Key financial trends in 2026

2026 Overview: The sector continues to grow financially, but resources are not keeping pace

• Over the past decade, the Scottish charity sector’s income and expenditure have risen by nearly 80%, increasing from just over £5bn in 2015 to just under £10bn in 2025.
• However, this picture of strong growth is somewhat illusory.
• Almost half of the increase in income and spending reflects the need to keep pace with inflation. Much of the remainder is driven by rising costs—particularly in areas such as staffing, insurance, and utilities.
• The number of organisations has grown only slightly over the last decade, albeit with some minor shifts in the sector’s composition. More critically, the paid workforce has increased by just a few thousand (around 10%) over the same period, while the number of volunteers has declined slightly.
• Taken together, this suggests that, despite strong financial growth, the sector is facing high levels of demand without a corresponding increase in capacity.

Next steps: over summer 2026, we will examine income and spending patterns to better understand the drivers behind rising expenditure and the growing number of organisations ending the year in deficit.

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Income and Expenditure

The Scottish charity sector's income in 2025 was £9.5bn in 2025.

The sector's income increased in cash terms by £550m between 2024 and 2025. However, once we adjust for inflation, real term growth was only around £250m.

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While the sector's income has grown over the last decade, expenditure has grown even more, closing the gap between between income and spending.

Rising costs have been a key driver behind the rise in expenditure, for example: inflation, rising staff costs including increased Employer National Insurance Contributions (ENICs), rising energy bills etc (see the Scottish Third Sector Tracker and Rising Costs paper).

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Surpluses and deficits

44% of Scottish charities spent more than their income in 2025.
We have seen a rise in the number of charities spending more than their income in recent years . This includes an increase in the number of Medium and Large charities in deficit.

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Number of organisations

There were over 46,500+ voluntary organisations active in Scotland in 2026.

This figure has remained pretty much unchanged for the last decade, although we have seen some minor shifts within that number, e.g. a growth in CICs (Community Interest Companies) and some evidence of a slight increase in the proportion of groups becoming more formalised and registering as charities, particularly as SCIOs (Scottish Charitable Incorporated Organisations).

Paid staff and volunteers

Scotland’s voluntary sector employs over 136,000 people - 5% of the Scottish workforce.

• The paid workforce has increased by just a few thousand (around 10%) over the last decade.
• The number of paid staff has remained flat for the last 5 years, despite income and expenditure increasing by over £2.5bn since 2020.

The number of volunteers has seen more volatility, with a steep drop following Covid compounded by the cost-of-living crisis. The number of formal volunteers fell below 1 million in 2022 to 2023. Volunteering has now made a welcome recovery, giving cause for cautious optimism, but numbers remain slightly below 2015 level

See Volunteer Scotland's analysis for more on volunteering.

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Next steps

Over summer 2026, we will analyse hundreds of charity accounts to identify where these large increases in income are coming from, i.e. funding sources and destinations.

We will also examine spending patterns to better understand the drivers behind rising expenditure and the growing number of organisations ending the year in deficit.