The UK charity sector is defined by a profound financial disparity where the vast majority of organisations operate on the edge of survival while a tiny elite controls the lion’s share of resources. Approximately 94.6% of all charities in the sector earn less than £1 million per year, yet the financial stability of these organisations is increasingly precarious. At the opposite end of the spectrum, a mere 0.99% of charities, those with incomes over £10 million, control a staggering £70.5 billion, representing more than the combined income of every other income bracket in the country.
This week (22 – 26 June) is small charities week, “small” in this case is a charity under £1m, however only around 3% of charities sit in the £500 – £1m bracket and those charities on average make a surplus. The overwhelming number of charities are under the £500k income bracket, they account for 91% of the sector. These are the small charities. If a charity is making over £500k they are a top 10% charity.
The Deficit Crisis: Surviving Under £500,000
For the thousands of organisations with a revenue of less than £500,000, the economic reality is one of a “deficit crisis” where expenditure consistently outpaces income. Data from the Charity Comission (early 2026) reveals that every income bracket under £500,000 is currently operating at an average annual loss per charity. The smallest “micro” charities (earning £0 to £5,000) survive on an average annual income of just £1,135 and face an average yearly loss of £1,999. This financial pressure intensifies as charities grow slightly larger; those in the £50,000 to £100,000 range suffer the highest average deficit, losing £3,094 every year.
Financial stability only begins to emerge once a charity crosses the £500,000 threshold, where the average organisation finally sees a surplus of approximately £16,100. This means that for the 85.8% of the sector earning less than £250,000, the primary organisational goal is not growth, but simply bridging the gap between shrinking resources and rising demand.
The top 5% of charities acount for 75% of the income.
The top 1.2% accounts for 67%!
| charity size | income | expenses | # of charities | average income | average expenses | surplus / deficit |
| 0 – 250k | £4,890,734,573 | £5,145,022,948 | 119,959 | £40,770 | £42,890 | -£2,120 |
| 250k – to – 500k | £3,202,770,608 | £3,207,008,966 | 9,090 | £352,340 | £352,806 | -£466 |
| 500k – to – 1M | £4,192,592,186 | £4,097,568,775 | 5,902 | £710,368 | £694,268 | £16,100 |
| 1M – to – 5M | £13,885,584,387 | £13,747,577,840 | 6,315 | £2,198,826 | £2,176,972 | £21,854 |
| 5M – to – 10M | £8,663,502,013 | £8,486,463,277 | 1,221 | £7,095,415 | £6,950,420 | £144,995 |
| over – 10M | £70,502,256,844 | £70,406,722,851 | 1,695 | £41,594,252 | £41,537,890 | £56,362 |
£14,080,100,000 (£14 BILLION) of government grants and contracts funding in 2024/25 with charities under £1m income receiving only 7.7% of that
It is no surprise that government funding is heavily weighted to the corporate charities. As the charity size grows the percentage of charities in that income bracket receiving government (tax payers) money increases, For the £500k – £1m bracket 30% of the charities receive government grants or contracts, the average amount being £269,483 per charity! Is it fair that War Child, a massive charity with an income of £13 million should receive £1.4 million in government grants, 10% of their income. They have over £5 million in cash assets (£2 million is unrestricted funds). To be fair this was their largest government grant for quite some time, however the point remains, is this fair on small charities and indeed on the tax payer?
92% of government funding goes to charities making over £1 million.
| charity size | gov funding | number of charities | average funded | % of segment | % of total income |
| 0 – 250k | £266,500,000 | 9156 | £29,107 | 7.63% | 5.45% |
| 250k – to – 500k | £256,600,000 | 2129 | £120,526 | 23.42% | 8.01% |
| 500k – to – 1M | £484,800,000 | 1799 | £269,483 | 30.48% | 11.56% |
| 1M – to – 5M | £2,107,600,000 | 2202 | £957,130 | 34.87% | 15.18% |
| 5M – to – 10M | £1,275,600,000 | 429 | £2,973,427 | 35.14% | 14.72% |
| over – 10M | £9,689,000,000 | 629 | £15,403,816 | 37.11% | 13.74% |
Small charities struggle at every stage, and I have no doubt that this pattern of funding is similar when it comes to grant funding, the large charities with all their advertising power, cash flow, assets, contacts and celebrity endorsements with be the main beneficiaries.
Sorry Sector
The charity sector is actively ignoring what it preaches. The top few are running away things, the corporatisation of charities is leading toward huge self serving charities who are intertwined with business and government. Is this really what the sector wants? There are many problems with the charity sector, but the slow death of small charities is one that should be addressed. Small local charities should be the heartbeat of the sector, instead it the corporetised charities that are held up as role models.
These figures are based on data downloaded from the Charity Comission in Q1 of 2026
