Level and sources of VCS income

Following a decade of increasing income for the VCS, future funding streams are uncertain. Total income rose to £35.5 billion in 2007/8, the latest year for which figures are available. The largest sources of funds are donations, legacies and fundraising from individuals (£13.1 billion) and grants and contracts for service delivery from statutory sources (£12.8 billion). During the recession, individual giving declined, but it is now growing again, although it has yet to reach its peak. Constrained public spending means that funding from statutory sources will fall, especially grant funding, but other reforms mean that there may be more opportunities to bid for contracts (see public service delivery).

What are the implications?

  • Ever increasing competition for funds from all sources, both from new and existing VCOs.
  • A risk of a reduced level of charitable activity.
  • Greater emphasis on organisations to achieve efficiency and value for money.
  • Increased pressure on fundraisers to raise money in a difficult economic climate.
  • Increased expectation of VCOs to trade and charge for services to diversify their income sources (see social enterprise)
  • Higher expectations of evidence due to competition for funds, more strategic funding and increased involvement in public service delivery.
  • Increasing need for VCOs to understand the full range of funding sources available to ensure a sustainable funding mix - from social enterprise to loan finance.

Moving forward

How will your organisation cope in a difficult funding environment? Can you meet the challenge of even stiffer competition for funds?

  • Can you persuade individual donors to give more to your cause to replace lost statutory income?
  • If you are seeking corporate partners or trust funding what is it that distinguishes your project from the many others seeking funding?
  • How do you balance your mission and costs with the aims of funders in order to secure funding?

What steps should you take to cope with the risk of a reduced income in future?

  • Do you know which services are most valuable to your beneficiaries - what will you do if you can't raise funds to provide these services?
  • Do you need to review your fundraising strategy?
  • Can you save money and maintain the same level of service?

Want to know more?

NCVO Sustainable Funding Project

Published by: NCVO

Format: Web

What is it? The NCVO team provides advice and support to help organisations develop sustainable funding streams.

How useful is this? They have ten years experience in this field and there is a wide range of information and tools available to help. This page provides a links for all of the major sources of funding, including fundraising and public service delivery.

NCVO Civil Society Almanac 2010

Published by: NCVO

Date: Spring 2010

Format: PDF

What is it? A summary of the findings from the NCVO Civil Society Almanac 2010

How useful is this? This outlines the trends in income and expenditure, the trends around assets, employment and volunteering. The full Almanac contains an in depth analysis of the finances of Civil Society in a clear visual style. All of the data tables and charts from the almanac are available to download from the NCVO website for use in presentations or your own work.

Other Comments: The in-depth Almanac is available to purchase from NCVO, and is free to NCVO Members.

UK Giving Survey 2010

Published by: NCVO / Charities Aid Foundation

Date: December 2010

Format: Web / PDF

What is it? The NCVO and CAF's research on Giving.

How useful is this? The full UK Giving 2010 report can be downloaded from this page. The report is based on a representative survey of UK adults, and shows a slight recovery in giving in 2009. There is also a link to a slide pack that pulls together other research on giving. This page will be updated with all of the latest research on giving.

Last updated at 16:59 Thu 03/Feb/11.

Recent comments


In a period of recession the level and sources of VCS income may come under threat. This could result in more pressure and demands on funders and commissioners.

Mental health service providers as other vcs organising may face increased competition for less funds. Providers may also be faced with looking at developing relationship with a broader range of funders than traditionally. In a time of pressure funders may be increasingly likely to look for collaboration between organisations in order to meet complex needs. Another aspect funders may find increasingly important is evidence of user involvement in the planning and delivery of services.

Collaboration can be challenging. Trustees and senior staff may find it useful to consider developing their negotiation and relationship building skills.

Does your organisation have a proactive strategy to approaching other organisations with potential collaborations?

Would your organisation benefit form reviewing your user involvement strategy and practices?

How will any change on the level and sources of vcs income affect your organisation? Do you have an up to date funding / fundraising strategy, and robust plans?

Join the discussion!

How will this affect your organisation? Have you considered it during your strategic planning? Can you share any interesting relevant links?

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