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Number of general charities

The number of charities in the UK is growing. The number of general charities [1] has increased significantly in recent years, rising from 120,000 in 1994/95 to 164,195 in 2006.  This is partly due to government investment in the VCS due to its increased involvement in public service delivery. (See levels and sources of income). [2]

What are the implications?

• More competition within the sector.
• Changes to levels and sources of income as the funding environment becomes more competitive.
• Blurring boundaries between sectors and an increase in hybrid charities.
• Duplicate, inefficient VCOs may lead to an  increase in efficiency drives to avoid this leading to procurement practices that favour economies of scale
• A variety of providers giving users choice and creating a variety of services.  Effective organisations will flourish and less useful ones won’t.
• Increased public concerns that there are too many charities leading to negative perceptions of charities (see declining trust in institutions)

Moving forward

In a more competitive sector, you may wish to think about your strategic position in relation to other players.

• Do you want to stay small and cover niche markets, or work towards targeting high volumes of clients to benefit from economies of scale?

Being clear about what you offer commissioners could put you at a competitive advantage. VCOs that are able to demonstrate the lasting benefits and distinctive value of what they do are more likely to secure funding.

• Does your organisation need to improve how it assesses and demonstrates the changes it makes?
• What strategies can your organisation put in place now to manage potential future changes in funding?

Efficiency drives are likely to push purchasers towards awarding fewer, bigger contracts.

• How can your organisation develop its negotiating skills to improve your discussions with funders and potential funders in order to secure funding in a more competitive environment?
• Do you have good systems in place to assess your outcomes, and the broader value you create (social, economic and environmental)?
• Can you diversify your income sources or work in partnership with other organisations?

Collaborative working can be highly beneficial for your stakeholders and avoid a duplication of services.

• Are there other organisations with different areas of expertise that your organisation could work with to complement your services?

Funders may increasingly require partnership bids in order to reduce duplication amongst services.

• Do you need to reconsider your strategic position in relation to other players in your area?
• What questions does your organisation need to consider before entering into a partnership with another organisation? (e.g. you may want to think about differences in organisational life cycles, cultures and aims).

Want to know more?

Income of Registered Main Charities In England & Wales, March 2007

Published by: The Charity Commission – a regulatory body

Date: 2007

Format: Web

What is it? A statistical overview of the number of English and Welsh main charities and their incomes.

How useful is this?  Useful as a source of basic statistics.  Data is also available for each year from 1998 onwards though no comparison is made.

Other comments:

Mergers likely as homeless charities hit crisis

Published by: The Guardian – a left of centre newspaper

Date: 2001

Format: Web

What is it? An article exploring how falling numbers of rough sleepers has resulted in competition between voluntary organisations.

How useful is this? This article highlights the issues around large numbers of charities working on a single issue.  With its focus on homelessness it explores the problems that are created but also puts the case for having many small charities working on an issue. 

Other comments:

The UK Civil Society Almanac 2008 - Executive Summary

Published by: NCVO

Date: 2008

Format:Web

What is it? A summary of the key findings from the 2008 Almanac providing an overview of the changing nature of civil society.

How useful is this? A good source of statistics on the voluntary sector including details of large compared to small organisations and discussion of other organisations within civil society.

Other comments: The full 2008 edition with comprehensive statistical analysis of the VCS is available for purchase or NCVO members can download content online.

References

1. General charities - charities registered by the Charity Commission except those considered out of scope (e.g. public bodies with charitable status) or those considered inactive (not having returned financial data to the Charity Commission for three years) [back]
2. UK Civil Society Almanac 2008 [back]