Charity sector umbrella body NCVO has reported a financial deficit despite its membership increasing.
NCVO ended the financial year with a deficit of £718,000, which it funded through reserves, according to its annual report for the year ending 31 March 2022.
The report also reveals 2021-22 saw membership growth of 4%, bringing NCVO’s total number of members to 17,102 by year end.
Deficit
In 2021-22, NCVO had a total income of £5.4m compared with £7.5m in 2020-21, and total expenditure of £6.3m compared with £7.4m in 2020-21. It expects to break even in 2022/23.
NCVO’s finances were partially impacted by the continued effect of Covid-19 restrictions on its conference suite income, but also a fall income from the Charities Aid Foundation.
NCVO closed the year to March 2022 with a deficit of £718,000, which was more than the planned deficit of £250,000.
The board of trustees chose to fund this deficit from NCVO’s general reserves.
‘NCVO’s experience certainly mirrors that of our members’
Priya Singh, chair of NCVO, said: “We began to see the true impact of the pandemic on NCVO members in 2021 and 2022. While fears of mass closures across the sector have thankfully not as yet materialised, we sadly saw more members closing their doors during the last year – meaning vital services were lost for people and communities.
“In 2021-22 many of the safety nets which had been put in place during the previous year of the pandemic were either not available or not available to the same extent, resulting in a tougher financial year as the sector grappled with ongoing restrictions. NCVO’s experience certainly mirrors that of our members and the wider sector, with a much more challenging year financially compared to the year before.
“Despite this financial picture we believed that making the choice to use our reserves to maintain our services for the voluntary sector while we rebuild our income streams – such as income from our conferencing and events suit - was vital and again reflected the challenging decisions being made across our sector during this 2021 and 2022.”
Membership growth
In 2021-22 NCVO saw membership growth of 4%, bringing its total number of members to 17,102 by year end.
Other umbrella organisations also saw membership growth, with ACEVO reporting its membership rose 7% year on year in terms of people, and 11% in terms of income, for the year ending in March 2022.
At NCVO there are 11,304, 66%, community members with an income of under £30,000. These are therefore in receipt of free membership. A further 5,798, 34%, are paying members.
Its report shows 1,492 new members joined NCVO in 2021-22 while 849 organisations saw their membership lapse.
NCVO revealed membership numbers are continuing to grow into 2022/23 and are currently standing at 17,394.
Despite this, membership growth slowed compared to the previous year, which saw fast growth as organisations turned to NCVO for support during the earlier stages of the Covid-19 pandemic.
NCVO’s membership retention rate also dropped by 10% in 2021-22.
It states this drop reflects the impact of the second year of the Covid-19 crisis on voluntary organisations across the sector.
Small Charities Coalition replacement service
The accounts also show a replacement service for some of the Small Charities Coalition's (SCC) work is being formed.
NCVO successfully bid in partnership with the Foundation for Social Improvement (FSI) to take on some of SCC’s services.
The accounts state the partnership with the FSI is critical in ensuring NCVO bring the best of small, alongside the sustainability a larger organisation such as NCVO can offer. It will be introducing a small charities advisory group later this year.
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