Resilience, Reserves and Cuts: Can the voluntary sector cope?

National Council for Voluntary Organisations

Resilience, reserves and cuts Can the voluntary sector cope?

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Our charities cover the credit crunch, not the (technical) recession

-6

-5

-4

-3

-2

-1

0

1

2

3

4

Sept 06

Dec 06

Mar 07

Jun 07

Sept 07

Dec 07

Mar 08

Jun 08

Sept 08

Dec 08

Mar 09

Jun 09

Sep 09

Pe

r c

en

t c

ha

ng

e, y

ea

r-o

n-y

ea

r

Quarter

Dec: End of recession

Dec09

June: Brown new PM

Aug: Credit crunch begins

Quarter 2: Unemployment

starts to rise

Dec: Interest

rates 2%

Nov: VAT cut to 15%

Oct: Icelandic banks fail

April: Spending period 2008-11

begins

Sept: Northern Rock fails

Almanac data 07-08 UK Giving data 07-08

The estimates in this slide pack refer to the voluntary sector only – based on the general charities definition

1. Context: has a growing sector become a more resilient sector?

The slowdown in expenditure growth may indicate activity levels have peaked…

Tangible Fixed Assets: £21.1bn

Investments: £68.8bn

Intangible Fixed Assets: £19m

Fixed Assets: £89.9bn

Current Assets: £21.7bn

Income from investments & cash in bank: £3.2bn

Investment management costs: £459m

What do the sector’s assets look like?

Fixed Assets•Intangible assets •Tangible assets•Investments

Current Assets•Stocks•Debtors•Cash

Short-term liabilitiesLong-term liabilities

Net Assetsor

Total Funds

Free reserves = Net Assets minus

• Tangible Fixed Assets (Buildings, Equipment)

• Unexpendable endowments

Free reserves are what voluntary organisations need to cover unexpected changes in income

Reserves

Free reserves

1.4

4.1

4.5

4.6

4.8

5.0

6.3

6.5

6.7

6.8

8.0

8.0

9.2

9.5

18.2

19.9

44.3

74.7

0.0 20.0 40.0 60.0 80.0

Playgroups and nurseries

Umbrella bodies

Employment and training

International

Law and advocacy

Parent Teacher Associations

Culture and recreation

Village Halls

Development

Scout groups and youth clubs

Social Services

Health

Education

Environment

Religion

Housing

Grant-making foundations

Research

Months

For a free paper A2 poster of this infographic, email research@ncvo-vol.org.uk