Charities increasingly reliant on State money

Charity income has risen steadily year-on-year since 2019, showing an overall increase of 23.7% by the end of 2022, according to a Charities Regulator report analysing a sample of registered charities in Ireland.

These increases are not spread evenly across the sector, and some charities have seen a decrease in income.

Income

Reliance on the public purse as the sole or main funding source is increasing, with the number of charities in this cohort rising by 12% since 2019.

State bodies, such as Government departments or local authorities, are by far the highest of source of charity income.

Income from the ‘public purse’ – Government departments, local authorities and other public bodies such as the HSE and Pobal – increased every year over the four-year period in scope, with the greatest rise seen in the first year of the COVID-19 pandemic.

The number of charities in receipt of public funding has also risen in the same period. When averaged, the increase in Government or local-authority funding between 2019 and 2022 was close to 25%, with funding from other public bodies increasing by over 4%.

Income from commercial and trading activities saw the sharpest drop between 2019 and 2020, falling by 16%.

By 2022, however, income from these sources was showing a rise of over 16% onpre-pandemic levels.

The greatest level of increase was from philanthropic organisations, which saw an average rise of over 37% between 2019 and 2022.

The number of charities reporting income from this source rose by 14% in the same period.

Income from donations fell in 2020 but has recovered, and is exceeding pre-pandemic levels, if bequests are included.

Donations down

Not all types of donations have returned to pre-pandemic levels.

Some of the rise in public funding was a result of eligible charities availing of the Employment Wage Subsidy Scheme and the COVID-19 Stability Fund.

In 2022, government or other public funding was the only income source for 149 charities – up from 142 in 2019.

The number of charities in the sample that did not receive any funding from Government, local authorities or other public bodies, fell by 9% over the four years since 2019.

Their average income dropped by 37% between 2019 and 2021, falling from an average of €889,000 in 2019 to €560,000 at the end of 2021.

Although average income at these charities had increased by the end of 2022, it was still down 13% on 2019 figures.

This cohort is predominately made up of volunteer-only charities from the lower end of the income scale.

When considered over the four years, 70% report income of less than €250,000, compared with 52% in the whole sample. Of these smaller charities, 60% had no employees, compared with 33% in the whole sample.

Income in charities for ‘the protection of the natural environment’ and ‘the advancement of environmental sustainability’ has risen significantly over the last four years, though the monetary values are small in overall terms.

Charity expenditure has risen steadily year on year since 2019, showing an overall increase of 25.7% by the end of 2022. This increase, however, will have been uneven across the sector, with some seeing a decrease in expenditure.

Expenditure on salaries accounts for almost half of all charity spending.

The number of charities with employees has remained relatively static since 2019.

There has been a 6% decrease in the number of charities reporting between one and nine employees between 2019 and 2022,  showing that these charities increased their employee complement in the period.

The number of charities in the sample reporting over 1,000 employees has also significantly increased in the four years, from 26 to 31, or a rise of over 19%.

Employee numbers static

Overall employee numbers remained relatively static over the two years, with staffing levels seeing an increase of 0.3%, while salary expenditure rose by 11.3% in the same period.

The estimated total number of volunteers in the charities in the sample in 2019 is 236,839. This drops to 225,877 in 2020, with a further fall in 2021 to 195,375.

Volunteer numbers rise again in 2022 to an estimated 209,544.

Statutory bodies

The Charities Regulator is the independent statutory body responsible for registering and regulating charities operating in Ireland.

Its key functions include maintaining a public register of charities and ensuring compliance.

There are currently just over 11,500 registered charities – including almost 3,700 schools.

The charities differ in size and in terms of the source of their income, their level of expenditure, legal structure, the number of employees and/or volunteers and the complexity of the charity’s activities.

All registered charities are required under section 52 of the Charities Act 2009 to submit an annual report to the Charities Regulator within ten months of the financial year-end.