Introducing the voluntary sector
Introducing the voluntary sector

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Introducing the voluntary sector

3 Income from individuals

Woman holding out her cupped hands, which contain coins.
Figure 3 Individuals provide substantial sums

There are really only four main sources of funding for the voluntary sector:

  1. individuals
  2. foundations
  3. public sector
  4. private sector.

Overall, individuals and the public sector are the biggest sources of income. In terms of how funding is actually given to voluntary organisations, it is generally through three main methods:

  1. donations
  2. grants
  3. contracts.

There are various sources of information about ‘giving’ to the voluntary sector, in particular the NCVO’s UK Civil Society Almanac 2015 and the annual Charities Aid Foundation’s (CAF) UK Giving Survey (2015). The information in this section is primarily from the NCVO (2015).

As noted earlier, income from individuals provides the largest proportion of income for the voluntary sector – 46% of total income. However, it is most important to the smallest organisations – those classified as micro and small – where it forms 56% of their total income. For the largest organisations – major – it is 44% of their income. Within the sector, some organisations such as parent-teacher associations are very dependent on income from individuals, where it forms 88% of their income.

Donations include voluntary income (donations and legacies) and earned income (sales of products and fees for events, etc.). Donations and legacies account for 37% of the total income from individuals. In terms of earned income, the majority of money comes from charitable trading (fees, training courses, admission charges or membership). The main causes supported by individuals are medical research, children and young people, hospitals and hospices.

Donations can be restricted or unrestricted but organisations need a balance of both, given that core costs need to be covered. Regular giving is valued by organisations as it gives some predictability. Donations are not necessarily restricted to individuals – organisations also donate money for specific projects or make one-off donations.

Activity 4 How to choose a charity

Allow approximately 10 minutes

Imagine you have £100 you want to give to a charity. Which charity would you choose and why?

In the box below is a list to guide your thinking. Next to each item type in a number from 1 to 4 to rank the reasons in their order of importance to you.

1 = the most important reason

2 = important reason

3 = not very important reason

4 = unimportant

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

You might, of course, have had other reasons or ideas that did not fit with the list provided. The choice of reasons in this list was based on research by Beth Breeze (2013). She conducted a study with 60 donors and asked them about how they decided which charities to support and why. Breeze concluded that ‘donors often support organisations that promote their own preferences, that help people they feel some affinity with, and that support causes that relate to their own life experiences’ (p. 180). She also found that people did not do much research themselves on which causes to support and were often influenced by the latest campaign on television and in newspapers or what came in the post.

Other reasons might be that you already volunteer or support the organisation, or that the organisation works locally. It is certainly difficult at times to choose between organisations: I support two charities on a regular basis because they did a ‘hard sell’ on me in the street. They fit very well with everything I believe in but of course there are many more similar charities that I could have chosen.

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