Research reveals role of local voluntary organisations in Big Society

Two reports published today (co-authored by our research team) are set to fill major gaps in local understanding of the voluntary and community sector which, until recently, has been dominated by national-level studies.

The reports - Mapping registered Third Sector Organisations in the North East and Mapping registered Third Sector Organisations in Cumbria – are part of the Northern Rock Foundation’s Third Sector Trends Study which aims to provide detailed information about the scale, role and dynamics of organisations in North East England and Cumbria.

The Foundation has brought together an expert team for the study, including Professor John Mohan of the University of Southampton and David Kane, Research Officer at NCVO.

The data reveals the significant role of local sectors in their local economies, demonstrating that:

• the third sector in the North East represents 3% of all charities in the UK, and that Cumbria represents another 1.3%
• there are 4,760 general charities in the North East, with a combined income of £731 million in 2007/08, an expenditure of £673 million and assets worth £1.3 billion
• there are 2,216 general charities in Cumbria, with a combined income of £164 million in 2007/08, an expenditure of £148 million and assets worth £340 million

Income and Expenditure Profiles

Because of the lack of large national charities in the two areas studied, average sector incomes are lower than for the country as a whole, with an average income of £153,400 in the North East compared to £207,500 nationally.

However, the local sector expenditure profile reveals sizeable resources ranging from small volunteer-run organisations with less than £10,000 per year to major social businesses with multi-million pound turnovers. Two of the largest include Erimus Housing and Housing Hartlepool, housing associations with expenditures of £58 million and £33 million respectively.

The third sector in the North East is also net gainer in terms of income flows. Charities based outside the region spent £381 million in the North East in 2006/07, while those in the region spent just £57 million in other regions of the UK.

Income Sources

The research also shows the two local areas studied have distinctive income and activity profiles compared with national averages. Nearly half (49%) of the income of charities in the North East comes from statutory sources, compared with 38% for the UK as a whole.

With a greater reliance on both statutory and on privately-donated income than for the UK as a whole, results suggest that charities in the North East have fewer opportunities to attract income from enterprise and trading, or from investments.

In contrast, government income is less important to organisations in Cumbria than to UK charities in general. Charities in the region received £47 million from statutory sources in 2007/08; 29% of all income for the region, and 0.4% of the statutory income of all UK charities.

Activity Profiles

The activity profiles of the local sectors in Cumbria and the North East share the dominance of social welfare organisations seen in the national picture, but also have distinct local features. In Cumbria the share of charities working in development and regeneration, education, and village halls is greater than the national average, while there seem to be fewer research and international organisations. The North East has a higher representation of charities working in economic and community development, compared with the UK as a whole.

A particularly innovative aspect of these new local studies is the new data they provide on the breadth and diversity of the local third sector, showing that the third sector in the North East consists of 4,760 general charities and 1,860 other regulated third sector organisations, including 71 housing associations, 693 companies limited by guarantee, 163 community interest companies, 652 industrial and provident societies and 282 faith groups.

Local organisations and the Big Society

Commenting on the findings, Penny Wilkinson, Chief Executive of Northern Rock Foundation said:

"As local organisations face the challenge of meeting local needs and strengthening local services within the government’s vision of the Big Society, and in a stringent financial environment these studies provide essential information about the capacity of the sector and its strengths and weaknesses which will be invaluable for realistic local planning."

Download the reports from the Northern Rock Foundation Third Sector Trends Study website