UK: the third sector

Sector overview

An economic force. It’s not a play on words: with a total income of about £108.9 billion, and a workforce of 1.35million people, the 6.4% of the total workforce, UK civil society is a sector in rude health.

Actors of this growing force are more than 865,000 organisations with different souls. For the first time the Civil Society Almanac included a wide rage of organisations such as universities, housing associations, independent schools, building societies, trade unions, common investment funds, political parties, industrial and provident societies, friendly societies, working men’s clubs, independent museums, community interest companies, sports club and excepted charities.

– 164,200 general charities with a combined income £31bn;
– 4,400 co-operatives owned by more than 11 million people creating more than 193,000 jobs (they had an income of £26.2billion in 2005/06. Most of the incoming resources are concentrated in the 74 largest cooperatives)
– 13,000 faith groups with £3,470 million income and 47,000 staff.
– 2,200 benevolent societies with a staff of 3,800 people

These figures could be bigger: there are 460 registered charities with a combined income of over £3.4billion excluded from the report because they are controlled by the government or by the National Health Service (Nhs).

In UK we find also:
– 55,000 social enterprises with a contribution to GDP of £8.4 billion;
– 9,000 foundations, the top 500 with a total income of £2.837 million;

South-West and Scotland have the highest density of general charities per person, with more than 1charity for every 250 people, almost twice as many per person as in the North East of England.

Income for general charities

According to the Ncvo Civil Society Almanac 2008, the total income of the general charities is £30,979.1 in the financial year 2005-2006.

Where the charities get their money from varies greatly, depending on their size. The mid-sized charities are loosing out both to organisations rooted in a community that can draw on that community for funds and to the largest charities that are powerful marketing machines with nationwide brand awareness.

Income is derived from a range of sources, these are primarily:

– 37.2% from individuals, it is the greatest source of income for the smallest and largest charities.

– 35.7% from public sector (governments and its agencies in the UK, the National Lottery distributors, the European Union and overseas governments) with a totalled of £11 billion in 2005/2006.

– 11.2% from the voluntary sector (trusts and grant-making foundations). That’s an important source of funds for charities with an income up to £1 million. Though the increase in partnership working is increasing the circulation of resources among the sector. In fact, for the smallest charities, with incomes up to £10k, the voluntary sector is more important than government, probably a reflection of grant making trusts and foundations targeting for smallest groups.

– 4.4% from business

– 11.5% form internal (trading subsidiaries and the proceed from investment).

Over half of all charities get no income from the government, including a third of all charities with incomes of over £10million.

Regarding the public funding the local governments are today the biggest source of state funding, providing almost 50% of the total income while only 40% comes from central government. 5.1% of public funding comes form the National Lottery and European funding accounts for a small proportion of 4.1%.

The sector’s income continues to be heavily concentrated in a relative small number of organisations. A small group of what might be called “major charities” – 18 organisations, mostly household name brands, with an annual income of over £100 million – generate 1/8 of the sector entire income:

– over 70% of total income is generated just by 2% of the sector;
– less than 7% of total income is generated by 86.6% of organisations that have incomes of less than £100,000.
– over 40% of the sector’s income is generated by charities based in London despite the fact that only 12% of the UK’s charities are located there.