The Charity Commission, the regulator of charities in England and
Wales, has analysed data drawn from annual
returns for the financial year ending 2023 – the most
comprehensive dataset available to the charity
sector.
Collectively charities that submitted annual returns spent £95.73
billion delivering their charitable aims in 2023, 9.6% more than
in 2022, reflecting a further broadening and deepening of the
vital societal impact of charities. This was during a period when
cost of living pressures were being felt acutely within
society.
This impact is underpinned by the generosity of the public, with
donations and legacies reaching £31.4bn – almost a third (32.6%)
of all charity income. Small charities, which are by far the
greatest in number, largely rely on this income.
Businesses also made a considerable contribution to charity with
almost half (49.7%) of charities with an income of £100k or more
reporting donations from a corporate donor.
The data underlines that volunteers are essential to delivering
public good, outnumbering paid workers by a factor of more than
3:1. Around 7 in 10 charities reported they were supported by
volunteers in 2023, while 5 in 10 had paid workers (permanent or
fixed-term employees and self-employed). The majority of paid
workers (98%) were deployed in the UK.
However, for a second year in a row, the analysis drew out some
indicators underlining concerns about financial resilience in
parts of the sector.
Overall growth in expenditure (9.6%) outpaced growth in income
(6.8%) leaving the gap between the two at its narrowest in five
years at £0.7bn, down from £2.9bn in 2022.
While more than half of charities (55.1%) have more income than
expenditure, around 2 in 5 charities (42.6%) had expenditure that
exceeded income. This situation leaves many charities with little
or no headroom for investing in longer term or more innovative
projects, and depending on reserve levels, a continuation of this
trend may mean some charities cease to operate altogether.
The data follows the Commission's release of separate data
earlier this week pointing to increased demand for charities'
services, with 9% of people indicating they had received food,
medical or financial support from charities, compared to just 3%
five years ago.
Charity Commission Chief Executive, David Holdsworth,
said:
Our analysis of charities' annual returns for 2023 shows the
sector is not just delivering life-changing impact across
communities but that it is an economic powerhouse for the
economy, spending almost £96 billion a year on delivering
charitable purposes.
Charities' work with those from some of our most marginalised and
disadvantaged communities unlocks potential, enabling more people
to play an active role in society, helping people up, not handing
out. This vital work is happening right across England and Wales,
often in places and with people the state cannot easily
reach.
While our data shows the cost of living crisis has applied
significant pressure on charity finances – with the narrowest gap
between income and expenditure in recent years – it also shows
charities rising to the challenge, spending almost ten per cent
more in 2023 than in 2022 to meet increased need.
Each question asked of charities in the annual return is designed
to enable the Commission to identify risks and trends in the
sector; to help the public make informed and confident choices
about charities; and to allow policy-makers, researchers, sector
groups and the public to gain a richer understanding of the
charity sector in England and Wales.
ENDS Notes to
editors
-
The annual return 2023 represents the most comprehensive data
set available on the charity sector, as it is a statutory
requirement for charities to provide this to the Commission.
The Commission's analysis of the annual return 2023 is a
factual presentation of the data charities have reported to
the Commission for 12-month financial periods ending at any
point in 2023. Annual Return data is a ‘lagging indicator' as
the information it captures has passed as each charity has up
to 10 months to report it after the end of its financial
year. AR23 saw an improved number of charities filing returns
than in AR22.
-
All registered charities must provide information annually to
the Charity Commission (‘the Commission'). The rules vary
according to the charity's size and structure. Registered
charities with:
-
income up to £10,000 should complete the relevant sections
(income and expenditure) of the annual return
-
income above £10,000, and all Charitable Incorporated
Organisations (‘CIOs'), must prepare and file an annual
return
-
income above £25,000, and all CIOs, must also file copies of
their trustees' annual report and accounts
For further information see the Commission's guidance on how
to prepare a charity annual
return.
