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Charity FundingPublished by: Key Note Publications Ltd Published: Sep. 1, 2005 - 137 Pages Table of ContentsExecutive Summary 1. Introduction REPORT FOCUS DEFINITION 2. Strategic Overview THE CHARITIES BILL Structural Reforms Public Collections Exempt Charities Excepted Charities COMMUNITY INTEREST COMPANIES Community Development Finance Institutions DELIVERY OF PUBLIC AND SOCIAL SERVICES MARKET DYNAMICS AND SEGMENTATION Market Sectors Total Industry Value and Growth Table 1: Income of Registered Main Charities in England and Wales (number, % and £m), June 2005 Table 2: Number of Registered Main Charities in England and Wales by Income Bracket, December 2000-2004 Table 3: Total Incomes of Registered Main Charities in England and Wales by Income Bracket (£m), December 2000-2004 Table 4: UK's Top Ten Causes by Number of Charities in Top 500 and by Voluntary Income (number and £m), 2003/2004 DISTRIBUTION Table 5: Source of Income to the Charities Aid Foundation Top 500 Charities by Type (£m and %), 2003/2004 COMPETITIVE STRUCTURE Table 6: Top 20 Charities in England and Wales by Income (£), Years Ending 31st December 2003 and 2004 Table 7: Income Composition of the Major Charity Subsectors by Type (% of income), 2002/2003 Table 8: Impact of the 2004 Asian Tsunami on Specific Fundraising Activities (% of respondents), 2005 ADVERTISING Table 9: Main Media Advertising Expenditure on UK Charity by Sector (£000), Years Ending March 2004 and 2005 Table 10: Main Media Advertising Expenditure of Charities with Expenditure Exceeding £1m (£000), Year Ending March 2005 THE CONSUMER Awards Business in the Community Awards for Excellence The Charities Aid Foundation Companies and Communities Awards Outstanding CCI Programme — Deutsche Bank Innovation — CCI With A Difference — Whitbread CCI Online Reporting — mm02 The Charity Awards The Queen's Award for Voluntary Service The Third Sector Excellence Awards The UK Charity Awards Industry Associations and Umbrella Organisations Association of Charitable Foundations Association of Chief Executives of Voluntary Organisations Association of Fundraising Consultants Charities Aid Foundation The Charity Finance Directors' Group Directory of Social Change Disasters Emergency Committee The National Council for Voluntary Organisations The Institute of Fundraising National Association of Councils for Voluntary Service MARKET FORECASTS Table 11: Forecast Income of Registered Main Charities in England and Wales by Income Bracket (£bn), 2005-2009 3. Fundraising Charities BACKGROUND The Givers Table 12: Profile of People Giving To Charity by Average Monthly Donation and Proportion Giving to Charity (£ and %) 2003 MARKET SIZE Voluntary Income Table 13: Top Ten Charities in the UK by Voluntary and Total Income (£m and %), 2003/2004 Table 14: Voluntary Income and Legacy Growth (%), 2000-2004 Table 15: Charities' Voluntary Income as a Percentage of Government Expenditure by Sector, 2002/2003 and 2003/2004 Strategic Funding Table 16: Projections of UK Strategic Funding to NACVS Members by Source (£ and %), 2003/2004 Table 17: Strategic Funding of Full NACVS Members by Local Authorities per Region in England (£), 2003/2004 Table 18: Total Local Authority Project Funding in Each Region (£), 2002/2003-2003/2004 CONSUMER TRENDS The Non-Givers WAYS OF GIVING Table 19: Ways of Giving — Research Findings of NCVO and CAF (%), 2003 Internet Giving Non-Cash Gifts Regional Variations Table 20: Regional Variations in Charitable Giving by Proportion and Amount (% and £), National Giving Week 2004 Charity Fashion MARKETING ACTIVITY BBC Children in Need Appeal Charity Flowers Direct Comic Relief/Red Nose Day Make Poverty History/Live 8 National Giving Week The Tsunami Appeal The Year of the Volunteer 4. Grant-Making Trusts BACKGROUND MARKET SIZE Table 21: The Trust Universe — Types (£m and %), 2002/2003 CONSUMER TRENDS a) Belief in the Cause b) Being a Catalyst for Change c) Self-Actualisation d) Duty and Responsibility e) Relationships MARKETING DISTRIBUTION Table 22: The Trust Universe — Funding Preferences (% of total expenditure), 2002/2003 Government Department Grants