June 18, 1998 | Read Time: 2 minutes
The 500 British charities that raise the most in private donations saw their income grow to 4.4-billion pounds ($7.2-billion) last year — a gain of 11 per cent from 1996 after adjusting for inflation, says a new report. The study suggests that British charities are enjoying renewed gains after several years of modest growth.
The largest single-year increase of the decade was not the result of greater charity spending on fund raising and publicity: That figure remained constant at 8.8 per cent of income, according to the Charities Aid Foundation, which is publishing the report later this month.
Instead, much of the growth resulted from large increases in earned income, gifts from individuals, and fees for services paid by the national government, which has hired non-profit organizations to provide many social services.
Meanwhile, grant income from both local and national governments declined, as did revenue from the National Lottery.
Large charities benefited from economies of scale in controlling management costs: Over the past five years, charities with incomes of 20-million pounds ($32.6-million) or more had administrative costs of around 5.1 per cent, while those with incomes of less than 1-million pounds ($1.6-million) spent an average of 14 per cent.
The study also reports on a novel attempt to measure the aggregate value to society delivered by Britain’s non-profit organizations. A team of economists asked charity beneficiaries what they would accept as compensation if such services were no longer available to them, and also asked donors and the public what price they would be willing to pay for the services if charities no longer provided them.
Their conclusion: While charities receive 16-billion pounds ($26-billion) in income, they produce services “worth” 22-billion pounds ($36-billion) — providing an “added value,” therefore, of nearly 40 per cent.
The top five charities at raising money remained the same last year as in 1996: Oxfam led the pack, with income of 89.2-million pounds, followed by the National Trust, which promotes natural and historic preservation (84.8-million pounds), the Imperial Cancer Research Fund (73.9-million pounds), the Cancer Research Campaign (69.2-million pounds), and the British Heart Foundation (65.2-million pounds).
Rounding out the top 10 were the Salvation Army; the Royal National Lifeboat Institution, which provides maritime search-and-rescue services; Barnardo’s, which helps disadvantaged youths and families; Help the Aged; and SCOPE, which helps children with cerebral palsy.
Corporate grants to charity rose about 4 per cent in real terms between 1996 and 1997 — less than half the 9-per-cent rate of growth for the previous year. But, when product donations and other in-kind gifts are mixed in, corporate contributions grew by 6.5 per cent.
Copies of Dimensions of the Voluntary Sector 1998 are available from CAF Management Services, 225 Peeke Avenue, St. Louis 63122; (314) 909-1160. The price is $59.95 postpaid. Copies are also available through the Charities Aid Foundation’s World-Wide Web site at http://www.charitynet.org/bookstore.
