Working paper 69
The marketisation of charities in England and Wales
Much has been written about the reasons for and impact of marketisation on charities, their clients, and wider civil society. This research sets out to explore whether charities in England and Wales are succumbing to market forces.
The notion of the ‘marketisation’ of charities relies partly on the idea that, at the level of the individual charity, grants and donations are being replaced by commercial revenue. However, there is no consensus as to whether this is the case. This paper therefore asks, are charities substituting commercial revenue for grants and donations, or are the two income sources complementary?
Our research draws on charities annual returns between 2002-2008. It analyses the proportion of revenue attracted through commercial sources (fees for goods and services; and surplus generated from subsidiary trading operations), and voluntary income (grant and private donations).
We found that charities’ commercial revenue has increased relative to other income sources in England and Wales, across almost all fields of activity. Charities are increasingly dependent on commercial revenue, and this is a substitute for grants and donations. That is, as grants and donations fall, commercial revenue rises. This shows that charities in England and Wales are succumbing to market forces, albeit to a small extent.
The research suggests that charities should give careful consideration as to whether to develop commercial revenue streams. These may not be as stable as has previously been assumed, and it remains unclear what the longer term effect will be on grants and donations.
Stephen McKay, Domenico Moro, Simon Teasdale and David Clifford