Total annual income for the UK charity sector has fallen for the first time in a decade, according to latest figures.

The NCVO’s 2023 Civil Society Almanac shows that the charity sector’s income for 2020/21 was £56.9bn, down on 2019/20’s figure of £60.5bn.

This follows a period of consistent growth since 2011/12, when the sector’s total income fell from the previous year’s tally of £50.3bn to £48.9bn.

The NCVO points out that this slump takes into account charity finances during the first full year of the pandemic.

During this period spending by charities fell by 8%, from £58.7bn in 2019/20 to £53.8bn in 2020/21, the charity sector infrastructure body added.

It also warned that the income of smaller charities is “shrinking at a much faster rate than that of larger organisations”.

A detailed breakdown of the decline in income shows that money from the public and investment fell during 2020/21, but income from the government is up, by 6% to £5.9bn.

There was a 14% fall in income raised from the public to £26.5bn in 2020/21. In the same year investment income shrank, by 15% to £4.5bn.

NCVO points out just that under half of all charities rely on the public for most of their income.

Growth in micro-charities

An increase in the number of micro charities, with an annual income of less than £10,000, is another trend during 2020/21, amid a decline in the number of small and medium sized organisations.

In 2020/21 there were 77,295 micro charities, which make up just under half (47.1%) of all charities. The previous year there were 74,242 charities of this size, making up 44.8% of all charitable organisations.

Also during 2020/21 it has emerged that 33.2% of all charities are small organisations with an annual income between £10,000 and £100,000, compared to 35.3% the previous year.

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