NCVO’s UK Civil Society Almanac has provided valuable data, trends, and insights into the voluntary sector since 1996. Detailing the latest findings from 2020/21, this year’s report, launched in October 2023, shows how the pandemic affected the charity sector. Here are the three standout takeaways:
Small decrease in number of registered charities
The Almanac reveals that the size of the voluntary sector shrunk in 2020/21 by 1%, which contrasts with the growth experienced in 2019/20. During this time, the sector faced a triple edged sword – high demand, decreasing donations and stretched resources. The pandemic had a significant impact on charities’ financial wellbeing. 91% of charities reported experiencing difficulties and charity closures totalled 4,300. However, this was significantly lower than feared. Research conducted in 2020 had predicted that one in ten organisations would close! Although charity closures were less than what was predicted, smaller charities bore the brunt of these closures, which shows that the pandemic unevenly affected the sector. Next to this, the pandemic caused the number of newly registered organisations to dip below average. Unfortunately, the pandemic has only further compounded the effects of the current cost-of-living crisis. Closures totalled 5,500 in 2022.
Drop in income and expenditure
A staggering 60% of charities reported losing income, particularly smaller charities, as a direct result of the pandemic. Across the sector, there was a 6% decrease in income. As life came to a halt and uncertainty spread, the largest source of income, public giving, declined from 51% to 47% of the sector’s total income. With 54% of their income stream coming from public donations, this had a colossal impact on micro (income under £10,000) and small (income between £10,000 and 100,000) organisations. Conversely, during this time the government increased its funding by 6%. However, large (income between £1m and 10m) and major (income between £10m and £100m) charities were the main beneficiaries, sourcing 30% of their income from the government. In comparison, government funding constituted 15% of micro and small charities’ income. In 2020/21, small charities only held 3.6% of the sector’s total income despite representing 80% of registered charities.
Likewise, the sector’s total expenditure decreased by 8%. 16,000 charities reported no expenditure, the majority of which were micro charities. NCVO believes that adaptations to stay afloat, such as a shift to online activities and reduction in operations during the pandemic partly explains this decrease. Smaller organisations were the most likely to adopt extreme measures to maintain financial wellbeing, with some even bringing their operations to a pause. The pandemic did not restrict major and super-major (income over £10m) organisations’ spending habits to the same extent, as they were responsible for 55% of the sector’s total expenditure.
Increase in workers who have disabilities
When talking about the pandemic, it is easy to forget that it has provided some benefits. It has catalysed a change in our attitude towards work through the popularisation of flexible working. A Prospectus surveythat looked into the recruitment of charity workers with disabilities indicated that 50% of respondents believed that the pandemic encouraged the move to flexible working. It led to a 50% increase in the number of charities using technology to work remotely, something that people with disabilities have long awaited. Being able to adjust working hours and work from home may reduce the barriers that exclude people with disabilities from accessing a certain job. The Almanac reports that currently one in four workers in the sector discloses that they have a disability. This is an increase of 37% since 2016. In the same period, private sector workers with disabilities have only increased by 5%, representing only 18% of the private sector.
We can help
NCVO’s latest Almanac highlights how difficult the pandemic was for the voluntary sector, in particular for smaller charities. The fact that in September 2021 95% of charities reported that they were going to survive the COVID-19 crisis shows how resilient the sector is. Charities adapted so that they could continue providing support to beneficiaries during a time of crisis. Sadly, the nation is experiencing yet another period of uncertainty in the form of the cost-of-living crisis. The voluntary sector has been unable to take a breather.
If you need funding support of cost-of-living support, we have a resource hub here: Directory of Social Change – View our cost of living hub here (dsc.org.uk). You can also use our fundraising guides to help look for funding, whether you’re a charitable organisation or an individual in need.