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NCVO webinar: UK Civil Society Almanac 2020: What the latest data tells us
The document summarizes key findings from the UK Civil Society Almanac 2020. It finds that while the number of organizations has remained stable in recent years, most are small with incomes under £100k. Total charity income and assets have grown but more slowly in recent years, with the public now the main income source versus government. Reserves are back to pre-2008 crisis levels but reductions in investments could threaten financial fragility. The paid workforce has reached 900,000 but is likely to decrease, while formal volunteering rates have remained stable though changing in form. The document outlines implications and practical support available for charities during the current challenges.
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NCVO webinar: UK Civil Society Almanac 2020: What the latest data tells us
- 1. THE UK CIVILSOCIETY ALMANAC 2020 What can the latest data tell us about charities’ challenges now and the future? 9 June 2020 | #ncvoAlmanac
- 2. SPONSOR’S INTRODUCTION Richard Maitland Partnerand Head of Charities Sarasin & Partners
- 3. THE LATEST DATAAND WHAT IT MEANS FOR THE SECTOR Topics we will cover • Size and scope of the sector • Income and income sources • Assets and reserves • Staff • Volunteers
- 4. WHAT IS THEALMANAC?
- 5. ALMOST 20 YEARSOF DATA ON CHARITY FINANCES, WORKFORCE AND VOLUNTEERING
- 6. SIZE AND SCOPEOF THE SECTOR
- 7. POLL 1: Based onthe Almanac definitions, how big is your organisation?
- 8. Data - 50,000 100,000 150,000 200,000 Number of voluntaryorganisations, 2000/01 to 2017/18 166,952 171,074 163,392 THE NUMBER OF ORGANISATIONS HAS REMAINED RELATIVELY STABLE OVER THE PAST FIVE YEARS
- 9. THE MAJORITY OFORGANISATIONS ARE SMALL WITH INCOME OF LESS THAN £100K 81 15 3 0.4 0.034 14 28 31 23 5 14 28 29 24 2 11 30 28 28 Micro and small Medium Large Major Super-major Number Income Spending Assets Proportion of number of organisations, income, spending, assets by size, 2017/18 (%) Data
- 10. THE MAKE-UP OFTHE SECTOR IS CHANGING BUT THE REAL PICTURE IS MORE COMPLEX Data Share of total income by size of organisation, 2000/01 to 2017/18 (%) 0 20 40 60 80 100 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Micro, small and medium Large Major and super-major 0 10 20 30 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 Income by size of organisation, 2000/01 to 2017/18 (£bn, 2017/18 prices)
- 11. DOES SIZE MATTER? Differentsized charities will face different challenges Large • Still vulnerable to economic shocks • Higher operating costs and larger liabilities Small • Volatile income and short-term funding • Blurring between governance and operations Implications
- 12.
- 13. INCOME AND INCOMESTREAMS
- 14. POLL 2: For thecurrent financial year, what changes are you expecting for your total income compared to your initial budget?
- 15. INCOME IS GROWING,BUT MORE SLOWLY THAN IN PREVIOUS YEARS Data Total income, 2000/01 to 2017/18 (£bn, 2017/18 prices) £53.5bn 0 10 20 30 40 50 60
- 16. THE PUBLIC ISDRIVING OVERALL INCOME GROWTH Data Breakdown of income by source over time, 2000/01 to 2017/18 (£bn, 2017/18 prices) 0 5 10 15 20 25 30 The public Government Voluntary sector Investment Private sector National Lottery
- 17. GOVERNMENT INCOME ASA PROPORTION OF TOTAL INCOME IS AT ITS LOWEST POINT Data Income from government as total amount and as proportion of the sector's total income, 2000/01 to 2017/18 (£bn, %, 2017/18 prices) 0% 10% 20% 30% 40% 0 5 10 15 20 25 Amount (£bn) As porportion of total income (%) 29% 37%
- 18. HOW CAN CHARITIESPLAN FOR FINANCIAL SUSTAINABILITY? Financial impact will differ depending on income profiles Latest NCVO / IoF / CFG / PWC survey: • Trading income 72% lower than expected • Voluntary income 14% lower than expected Implications
- 19. HOW MIGHT SPENDINGDECISIONS CHANGE? Implications Source: CAF UK Giving
- 20.
- 21. POLL 3: How manyreserves do you have in terms of months of spending?