Department for Education and Skills Department of Health Home Office Office of the Deputy Prime Minister Government Offices for the Regions Department for International Development Lottery Funding Distribution Community Foundations 5. Corporate Funding and Financing BACKGROUND TAX INCENTIVES Money Secondment of Employees Gifts of Shares or Securities Land or Buildings Equipment or Trading Stock (Gifts in Kind) MARKET SIZE Table 23: Top Ten Corporate Donors by Percentage of Pre-Tax Profit Donated and Total Worldwide Community Investment (% and £m), 2003/2004 CONSUMER TRENDS Cause Related Marketing Corporate Charitable Foundations Advantages and Disadvantages of Creating Corporate Foundations Option — Donation to Existing Charity Option — Charity Bank Account Option — Trust Option — Company Limited by Guarantee Volunteering MARKETING AND PROMOTION DISTRIBUTION Employer-Supported Volunteering Payroll Giving Matched Giving 6. An International Perspective OVERVIEW MARKET DEVELOPMENTS COMPETITOR ENVIRONMENT Table 24: Percentage of Non-Governmental Organisations Working On Activity Types, 2004 Decentralisation SECTOR ISSUES 7. PEST Analysis POLITICAL FACTORS ECONOMIC FACTORS SOCIAL FACTORS TECHNologiCAL FACTORS 8. Consumer Dynamics OVERVIEW Table 25: Attitudes Towards Charity Giving — Summary of Findings (% of respondents), 2003 and 2005 DONATING TO CHARITY I Have Donated To Charity In The Past 6 Months (S1)/I Donate To Charity By Direct Debit Or Standing Order (S2) Table 26: Regular Donors (% of respondents), 2005 I Have Bought A National Lottery (Lotto) Ticket In The Past Month (S3)/I Usually Make A Donation To Television Appeals Such As Comic Relief (S4) Table 27: Responses to Popular Appeals (% of respondents), 2005 AD HOC DONORS I Gave To The Tsunami Appeal, But Nothing Else This Year (S5)/I Don't Really Think About What Charities I Support — If It Appeals To Me At The Time, I Give Money, Whether Through A Television Appeal Or Putting Money In A Tin (S6) Table 28: Ad Hoc Donors (% of respondents), 2005 SPONSORSHIP AND FUNDRAISING I Have Sponsored People Who Undertake Activities For Charity In The Past Year (S7)/I Have Raised Funds For Charity Within The Past Year (S8) Table 29: Volunteer Fundraising (% of respondents), 2005 REASONS FOR NOT GIVING Charity Begins At Home — My Family And I Need All My Spare Cash (S9)/Charities Don't Need As Much Money From The Public Now That They Get Money From The National Lottery (S10) Table 30: Reasons for Not Giving (1) (% of respondents), 2005 I Would Give More To Charity If I Knew The Money Reached The End Cause (S11)/I Would Give More To Charity If I Knew How To Give (S12) Table 31: Reasons for Not Giving (2) (% of respondents), 2005 ATTITUDES TOWARDS EXPENDITURE Charities Spend Money More Efficiently Than The Government Would (S13)/Charities Spend Too Much On Advertising (S14) Table 32: Attitudes Towards Expenditure (% of respondents), 2005 9. Company Profiles INTRODUCTION ACTIONAID Introduction Charity Objectives Services and Products Marketing Funding Partnerships and Networks Staff Financial Information Table 33: Financial Information for ActionAid (£), Years Ending 31st December 2002 and 2003 Future Plans BEATBULLYING LTD Introduction Charity Objectives Services and Products Marketing Funding Partnerships and Networks Staff Financial Information Table 34: Financial Information for Beatbullying Ltd (£), Year Ending 31st July 2004 Future Plans BREAKTHROUGH BREAST CANCER Introduction Charity Objectives Services and Products Marketing Funding Partnerships and Networks Staff Financial Information Table 35: Financial Information for Breakthrough Breast Cancer (£), Years Ending 31st July 2003 and 2004 Future Plans CHARITIES AID FOUNDATION Introduction Charity Objectives Services and Products Marketing Funding Partnerships and Networks Staff Financial Information Table 36: Financial Information for Charities Aid Foundation (£), Years Ending 30th April 2003 and 2004 Future Plans THE FAIRTRADE FOUNDATION Introduction Charity Objectives Services and Products Marketing Funding Partnerships and Networks Staff Financial Information Table 37: Financial Information for The Fairtrade Foundation (£), Years