Voluntary giving may have plateaued in the UK and small charities must act now to ensure their future, the Foundation for Social Improvement (FSI) has said.
The latest FSI Small Charity Index report shows a total growth of just 1% in voluntary income in the UK since 2013. It also reveals that between December 2016 and February 2017, the period covered by the report, 53% of small charities had seen no change in their voluntary income. 20% of those surveyed had experienced a decline in voluntary income.
Only 11% of small charities saw an increase in voluntary income of above 10%, while 82% also reported their statutory income levels remained unchanged.
According to the FSI, the figures suggest that voluntary income does not sufficiently compensate for any losses in statutory income, leaving small and local charities and community groups extremely vulnerable to the shortfalls.
- 20% of small charities experienced an increase in earned income this quarter
- 71% experienced no change in earned income
- 65% of small charities reported an increase in demand for services
- 71% collaborate with other charities but only 23% are collaborating at a meaningful level (more than 30% of activities in partnership)
- 38% used reserves in the last quarter
- 22% of trustees see closure as likely in the next 12 months
The report suggests that to survive in the current climate, small charities need to ensure they are investing in the skills of their staff and volunteers, and looking at working or merging with each other.
The FSI’s chief executive Pauline Broomhead said:
“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.”
The FSI’s Small Charity Index is carried out by the FSI among its membership of 4,500 small charities. The latest index surveys 277 charities.