Giving back

Think tank: Social Market Foundation

Author(s): Gideon Salutin

April 17, 2023

This report from UK think tank the Social Market Foundation looks at how to foster a stronger and more resilient charity sector.

This report from the Social Market Foundation think-tank assesses the state of the UK’s charity sector, suggests ways in which government can protect its long term viability. While charities showed great adaptability in the face of the pandemic, the cost of living crisis may prove even more challenging. Larger charities have fared better than smaller ones, when it comes to recent shocks: Charities with a turnover of over £1 million have seen their budgets grow by 28%, adding over a billion pounds a year, but smaller charities (income under £100,000) have lost 26% of their budgets. Since 2010, private donations have offset lost government funding – but it is unclear how long this can last: Polling evidence finds that 41% of Brits are donating less than they were three years ago, and majority (80%) blame rising inflation for their decision to donate less.

Proposed measures to instill long-term planning and sustainable financial opportunities across the third sector include:

  • Financial support in the form of a new fund providing competitive grants exclusively to micro and small charities, which often provide services in isolated communities.
  • Coordination with the public sector at national, subnational, and local levels to improve service delivery.
  • Proportionate regulation should replace existing rules, which would mean cutting red tape for small charities.