The last report from the Third Sector Trends Study has now been published. This longitudinal study provides a unique insight into the state of the voluntary and community sector in the North East over five years from 2008/09 to 2014.
This final report, funded jointly by Northern Rock Foundation and the Community Foundation, Tyne & Wear and Northumberland shows that the voluntary sector has in large part managed to sustain its work, despite enormous challenges and funding pressures over the last five years.
However, a key finding, which has significance for all public and charitable funders of the sector, is that although the majority of voluntary organisations are keeping income levels stable and in some cases seeing some rises in income, this isn’t an even picture across the region. Voluntary organisations located in the poorest areas are 4 times more likely to have lost significant levels of income in the last two years when compared with the richest areas - 30% compared to 7%. Medium sized organisations (those with an income of £50,000 - £250,000) are the hardest hit.
At a time when grants are becoming fewer, with the expected closure of Northern Rock Foundation, voluntary organisations are also reporting increasing reliance on grants, and a decrease in their contract income. Only 16% of voluntary organisations are actively engaged in bidding for or carrying out contracts, reflecting the fact that in general only larger organisations are in a position to be involved in delivering public sector contracts.
These findings highlight serious pressures on voluntary organisations working in the most deprived parts of the region and the danger of major contraction and closure of services for vulnerable people.
VONNE's Chief Executive Jane Hartley reacted to the findings:
"The inequalities agenda comes into play when we see that third sector organisations (TSO's) in the poorest areas were 4 times more likely to have lost significant income in the last 2 years compared with the richest areas. Alarmingly in this period of austerity measures and reduced public sector funding, 42% of organisations in the poorest areas said they were still heavily dependent on public sector funding as opposed to 10% in the richest areas. Given that local authorities are likely to experience greater levels of cuts in the forthcoming comprehensive spending review and on an ongoing basis, and with forecasts that the biggest impact will be in 2017, this is a worrying statistic."
Penny Wilkinson, Chief executive of Northern Rock Foundation said: “The Third Sector Trends Study is a major part of the legacy of Northern Rock Foundation. Our investment in this study provides the evidence to help policy makers and funders make informed decisions about where and how to fund and support voluntary organisations in the future.”
Tony Chapman, author of the report said : “Charities have borne the pressures of austerity better than many expected over the last five years, but those which are based in the poorest areas are definitely struggling more to maintain funding than charities in rich areas: this is a matter of real concern as they generally deliver to the most needy.”
North East Voluntary and Community Sector statistics
There are about 6,900 voluntary and community organisations in the North East*
- 57% are smaller voluntary and community organisations with less than £50,000 income
- 23% are medium sized organisations with £50,000 to £250,000 income
- 20% are larger organisations with £250,000 - £1m plus income
Voluntary and community organisations employ c. 36,000 people in full time equivalent jobs; about 3.1% of all regional employment
149,000 people volunteer in voluntary and community organisations
*This excludes smaller grassroots organisations (like scout groups and informal local clubs) which would more than double the number to about 15,000.
For further analysis from the Third Sector Trends study by topic there are a numbers of detailed reports available to download at no cost from the Northern Rock Foundation website
Read Jane's full analysis and reaction in her blog
Download Northern Rock Foundation Third Sector Trends August 2015