Charitable organisations, the Great Recession and the Age of Austerity: Longitudinal Evidence for England and Wales

Abstract

There has been extensive concern about the effect of recession and of subsequent public spending austerity on the voluntary sector - but a lack of comprehensive sector-wide data to examine this empirically. We construct a unique longitudinal dataset, which follows through time the population of charitable organisations in England and Wales since 1999, and assess the impact of recession and austerity by placing organisations' recent annual income within the context of longer-term trends. The results reveal the scale of the impact on charities' incomes for the first time: since 2008 median real annual growth in income has been negative for six consecutive years, leading to sizeable cumulative real income decline over the period. Mid-sized charities, and those in more deprived local areas, have been most significantly affected, consistent with concerns about a 'hollowing out' of the charitable sector and about the uneven impact of austerity. However, there has also been considerable variation in the fortunes of charities working in different fields of activity. The analysis in this paper helps to widen our perspective on the implications of the Great Recession and of public spending austerity for social policy.