- 22. INVESTMENT ASSETS HAVERECOVERED BUT GROWTH IS SLOWING DOWN Data Nets assets and investments assets, 2000/01 to 2017/18 (£bn, 2017/18 prices) 0 20 40 60 80 100 120 140 160 Total net assets Investment assets
- 23. THE SECTOR’S RESERVESHAVE GROWN BACK TO PRE-FINANCIAL CRISIS LEVELS OF 2008 Data Reserves over time, 2000/01 to 2017/18 (£bn, 2017/18 prices) 0 10 20 30 40 50 60 70 £63.5bn£63.2bn
- 24. LEVELS OF RESERVESDIFFER NOTABLY ACROSS DIFFERENT SUBSECTORS Data Level of reserves as months of spending by subsector, 2017/18 71 36 15 13 12 10 8 8 6 6 6 5 5 5 5 4 3 2 Research Grant-making foundations Religion Housing Development Playgroups and nurseries Environment Health Law and advocacy Social services Scout groups and youth clubs Education International Umbrella bodies Employment and training Culture and recreation Parent-teacher associations Village halls
- 25. HEADING TOWARDS FINANCIALFRAGILITY? • Reduction in income from investments • Use of reserves to cover operational costs Implications
- 26.
- 27. POLL 4: What changesare you expecting for your paid workforce in the coming 6 months?
- 28. THE SECTOR’S WORKFORCEHAS REACHED 900,000 FOR THE FIRST TIME Data Number of employees in the voluntary sector, September 2009 to June 2019 0 250,000 500,000 750,000 1,000,000 909,088
- 29. OVER A THIRDOF THE VOLUNTARY SECTOR WORKFORCE ARE EMPLOYED IN SOCIAL WORK ACTIVITIES Data Proportion of voluntary sector employees by subsector, June 2019 (%) 37 1212 9 6 24 Social work Residential care Education Membership Human health Other
- 30. CHARITIES HAVE AHIGHER PROPORTION OF PART-TIME EMPLOYEES THAN OTHER SECTORS Data 63 71 75 37 29 25 Voluntary Public Private Full-time Part-time Work pattern by sector, June 2019 (%)
- 31. THE NUMBER OFEMPLOYEES IS LIKELY TO DECREASE Implications
- 32.
- 33. POLL 5: Have yourvolunteers been able to continue volunteering?
- 34. LEVELS OF VOLUNTEERINGHAVE REMAINED STABLE Data Formal volunteering rates, 2001 to 2018/19 (%) 0 10 20 30 40 50 Once a month (old survey) Once a year (old survey) Once a month Once a year 36% 22%
- 35. PEOPLE AGED 65–74ARE THE AGE GROUP MOST LIKELY TO VOLUNTEER ON A REGULAR BASIS Data Proportion of people formally volunteering by age group, 2018/19 (%) 35 29 40 36 39 31 21 15 22 22 28 24 16 to 24 25 to 34 35 to 49 50 to 64 65 to 74 75 and over At least once in the last year At least once a month
- 36. THE WAY INWHICH PEOPLE VOLUNTEER HAS CHANGED Implications
- 37.
- 38. EFFECTIVE LEADERSHIP • NCVOwebinars on board leadership during the pandemic and key things trustees need to focus on • NCVO’s governance wheel FINANCIAL SUPPORT AND MANAGEMENT • Government guidance for voluntary and community organisations • Webinars and training • Financial difficulty and insolvency guidance What next? PRACTICAL SUPPORT
- 39. PRACTICAL SUPPORT INVESTMENTS • Sarasin’sCompendium of Investment What next?
- 40. PRACTICAL SUPPORT What next? MANAGINGAND SUPPORTING YOUR WORKFORCE • Blog: How to support employee wellbeing during coronavirus • Webinar: Practical considerations for managing and supporting staff • Upcoming webinar: How to manage operational change INVOLVING VOLUNTEERS • Keeping volunteers engaged during coronavirus • Webinar: Volunteering in a pandemic – lessons from voluntary organisations • Guidance on involving volunteers during covid-19 NCVO Knowhow
- 41.
