Introducing the voluntary sector
Introducing the voluntary sector

This free course is available to start right now. Review the full course description and key learning outcomes and create an account and enrol if you want a free statement of participation.

Free course

Introducing the voluntary sector

2.1 Further sources of funding information

Annual reports are usually available on organisations’ websites – as in the example in Activity 2. As mentioned earlier, another way to find financial information on voluntary organisations is through charity regulator websites. The list below shows some sources of information within the UK.

Some small organisations do not have to submit returns, but it is still likely that they will produce a financial report for their members and other stakeholders.

Activity 3 How much funding?

Allow approximately 10 minutes

In this activity you will look at the financial information from two annual reports: the first is for Belfast and Lisburn Women’s Aid and is presented below.

Table 2 Belfast and Lisburn Women’s Aid incoming resources

Incoming resources 2013/14 £ %
Supporting people 863,073 39
Floating support 546,174 25
Trusts 160,254 7
Grants 397,280 18
Housing management 150,330 7
Donations 38,685 2
Investment income 35,587 2
Rental income 12,744 1
Utilities income 4548 <1
Training 6769 <1
2,215,444 100
(Belfast and Lisburn Women’s Aid, 2014)
Note: Floating support and supporting people are housing support programmes provided by the Northern Ireland Housing Executive, and also funded by health and social care and probation services.

The second set of financial information you will seek out for yourself. Look for the annual financial report for an organisation you are familiar with or interested in. You could search the organisation’s own website or one of the regulator websites listed above to find the relevant information about incoming resources.

Look at the income for the two organisations and then answer the following questions:

  1. What are the different sources of funding that the organisations have?
  2. What are the implications of these sources for them?
You can type text here, but this facility requires a free OU account. Sign in or register.
Interactive feature not available in single page view (see it in standard view).

Comment

For Belfast and Lisburn Women’s Aid, you already know from Activity 2 which organisations funded them during this time period. What this information now gives you is the form that the funding took: trusts, grants, donations, as well as investment and other income.

What is less clear from these accounts is who is providing the grants, for example. Also, ‘trust’ can refer to an organisation providing funding, so in these accounts ‘trusts’ probably means funding from organisations that are trusts.

The biggest sums are from supporting people and floating support, which are public sector programmes. Many voluntary organisations, like Women’s Aid, are also able to raise money from investments and rental income. General donations are important, although for this organisation they are just 2% of the total. You will look at these different sources in more detail in the next section.

Therefore, it seems that this organisation is primarily dependent on government funding, which could create problems for its projects, activities and general operation if there are cutbacks in public spending. In fact, in their report (p. 4) they highlight:

Our challenges ahead remain sustaining services amidst government cuts and imminent procurement and tendering processes.

(Belfast and Lisburn Women’s Aid, 2014)

In your own example report, the organisation might have distinguished between restricted and unrestricted funding. Restricted funding means that it can only be spent on the specific project for which the money was intended and the organisation has little flexibility in how this may be used. An example of this can be seen in the annual report of the Women’s Aid Federation in Northern Ireland (2014, p. 74). This is an overarching group supporting women and children who are victims of domestic violence. Their unrestricted funds were £80,576 and restricted funds £761,309 – which is quite a difference.

For Belfast and Lisburn Women’s Aid, although the main accounts do not distinguish between restricted and unrestricted funding, they mention in their written review of the year (p. 2) that they received funding from the Big Lottery to make one of their centres more energy efficient. This money would of course be restricted to this particular project and they would inevitably have to provide feedback on how it has been spent and the success of the project.

If you are new to looking for and making sense of financial information, hopefully it was not too difficult. Getting to grips with annual reports is an important skill but also increases your knowledge about sources of funding and the possible dependence – and therefore vulnerability – of organisations on particular sources.

Organisations are required to make this type of financial information freely available in order to be more transparent and ultimately more accountable. As you will see in Week 5, an organisation’s stakeholders need to know how money raised is being spent or invested appropriately – irrespective of whether this involves large or small sums. This is something that might interest you if you work or volunteer for an organisation, or if you support one as a donor, member or beneficiary. You will now move on to focusing on individuals’ funding of voluntary organisations.

VOLB_1

Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to university level study, find out more about the types of qualifications we offer, including our entry level Access courses and Certificates.

Not ready for University study then browse over 900 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus