Overview

  • Small charities are most likely (64%) to earn their income from the public via the sale of goods or services, and least likely (20%) to earn their income from government contracts.
  • Over a five year period there has been a shift in the source of the greatest share of small charities’ income, from earned income to voluntary income.
  • Over a five year period, small charities have seen the greatest increase in the amount of goods and/or services purchased by the public as a proportion of their total income.
  • In 2016, the main sources of small charities’ earned income included rent through room hire and workspace (22%) and income from contract delivery (19%).
  • Small charities were more likely to be discussing social enterprise and social investment in 2020 than in 2017 (although still less likely than large charities).

How do small charities earn their income?

  • The smaller the charity, the more likely they are to receive money from the public in exchange for goods or services.
  • Conversely, the larger the charity, the more likely they are to receive money in exchange for goods or services from the government.
  • In 2017/18, charities with an income of under £100k earn nearly three-quarters (74%) of their income from the public.

How has the proportion of earned income changed over time for small charities?

  • Since 2013/14, small charities have experienced a shift in where they get income from, with the overall trend towards receiving the largest share of their income from voluntary sources (45%).
  • The have experienced an almost equivalent overall decline in the proportion of income received through earned sources, from 47% in 2013/14 to 42% in 2017/18.
  • The share of their income through investments has remained relatively stable throughout this time.

How has public trading with charities changed over time?

  • Since 2013/14, the overall amount of goods and/or services bought by the public has increased, regardless of charity size.
  • Small charities have continued to receive the greatest share of their trading income from the public.

What are the main sources of earned income for charities?

  • In 2016, over a fifth of small charities reported that they earned income via renting out workspaces or room hire. This was the most common way of earning income for small charities.
  • The second most common way of earning income was through contract delivery (19%).

Are charities thinking about increasing their earned income?

  • Large and major charities were more likely than small charities to be discussing ways to diversify their income at board level through social enterprise and social investment, in 2017 and 2020.
  • In 2020, a higher proportion of small charities were thinking about diversifying their income through social enterprise or social investment than in 2017 (33% and 27% respectively).
Insights

Public services and small charities

Explore data on how small charities deliver services on behalf of the public sector

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insights

Financial stability and sustainability

What are small charities’ main funding concerns? How stable are their finances?

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Further Reading

NCVO 2020 UK Civil Society Almanac 2020

Locality 2016 Our Impact report 2016

New Philanthropy Capital 2020 State of the Sector 2020: The condition of charities before the Covid-19 crisis 

New Philanthropy Capital 2017 State of the Sector: Charities taking charge: Transforming to face a changing world 

IVAR 2016 Small charities and social investment