Charity Income Increased In 2024, But The Sector Remains Vulnerable

The Charity Commission has just published its analysis of charities' annual returns for the financial year ending 2024. 

While the data shows that overall charity income increased compared to the previous year by 5.6% - reaching £102 billion - it also highlights the sector's vulnerability and the financial pressures it's facing.

Sources of income and the importance of public generosity

The Commission's analysis provides a clear picture of the sector's main sources of income. 

The report shows that nearly half of the total gross income (around £50.05 billion) was generated through charitable activities, which may include for instance charities charging fees for their services or receiving payment for goods. Donations and legacies accounted for a further 31.64% (around £32.4 billion) of the overall income, showing that public generosity still plays a vital role in supporting this sector. The remaining income came from trading activities, investments, government contracts, and other miscellaneous sources. 

Regional disparities

The report reveals that the proportions of sources of income differ significantly between England and Wales, when considering income from charitable activities, donations and legacies. Charities in Wales received roughly half as much more of their income from charitable activities and about a third less from donations and legacies compared with the overall averages of charities in England and Wales. The Commission's report explains this difference with the fact that Welsh universities appear on the charity register, unlike in England. The report further highlights that in Wales, statutory services are more likely to be delivered by the voluntary sector. 

Together, these patterns reveal the diverse ways charities can generate income and the extent to which the sector remains heavily dependent on public and corporate donations. 

Greater domestic focus of resources

The analysis doesn't just look at charity income and expenditure in England and Wales. To increase transparency around the flow of international charitable funds, charities were asked to also disclose their overseas income and spending, including the values and the countries involved. 

The data shows that charities spent £100 billion on delivering their charitable objects, and the figures indicate that the vast majority of this charitable expenditure (89.55%) supported UK communities. However, the remaining £10.88 billion of charitable spending was directed overseas. Overall, the top recipient countries were the United States, Switzerland and India. 

The analysis also explains that although charities spent around almost £10.88 billion on overseas activities, they also reported an income of £10.46 billion linked to activities abroad - which indicates broadly comparable levels of international income and expenditure.

Taken together, the data highlights that the vast majority of charitable money stays within England and Wales, and even charitable money spent abroad is matched with a broadly balanced pattern of income from overseas.

It's not just about the money

The Commission’s analysis also examines the number of people working or volunteering with charities in England and Wales. 

While the number of volunteers increased slightly compared to the previous financial year by 58,188, the number of paid employees fell sharply, decreasing by 139,725. Less than half of the charities have engaged people in paid work, showing that there were 3.8 volunteers to every 1 paid worker across the sector. 

This shift in the workforce might be a reflection of the continuing turmoil and real financial pressures the sector is facing, and the increasing need for charities to rely more heavily on volunteers rather than on paid employees. 

Financial resilience?

The Commission's detailed report also looks at the sector's financial resilience. In summary, the report finds that more than half of charities (56.86%) had more income than expenditure, while around 40.55% of charities had more expenditure than income. The Commission highlights that such charities are facing an 'ongoing risk to operational sustainability'. 

David Holdsworth, CEO of the Commission concluded:

"Charities across England and Wales continue to make a huge impact and this analysis of charities’ annual returns underlines their significant social and economic contribution at a local, national and global level. … But charity leaders up and down both countries continue to tell us they are under considerable financial pressures. This has an ongoing impact on their ability to deliver, which is felt keenly by the communities they serve." 

What comes next

The totality of the annual return analysis demonstrates that the role of charities in society is continuing to expand. As public services face serious mounting pressure, charitable organisations and the services they offer are increasingly being looked upon to fill these gaps. The latest introduction of changes to the Employers’ National Insurance Contributions scheme in April 2025 is just one of the many things that further intensifies pressures faced by charities. Many charities not only had to reduce their headcount but also scale back their services. 

It is important that both policymakers and the wider public truly appreciate how vital charitable organisations are to communities across England and Wales. 

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