Editor's Notes
- #2 Introduce ourselves
- #6 For almost 20 years, the UK Civil Society Almanac has been published annually by NCVO It is the definitive reference publication for anybody interested in the voluntary sector, and its role in civil society. Most of our data is based on administrative data sources like the Charity Commission register We use a sample of around 10,000 charities’ annual reports, aggregated and weighted to match the sector > due to the time it takes for accounts to be submitted and then analysed, most of our data covers the financial year 2017/18 For workforce and volunteering we draw on official surveys from the ONS and DCMS
- #9 Over the past five years, the total number of organisations has been relatively stable. In 2017/18, there were 166,952 voluntary organisations in the UK This includes only those organisations that fall into our ‘general charities’ definition, and excludes registered charities such as housing associations, univiersities and independent schools. However, when we look back at the 2008 financial crisis, we can see that sector saw a fall in numbers by 4% between 2007/08 and 2009/10. The number of organisations remained at those levels but rose again in 2013/14 and have been almost stable since.
- #10 The majority of organisations are small and operate locally. Eight in ten organisations have an income of less than £100,000. 77% of them work solely on a local level. While big in numbers, they only make up for 4% of the sectors income and even less of the sector’s total assets (2%) On the other end of the spectrum, super-major organisations – those with more than £100m income - account for 0.03% of all organisations and for 23% of the sector’s income. Most of those organisations work on a national or international level and are responsible for 30% of the sector’s grant making.
- #11 The overall make-up of the sector appears to be shifting towards bigger organisations, with the number of charities with an income of more than £100m increasing in recent years. The number of super-major organisations increase from 33 five years ago to 56 in 2017/18 At the same time, their share of the total income has risen (see the chart on the left side) However, the detail behind that data is more complex Some of the growth in bigger organisations is linked to a natural expansion of income bands. Income-band classifications have stayed the same, however organisations’ incomes have grown with inflation resulting in movement between income bands. At the same time, some public-sector bodies have moved into the sector and other organisations have grown out of mergers. Even though the share of the sector’s income going to smaller and medium-sized organisations is shrinking, the actual amounts have remained relatively stable (as seen in the right chart)
- #12 Bigger organisations are more likely to own buildings and hold some reserves, however, their operating costs are also higher and many of them will now have to consider changes to their workforce. Being big doesn’t save you from economic shocks, although they might have more reserves Higher operating costs, in terms of staff and premises; larger liabilities, such as pensions and loans Examples of big charities reducing numbers of staff National Trust for Scotland announced it is consulting on 400 redundancies St John Ambulance will be making 250 employees due to a shortfall in funding RSPCA to make up to 300 redundancies More than 200 UK jobs could be lost at Oxfam, after the charity’s funding plummeted during the coronavirus pandemic. Smaller charities are more likely to have lower operating costs or to be solely volunteer led, instability associated with short-term funding streams appears to be a more critical issue and the removal or retention of single funding awards can be the difference between survival and closure. With staff on furlough, they might also have seen governance and operational responsibilities blurring, with trustees having to get more involved. However, lower operating costs might make them more flexible and help through the crisis?
- #16 Both total income and spending of the voluntary sector grew in 2017/18, however growth is slowing down. Income was up by £1.2bn to £53.5bn, representing a 2% increase. This is the same as the previous year, but lower than income-growth rates of 3–6% between 2013/14 and 2015/16. Looking back at the financial crisis in 2008, income fell by 4% 2008/09 but bounced back to similar levels of growth from before the crisis in 2012/13
- #17 In 2017/18, the public continued to be the largest income source for the sector, representing almost half (47%) of its income Income from the public grew by £1bn to £25.4bn, accounting for 83% of all income growth. This includes an increase of £629m in legacies, accounting for half of the increase in total income, which was largely due to two individual legacies. While donations remained stable, amounting to £8.8bn, earned income from the public grew by 3% to £12.6bn. This includes fees for services such as membership subscriptions and trading activities such as charity shop sales,
- #18 The amount of income from government, £15.7bn in 2017/18, has remained largely stable in recent years. But with income from other sources growing, income from government as a proportion of the sector’s total income has fallen almost continuously. Like the previous year, it is at its lowest-ever point of 29% of overall income since the start of the time series.
- #23 Net assets grew by 4% to £142bn, marking another record high. This was mainly due to growth in investments and falling liabilities. Investment assets make up two-thirds (67%) of the sector’s total assets. Although they continued to grow (+4%) and accounted for most of the growth in total assets, the increase is smaller than in the last four years when they grew on average by 7%. Grant-making foundations are most dependent on income from investments, it makes up 27% of their income compared to 8% overall
- #24 The sector’s level of reserves amounted to £63.5bn, reaching pre-2007/08 financial-crisis levels for the first time. About a quarter (23%) of organisations do not hold any reserves. The level of reserves can also be expressed in terms of the number of months of expenditure they would cover. On average, voluntary organisations hold reserves of around 14.8 months, but only around seven months when grant-making foundations are excluded.
