UK charities’ fundraising ratio is highest this century, finds NCVO

The fundraising ratio across the UK charity sector was higher in 2021/22 than in any other year since the new millennium, data shows.

The National Council for Voluntary Organisations (NCVO)’s new UK Civil Society Almanac 2024 covers the 2021/22 financial year – this lag is due to factors including the 10-month gap between a financial year ending and a charity’s deadline for submitting accounts.

It shows total sector income of £69.1bn (€82.7bn), up 9% from the previous year’s £63.5bn (adjusted for inflation). Costs of generating funds, including fundraising costs, were £6.3bn (10% of sector outgoings): down from an inflation-adjusted £7.5bn (or 12% of the sector’s total expenditure) in 2020/21.

As such, the fundraising ratio for the sector reached 5.54, up from 4.73. The ratio had steadily grown from 3.91 in 2012/13, the only time it has dropped below four. It has only twice before exceeded five – in 2000/01 and 2007/08.

Fundraising ratio explained

The fundraising ratio is calculated by dividing the total voluntary and generated income by the amount spent raising funds, minus the cost of managing investments.

A note in the data tables accompanying the Almanac says:

“We believe this provides a good overall indication of fundraising performance by capturing the full range of fundraising income and costs.”

Government income drops

The public remains the largest source of sector income (providing 48%), while Government income – including grants, contracts and service fees – declined from 30% of total income in 2020/21 to 26% in the latest year.

Micro and small organisations (defined as those with an income of less than £100,000 per annum) received the largest proportion of their income from Government, at 37% – a significant increase from 15% in 2020/21. Meanwhile, public income for these nonprofits dropped from 54% to 25% of revenue.

Larger organisations, with income in excess of £1m, received 51% of income from the public and less (27%) from the Government – representing a shift from 46% and 33% respectively in 2020/21.

The Almanac shows that the public is the single largest source of income for 15% of all voluntary organisations, rising to 46% of larger (£1m-plus) organisations.

Social first

Social services was the largest sub-sector of the UK voluntary sector in 2021/22, accounting for 23% of total income and 19% of all organisations.

The next largest sectors in terms of income were health (12%), and grant-making foundations (11%). In terms of number of organisations, it was culture and recreation (15%) and religion (10%).

Nearly half (49%) of UK voluntary organisations have an income of less than £10,000.

Photo by John Cameron on Unsplash