (£12.8 billion). Early indications suggest that income increased again in 2008/9 during the economic downturn, but that individual giving declined, and statutory sources most likely overtook individuals as the largest source of income. As levels of public spending fall, the total income may shrink if other funding sources cannot be found.

What are the implications?

• Ever increasing competition for funds, both from new and existing VCOs.
• Public spending will fall, putting existing voluntary sector funding at risk.
• However there may be new opportunities for involvement in service delivery as government bodies seek ways to deliver public services more cost effectively. *opportunity*
• Higher expectations of evidence due to competition for funds, more strategic funding and increased involvement in public service delivery putting pressure on organisations to demonstrate their outcomes.
• Grantmaking trusts and venture philanthropists become more strategic in their giving and engaged with the organisations they fund.
• Greater emphasis on organisations to achieve efficiency and value for money.
• Increasing need for VCOs to understand the full range of funding sources available to ensure a sustainable funding mix – from social enterprise to loan finance.
• Increased expectation of VCOs to trade and charge for services to diversify their income sources. (See social enterprise)

Moving forward

How will your organisation cope in a difficult funding environment?

• How can you meet the challenge of even stiffer competition for funds?
• How can you persuade individual donors to give more to your cause as the economy recovers?
• Are you too reliant on one source of income - how can you diversify your funding stream to reduce the risk if one source of income dries up?
• Is your organisation ready to bid for and manage contracts? Do you know what is involved or where to go to find out more about the skills you will need?
• What steps should you take to cope with the risk of a reduced income in future?
• How do you balance your mission and costs with the aims of funders in order to secure funding?
• If you currently rely on government funding to support your work are there any other ways you could raise money if your funding is cut?

Want to know more?

NCVO Civil Society Almanac 2010

Published by: NCVO

Date: Spring 2010

Format: PDF

What is it? A summary of the findings from the NCVO Civil Society Almanac 2010

How useful is this? Outlines the trends in income and expenditure. The full Almanac contains an indepth analysis of the finances of Civil Society, in a clear visual style.

Other Comments: The in-depth Almanac is available to purchase from the NCVO, and is free to NCVO Members. The next edition will be published in Spring 2010

UK Giving Survey 2009

Published by: NCVO / Charities Aid Foundation

Date: December 2009

Format: Web

What is it? The key findings from the UK Giving Survey - an annual survey of individual charitable donations.

How useful is this? The survey covers the period of the recession. It shows that there was a major fall in the number of larger donations from members of the professions and explores other trends in UK Giving, reporting an overall fall in individual donations of 11%.

NCVO Sustainable Funding Project

Format: Web

What is it? NCVO team which provides advice and support to help organisations develop sustainable funding streams.

How useful is this? They have ten years experience in this field and there is a wide range of information and tools available to help. Worth checking out at least!