- #25 On average, voluntary organisations hold reserves worth seven months of spending However, those figures differ by subsectors ranging from 71 months for research (includes Wellcome Trust which accounts for 34% of the sector’s reserves alone) To village halls with only 2 months of reserves in terms of spending
- #29 Since 2010, the number of people working in the voluntary sector has grown almost continuously. In 2019, a total of 909,088 people worked for voluntary organisations, representing almost 3% of the total UK workforce. Spending on staff costs makes up 38% of the sector’s total expenditure
- #30 The largest number of voluntary sector employees are working in social work (37%), 15% more than the previous year. Nearly a third of the sector’s workforce are employed in London and the south-east The majority of employees are women making up two-thirds (68%) of the workforce, similar to the public sector (66%) but higher than the private sector (41%) The voluntary sector workforce is slightly older than in other sectors and is predominantly white, with people from BAME backgrounds making up 9% of the workforce, lower than in the public and private sector (both 12%) and the UK as a whole (13%)
- #31 Voluntary organisations have a higher proportion of part-time employees than organisations in other sectors 37% of voluntary sector employees working part-time compared to 29% in the public sector and 25% in the private sector The voluntary sector also has the highest proportion of employees on temporary contracts with 8%, compared to the public and private with 7% and 5% The voluntary sector, like the public sector, relies on lower managerial positions more than any other occupation level, with 46% of the sector workforce made up of these positions.
- #35 Overall levels of volunteering have remained stable. More than one in five people volunteered at least once a month for a group, club or organisation. This equates to 19.4 million people across the UK 22% of people formally volunteered at least once a month
- #36 People aged 65–74 years old are the age group most likely to formally volunteer on a regular basis; more than a quarter (28%) volunteered at least once a month compared to 15–24% for all other age groups. Less regular volunteering is more evenly spread across age groups
- #39 Elizabeth outlined in her initial slides, some of the operational challenges facing charities of all sizes. To address these challenges, effective leadership is crucial. This will ensure that boards of trustees and their executive know what to focus on and are clear about their roles and responsibilities. To support with this, we have run 2 webinars on board leadership and key things trustees need to focus on. NCVO’s governance wheel is a great tool to help you develop good governance and effective leadership in your organisation. Completing it will help you understand what shape you board is in and also think about what steps you can take to improve. It goes without saying that it is crucial that you are aware of the financial support that is available to voluntary sector organisations to help them respond to covid-19. Government guidance provides a useful overview We have done two webinars on financial management and accessing government funds in partnership with Charity Finance Group. One on of these the National Lottery Community Fund spoke about the purpose of their funds and what they are looking for in an application. We have just launched our first online training on writing successful bids. With increased competition for limited funds, organisations are going to need to ensure that they know how to write a successful bid. The reality is that many organisations will be facing financial difficult and possibly insolvency – we recently updated our Knowhow guidance on this. On NCVO Knowhow we also have other guidance and tool to help you manage your finances and understand your income streams
- #40 Richard (Sarasin) to talk about Compendium of investment
- #41 Staff wellbeing has become a key concern for many organisations during this time. Over the last month or so we have been speaking to voluntary sector organisations from across the sector to find out how they have been managing the wellbeing of their staff. We have developed a blog sharing some of their tips and signposting to useful resources. We recently did hosted a webinar in partnership with our Trusted Supplier Croner addressing issues such as employee rights and furloughing; supporting staff remotely; and ideas for supporting the wellbeing of staff. Most organisations will be going through a period of significant operational change – with restructuring and redundancies being an inevitable for many. Knowing what process you need to follow in making redundancies and creating an environment of psychological safety for staff can be very difficult. To help you with this, at the end of July we are hosting a webinar on this in partnership with our Trusted Supplier, HR Services Partnership. As has been mentioned, in this ‘new normal’ the way in which people can engage in volunteering has changed and consequently volunteer-involving organisations have had to re-think how they engage and involve volunteers during this crisis. Our blog, provides some inspiration for how VIOs have gone about this. Webinar on 15 July, we will share what volunteering organisations have learned since the lockdown in March. The webinar will explore local and national efforts to tackle covid-19, how organisations have adapted traditional recruitment and induction processes for new volunteers, whilst continuing to engage existing volunteers during the hiatus. This webinar will include content from the National Volunteering Forum held on 18 June 2020. We have a range of guidance on key issues relating to involving volunteers during covid-19 on NCVO Knowhow