New UK Almanac highlights importance of earned income

NCVO has just launched its 2017 UK Civil Society Almanac. It’s comprehensive, has lots of great infographics and is crammed with enough new facts and figures on income and workforce to make any data geeks out there go weak at the knees (the more maths-averse amongst you may get heart palpitations for different reasons). However the key messages behind the numbers are really pretty simple, and trends that we’ve seen emerge over the last few years continue to shape our sector’s future. The Almanac doesn’t separate out Scottish figures, but it includes data from SCVO and OSCR, and of course includes the big household name charities operating across the whole of the UK. There are some minor differences between the UK-wide and Scottish picture – for example, we don’t really have any ‘super-major’ charities up here - but the new UK figures and insights pretty much mirror what we've been seeing in Scotland. For me, the most interesting trend has to be the continued growth in earned income. The chart below shows that earned income increased by 35% between 2008 and 2015, and now accounts for 54% of the UK third sector’s income: In Scotland specifically we’ve seen similar growth. Excluding housing associations, 44% of the third sector’s income in Scotland now comes from selling goods and services, totalling over £2billion every year.  Three out of every five Scottish charities sell goods or services - anything from service charges, membership fees, ticket sales and rental income, to shop sales, café income and training fees. Many of those most successful at increasing earned income have been larger charities that have either been able to use their assets such as properties to generate income, or tap into the support and funds available for growing social enterprise activities. Small and medium-sized charities also sell goods and services, but often lack the cash flows, assets and business know-how to scale up activities. However, it is exactly these organisations which are really struggling to find funds, and many are dipping into their small and often already depleted reserves as they try to continue delivering services. In our recent Sector Forecast, two in five respondents said they plan to focus on business development in 2017, with one in three predicting that their earned income will increase. It looks like the importance of earned income will continue to grow as public sector funding stands still and organisations of all sizes strive to ensure sustainable income streams for the future. NCVO are calling for dormant asset money to be used to create endowment funds and to support smaller charities to buy local community assets. This would help local communities to develop and manage assets for future generations, as well as generate income.  I would support that call and also add the hope that the public sector and foundations continue to invest in the sector’s sustainability through capacity-building funding. As well as financial support, we need to ensure that the thousands of people who volunteer and work in the third sector have the skills and confidence to take on new challenges. There are many agencies and infrastructure bodies that can provide that support – Just Enterprise, Social Enterprise Scotland, First Port, the TSI network and Development Trust Association Scotland come to mind – and their role will be essential if the sector is to grow in a sustainable way. Find out what key findings stood out for the NCVO research team here: https://blogs.ncvo.org.uk/2017/05/09/what-does-the-new-uk-civil-society-almanac-tell-us/