Cuts will have an impact on charities

Tuesday June 7th, 2011

Around one third of voluntary and charitable organisations in England receive public money to support their work and over 20,000 organisations say that the public sector is their most important source of income according to initial findings of research funded by the Economic and Social Research Council (ESRC).

Professor John Mohan of the Third Sector Research Centre, who led the study said: “It is very clear that public funding is more important to voluntary organisations than previously thought.”

The study shows that almost 70% of third sector organisations working with socially excluded or vulnerable people receive public funding; and 60% of those working with offenders, victims of crime and people with mental health needs also receive state support. Furthermore, over 50% of voluntary organisations whose work includes helping the homeless and asylum seekers also rely on government funding.

The study also finds substantial regional variations in the extent to which third sector organisations receive public funding.

Just over a third of organisations in London and the south-east receive state funding, compared with 42% of organisations in the North West and 43% of organisations in the North East. In addition, in disadvantaged areas of the Midlands and the North, the proportion of organisations that describe the public sector as their most important source of income is around 30%.

Previous research looking at total amounts of public funding found it to be concentrated in a small number of large organisations. Indeed, the larger the organisation, the greater the likelihood of receiving state support – two thirds of organisations with income over £5m receive public money. Conversely, organisations whose income is under £10,000 per year are much less likely to draw on public sector funding.

Among the 36% of organisations that receive state funding, a fifth described donations and fund-raising as their most important source of income.

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