A review of overall grant expenditure made by grantmaking charities (this excludes operating charities whose grants will generally not be available for open application) has decreased for the top 500. This had been growing steadily since a dip of £1.58bn in 2003 – a period when the grantmakers were recovering from the aftermath of the dotcom fall-out. There is a strong likelihood of a further dip in 2009/10 as not all the accounts have come through to complete the current picture and because of the time-lag in grantmaking – some falls in 2008/09 could well be pushed into the 2010.

Mark Pincher, Charity Financials’ data editor points out that when the annual grant expenditure totals are compared with the proportion of total income received, “grantmaking commitments over the last year have led to a much greater proportion of overall income to be utilised as grant expenditure because of falls in income levels – this is a result of the adverse investment market conditions.” For example, in 2008/09, grantmaking expenditure was 87.4 per cent of total income, but back in 2004/05 it was only 66.8 per cent.

A detailed analysis of the top 500 trusts in the 2008/09 period in Charity Market Monitor (published in June 2010) revealed that the real underlying trend in grantmaking for that period was an average fall of 6.9 per cent in the amount given in grants, once the Big Lottery Fund was taken out of the equation (this has atypical spending patterns). Cathy Pharoah of the ESRC Research Centre for Charitable Giving and Philanthropy at Cass Business School explained: “The fall in investment income was one of the main contributing factors to lower grantmaking. Trusts which experienced a fall in grantmaking expenditure were more dependent on investment income and less dependent on voluntary income with those whose grantmaking stayed the same or increased.”

Data from CharityFinancials.com was used to analyse charities which actively seek voluntary income through fundraising, and it was found that the total number of employees has increased by 11,000 from 2004/05 to 2008/09.

Figure 1 shows that with the exception of one year in 2006/07, the number of staff increased each year with the greatest rate of growth experienced in 2008/09.

Increases have primarily been in operational activities, whereas increases in administration staff or fundraising staff have fluctuated over the five year period.

In 2007/08 the number of all types of staff grew over the previous year, administration staff by 2.5%, fundraising by 4.9% and operational staff by 5.0%. However in 2008/09, although there was an overall increase, the top 500 as a whole shrank admin and fundraising staff by 1.9% and 4.0% respectively, but increased operational staff by 4.4%.

Mark Pincher, Data Analyst at CaritasData comments: “These findings show that the primary focus during the recession has been providing services and operational activities rather than increasing fundraising activities. In last two years charities have endeavoured to deliver on their objectives at a time when funds have not been coming in at previous rates and demand for many charities services has increased.”

Charities that have the greatest changes in the number of employees include Save the Children (UK), the National Trust and Barnardo’s. A list of charities which had the greatest increase of staff numbers is shown in figure 2.

Analysis using data from CharityFinancials.com also shows that salary costs have increased at the same time as staff numbers are increasing. Salary costs have increased from £3.7 billion in 2004/05 to £4.4 billion in 2008/09 with the average cost per employee ranging from £19,900 in 2004/05 to £25,000 in 2008/09.

Figure 2: Charities with the greatest change in staff numbers

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For further information about these figures or other sector trends from CaritasData please contact Katy Dunningham: kdunningham@waterlow.com
Tel. 020 7566 8201

Notes to Editors:

About CharityFinancials.com
Powered by the CaritasData database and containing detailed financial breakdowns for the UK’s largest charities, CharityFinancials is an advanced online tool that enables users to interact and manipulate the latest financial information for 169,000 charities, using over 200 search criteria. To find out more or to request a demonstration go to www.charityfinancials.com.

About CaritasData
CaritasData provides in-depth financial data and analysis on the UK’s charities and other not-for-profit organisations, including universities, further education colleges, independent schools and housing associations. CaritasData defines the charitable marketplace through a range of data products, financial websites and magazines providing essential knowledge and insight on the charitable environment. For further information, visit www.charitiesdirect.com.