Ending 31st March 2002 and 31st December 2003 Future Plans THE VODAFONE GROUP FOUNDATION Introduction Charity Objectives Projects Partnerships and Networks Staff Financial Information Table 38: Financial Information for The Vodafone Group Foundation (£), Years Ending 31st March 2003 and 2004 Future Plans 10. The Future OVERVIEW Table 39: Forecast Income of Registered Main Charities in England and Wales by Income Bracket (£bn), 2005-2009 11. Consumer Confidence METHODOLOGY THE WILLINGNESS TO BORROW Table A: The Average Amount Consumers Are Willing to Borrow in Order to Purchase Expensive Items at Current and Constant May 2003 Prices (£ and £bn), May 2003, November 2004, February 2005 and May 2005 Consumers Willing to Borrow Table B: The Number of Adults Willing to Borrow in Order to Purchase Expensive Items (000 and %), May 2003, November 2004, February 2005 and May 2005 THE WILLINGNESS TO SPEND FROM SAVINGS Table C: The Average Amount Consumers Are Willing to Spend from Savings in Order to Purchase Expensive Items at Current and Constant May 2003 Prices (£ and £bn), May 2003, November 2004, February 2005 and May 2005 Table D: The Average Amounts Adults Are Confident Spending To Purchase Expensive Items (£ and %), May 2003, November 2004, February 2005 and May 2005 12. Further Sources Umbrella and Trade Organisations Publications General Sources Government Sources Other Sources Bonnier Information Sources AbstractIn 2005, two major pieces of legislation that will radically alter the way charities are administered are to come into effect. The first is the Charities Bill, the report stage of which is provisionally scheduled for 12th October 2005, and the second is the Community Interest Company (CIC) Regulations 2005 (see below).The main objective of the Charities Bill is to build public confidence in charity giving by tightening regulation. This Bill affects England and Wales, as charity law is devolved in Scotland and Northern Ireland. Scotland introduced its own Charities and Trustee Investment (Scotland) Bill in November 2004. The definition of a charitable organisation is also changing, with a responsibility to show interests in public benefit, the definition of which is being considerably widened. However, a further development in organisations serving the community is the creation of a new legal entity —the CIC. From July 2005, new companies may register as CICs with Companies House in the usual business forms — as a private company, limited either by shares or by guarantee, or as a public limited company (PLC) but with restrictions on the way funds may be distributed. While not enjoying the same kind of tax breaks as charities, regulation of CICs is intended to be lighter than that of charities. However, the restrictions include capped dividends to shareholders and `asset locks', which ensure that profits are distributed not to members but rather to the community. Both of these measures — along with the `make poverty history' emphasis taken by the Prime Minister to the G8 Summit in July 2005 — indicate that the current Government places a great deal of importance on creating strong frameworks for giving for both governments and individuals. However, research commissioned by Key Note exclusively for this report shows that the percentage of the population making donations to charity has dropped considerably. In 2003, 80% of the adult population had given to charity in the previous 12 months. In 2005, this figure had dropped to 66%. Furthermore, this figure could be much lower if those giving only to the tsunami appeal were discounted. There are also fewer responding to television appeals: just 22% of respondents agreed that they usually make a donation in response to a television appeal in 2005, compared with almost half in 2003.
Charities, especially charity umbrella organisations such as Charities Aid Foundation (CAF), are doing all that they can to make giving as easy as possible for donors and to provide as much reassurance that their donations are being spent wisely. The research shows, however, that these are not particular issues for donors — they know how to give.
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