Industry Snapshot
Charities
A concise intelligence brief on the Charities sector — covering market size, key trends, regulatory context, and business opportunities across the UK. Published by poundswise.
Introduction
The UK charity sector involves the work of thousands of not-for-profit organisations providing a diverse range of initiatives that benefit the public. Many charities work with specific community groups, such as young people, the elderly, people with health conditions, and disadvantaged and underrepresented groups. Some charities focus on specific causes, such as medical research, animal welfare, homelessness or overseas aid.
While the amount donated by the public to charities has increased over the last five years, charities still face a number of challenges that threaten the sector's outlook. These include cuts in public funding, growing demand for services, and rising costs.
Industry at a Glance
1,553
Year-on-year fall in number of charities in 2023
£88bn
Registered charities' income in 2022/23, up 5% year-on-year
£13.9bn
Donated to charity in 2023, up 9.4% year-on-year
£65
Average monthly donation in 2023, up 8.3% year-on-year
Charts & Data
Top Charitable Causes by Donations Received
- 1
Religious organisations
- 2
Children / young people
- 3
Animal welfare
- 4
Food banks
- 5
Overseas aid
Charities by Turnover
The majority of registered charities are small organisations. A small number of large charities account for the majority of total sector income.
Under £10k
Very small charities
£10k–£100k
Small charities
£100k–£1m
Medium charities
£1m–£10m
Large charities
Over £10m
Major charities
Industry Trends
- —
31% increase in amount donated to charities between 2019 and 2023.
- —
15.8% increase in registered charity income between 2017/18 and 2022/23.
- —
12% fall in proportion of people who give to charity between 2018 and 2022.
- —
11% fall in proportion of people engaged in volunteering between 2018 and 2022.
Industry Outlook
Charities 'leaking' revenue
Charities across the UK are losing out on around £5.9 billion of income each year due to revenue leakage. A lack of oversight, human error and poor processes are some of the main causes. One in five charities are also unable to state how individual donations are spent, which can discourage people from donating.
Free mentoring for small charities
A Charity Mentoring Network has been set up to support charities across the UK. Through the network, charities can sign up as mentors or mentees via an online platform. Mentors will provide advice on a range of practical topics such as organisational development and engaging volunteers. Small charities can use the service free of charge.
Increasing investment in digital tech
More charities are planning to adopt new digital technologies to increase engagement with supporters and make it easier to donate online. The use of virtual reality to help donors 'experience' a fundraising cause is expected to increase, while more charities are also developing smartphone apps with in-built donation options.
Charities hit by local budget cuts
A growing number of charities could be forced to cut services or close altogether due to the impact of local authority budget cuts. Many local authorities are making funding cuts to balance budgets and address deficits. As a result, charities are receiving less funding from local authorities to deliver projects and services in the community.
Skills shortages intensifying
Many charities are struggling to attract and retain skilled staff, which is putting their ability to deliver key services at risk. Being unable to offer a competitive salary compared with the private sector is one of the main reasons. High levels of staff burnout and limited career progression are also challenges.
Online community to boost tech take-up
Microsoft has set up an online community space for charities and other non-profits to discuss technology. Microsoft Nonprofit Community includes discussion spaces where organisations can learn about AI, strategy, leadership, fundraising and programme management. Webinars, learning resources, blogs and events are also available.