Civil Society financial resources in 2010

Karl Wilding, Head of Research National Council for Voluntary Organisations

Contact: karl.wilding@ncvo-vol.org.uk or www.twitter.com/karlwilding

Evidence|Resources|Policy|Opinion|Signposting: www.ncvo-vol.org.uk

Current context

The growth in charity numbers, 1960-present

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Tota

l num

ber

of c

hari

ties

-15,000

-10,000

-5,000

0

5,000

10,000

15,000

20,000

Regi

stra

tion

s/Re

mov

als

per

year

Registrations Removals Number of Charities

Income: £264m

91,000 micro organisations

4,566 major organisations

Income: £26.9 billion

75,000 small/ medium organisations

Income: £8.4 billion Income is heavily

skewed to the few…

How to grow by £10bn: donors + delivery£

billi

ons

Statutory income = £12.8 billion

8

30

55

6873

22

5

22

3538 37 36

0

10

20

30

40

50

60

70

80

Micro Small Medium Large Major Total

Proportion of organisationsthat receive state funding(%)% statutory income of totalincome

70%

51%

51%

50%

50%

45%

43%

40%

25%

24%

16%

15%

7%

3%

10%

34%

22%

32%

23%

14%

41%

25%

39%

51%

58%

62%

50%

41%

4%

6%

11%

7%

10%

18%

5%

19%

15%

18%

9%

8%

11%

6%

5%

5%

5%

6%

10%

13%

6%

5%

9%

4%

12%

13%

24%

38%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Employment and Training

Education

Law and Advocacy

Social Services

Housing

Umbrella bodies

Health

Development

Culture and Recreation

International

Environment

Religion

Research

Grant-making foundations

Statutory sources Individuals Voluntary sector

Private sector Internally generated National Lottery

DfES and the Home Office together accounted for 36% of central government’s VCS spending.

Central government departments’ reported spending on VCOs, 2005/06 (£ millions)

Earned income only: contracts are driving growth, not sales to people/other sectors

Access to statutory income varies according to where VCOs are based…

Proportion of VCOs in each localauthority that receive statutory income, 2006/07 (%) (quintiles)

…but there is some evidence that access to funding is related to need.

Proportion of VCOs that receive local authority funding, classified by the index of multiple deprivation, 2009 (%)

Free reserves

1.4

4.1

4.5

4.6

4.8

5.0

6.3

6.5

6.7

6.8

8.0

8.0

9.2

9.5

18.2

19.9

44.3

74.7

0.0 20.0 40.0 60.0 80.0

Playgroups and nurseries

Umbrella bodies

Employment and training

International

Law and advocacy

Parent Teacher Associations

Culture and recreation

Village Halls

Development

Scout groups and youth clubs

Social Services

Health

Education

Environment

Religion

Housing

Grant-making foundations

Research

Months

Cuts…

Statutory funding of the VCS, 2001/01- 2007/08 (£billions). Source: NCVO

Spending back to here?

• Cuts in expenditure take us back to 2003/04: back to pre-Change Up levels • Cuts imply loss in income to the sector of £3.1-£3.2 billions, but assumes a) VCS funded only by unprotected depts, b) political indifference to the sector

How did government respond in 1991-93?

38

20

18

16

13

5

0 5 10 15 20 25 30 35 40

Cut funding

Look on charity as an extension of socialservices

Moved us lower down list of priorities

Became more sympathetic

Moved us higher up list of priorities

Increased rent/charges for facilities

37

19

14

11

9

6

6

0 5 10 15 20 25 30 35 40

Cut funding

Pressure to become service providers

Less sympathetic to aims

More sympathetic to aims

More funding provided

Shifted responsibility from government

Tightened charity laws

Yes33%

No61%

DK6%

Local Government

Yes23%

No64%

DK13%

Central Government

CommentaryA majority report no change in attitude of government to the sector – but where there was a response the most widely cited response was a funding cut.

Statutory funding matters

• £12.8 bn statutory funding is clearly critical to voluntary organisations and the communities they serve

• 25% cut = £3.2bn

• Local authority funding dominates: and this has been characterised by a clear shift from grants to contracts.

• Not all have benefited from this expansion: small organisations have not been successful in winning contracts

Public Service delivery has shaped the sector

• The VCS has geared-up relatively quickly

• Large and mid-sized organisations now rely heavily on contracts to deliver public services, particularly social care

• At least 450,000 paid staff are involved in the major service delivery areas

• But the sector is still a minor player in the public services industry

Resource threats

1. Inefficient resource allocation2. Can we cut public spending and maintain capacity to

grow the Big Society?3. The funding ecosystem: loss of diversity4. The gap between ‘here’ (funding) and ‘there’ (finance)5. Does more localism just mean more resources for town

halls? Or communities of place?6. Disappointment: scale is an issue that will not go away7. Loss of distinctiveness and independence: why give?

Resource opportunities

1. Grassroots resources: the voluntary impulse is strong2. Capacity: voluntary organisations are more resilient

than a decade ago3. Resource allocation: new forms of social finance 4. Giving: citizen philanthropy5. Asset transfer/sharing6. Working Wikily: new technology and open data will

power social change/resources7. The ferment of ideas produced by the Big Society

Where next: emerging questions for policy

1. Does Big Government really 'crowd out' Big Society?2. How do we address the issue of scaling-up voluntary

action? Big charities?3. Can the Big Society engage all parts of the community,

not just those who shout loudest?4. Are we prepared to stay with this for the long-term?5. What do VCOs – civil society - want the Big Society to

be?