Charities benefiting from low inflation, Income Spotlight Report finds

Published: Thursday 7 May 2015 - 12:30

Comprehensive review of charity accounts reveals 5% revenue rise

 

Charities' most recently reported incomes have grown by 5.0% between September 2014 and March 2015, up from 4.2% in the same period of 2013/14, according to the latest Charity Income Spotlight report from ACEVO Partner Charity Financials sponsored by Investec Wealth and Investment Limited.

The report, which uses data from the Charity Financials data tool to track income levels, finds that recent falls in inflation have greatly benefitted the sector’s performance in real terms. It reveals that when adjusted for inflation, the sector’s turnover grew by 4.2%, compared to just 2.4% in the corresponding period of 2012/13.

Elsewhere, the report highlights the performance of trading income, with this stream up 6.0% over the year to March 2015 even after adjustment for inflation. The report includes an analysis of how the Canal & River Trust grew its income by 30% and an update on charity shops’ performance from the Charity Retail Association.

Other findings include:

  • Each of the four main income streams have grown substantially in the past six months – voluntary income performed the best, up 4.9%, but investment, trading and charitable activities income all rose by more than 3.8%. 
  • The sector’s overall growth continues to mask the differing experiences of larger and smaller charities – while those in the £50m+ and £10m - £50m groups grew their incomes by 6.7% and 5.4% respectively, only one of the four smaller categories managed more than 1.2% growth.

Speaking about the findings, Mark Pincher, Data Editor and Development Manager for Charity Financials, said:

The economic environment is clearly still challenging for charities – the public funding squeeze shows no sign of easing and smaller charities are struggling to match the growth achieved by larger ones.

But within context, it is positive that the sector has grown faster than it did last year and that recent falls in inflation should help each pound goes further."

The Charity Income Spotlight Report is ready to download here.