Headlines: June 6th, 2007



Research today raises doubts over claims that charities are becoming less independent as they become more involved in delivering public services. The 2007 Almanac, a comprehensive overview of charities and their work, shows that Government funding to the voluntary sector has increased by only 1.5 per cent since 2001, though there has been a shift from grant support to payment for contracted work.

The National Council for Voluntary Organisations says the research challenges recent reports that big rises in Government funding for charities are eroding their independence. NCVO Chief Executive Stuart Etherington said, “This research pours water over claims that charities are becoming semi state bodies due to massive influxes of state funding. It does, however, show that government is moving away from grant funding towards awarding contracts to charities for delivering public services.”

The Almanac shows that grants represented 52 per cent of Government funding to charities in 2001-02, but only 38 per cent in 2004-05. In the same period contracts have increased from 48 per cent to 62 per cent. The study shows larger organisations appear to have benefited most from this switch, with more than a third of Government funding going to organisations with incomes of more than 10 million pounds. By contrast, just 0.4 per cent went to those organisations with incomes of up to ten thousand pounds.
The Almanac also claims the period under review has also seen the emergence of a ‘premier league’ of 18 charities that together generate an eighth of the sector’s income. In fact the amount generated by organisations with incomes of up to 10 million pounds fell during 2004-05. More than eight out of ten organisations in the sector have incomes of less than 100,000 pounds but generate less than seven per cent of the sector’s income.

Smaller organisations, the Almanac says, are struggling to keep pace. Barbara Magowan, Project Manager at Kairos Women Working together, a small, organisation that works to reduce poverty and promote the good health of women involved in prostitution in Coventry, for example, said, “As an organisation offering holistic support to women caught up in prostitution, we find that statutory services do not recognise our contribution because we don’t fall neatly into any of their categories. The majority of their funding goes to larger, single issue charities.”

Other key findings show the income of charities is continuing to rise and now stands at 27.7 billion pounds, and they are becoming more efficient with more than 84 per cent of income being spent on charitable activities.