The UK's 40 biggest charities have an income of £8bn, amounting to a fifth of the entire third sector income

The income of just 40 big charities makes up 20% of the funds of the entire UK third sector.

With a combined income over £8.05bn the top charities account for 18.4% of the sector’s income, despite making up just 0.02% of the over 160,000 UK charitable organisations.

The National Council for Voluntary Organisations (NCVO) revealed the startling statistic in its 2016 UK Civil Society Almanac, which also showed that the sector saw an overall 5.8% rise in income in 2013/14 compared to the previous year.

However, as has been the trend for a number of years, the sector’s growth is concentrated among larger organisations.

The total income of the 40 charities with an income of £100m plus grew by 26%, charities in the £10m to £100m category saw income growth of 3.7%, but the smallest groups that exist on under £1m saw their incomes fall.

These figures do underline our concern that small and medium-sized charities are struggling in particular at the moment

Sir Stuart Etherington

Charities in the £100k to £1m income bracket saw their incomes fall by 0.7%, while those in the £10k-£100k saw a reduction of 1.7%, and those with income of less than £10k fell by 3.6%.

While welcoming the increase in income for the sector as a whole, Sir Stuart Etherington, chief executive of NCVO, said there is a need for work to support smaller, specialist organisations

“We should be pleased that some of Britain’s most well-known and influential charities are continuing to grow and thrive,” he said.

“However, while we should remember that each charity’s circumstances will differ, these figures do underline our concern that small and medium-sized charities are struggling in particular at the moment.

“We all need to focus on what more can be done to support those good organisations which are nevertheless continuing to struggle in the current climate.”

Money from individuals was the largest source of income for the sector, with donations, legacies, and income from the likes of charity shop sales and fundraising and service fees totalling £19.4bn – the highest ever level – though donations remained below their 2010/11 peak.

Government income for charities remained below the peak enjoyed in 2007/8 and 2011/2012, but did increase by 3.5% to £15bn. However, most of the rise was accrued to the larger organisations.

Becca Bunce, policy and public affairs manager at the Small Charities Coalition, which exists to help and promote UK charities which have an income of less than £1m, said it is increasingly hearing from its members that funding worries are keeping them up at night.

She added: “Often people are unaware of small charities' work across a diverse range of issues, such as helping to end domestic violence, homelessness and supporting disabled people to live independently.

“These small charities play a part in tackling disadvantage that the bigger charities, businesses and the public sector cannot. Without changes being made, we risk losing these expert organisations - who are able to use knowledge of their communities to respond to the needs of individuals.

“We encourage funders and the government to work with small charities to respond to the concerns raised by the report.”

The Scottish Council For Voluntary Organisations (SCVO) said the findings are what is to be expected in a highly competitive fundraising environment.

Chief executive, Martin Sime, said: “These figures tell us that the biggest charities are getting bigger in Scotland too and that is what one would expect in a highly competitive fundraising environment where it is often necessary to invest significant money in the hope of raising more.

“On the other hand, our hospices show what is possible by mobilising community participation in raising funds and there are many examples of smaller organisations being successful.

“Size isn’t everything though – purpose, location, volunteering and community benefit are just as important.

“What matters most is that there is a healthy and dynamic ecosystem of charities, big and small, local, national and international and spread out across every part of public life.”

As well as revealing the income of the sector, the almanac, which is created using a sample of 7,500 charities’ accounts, also found that the sector’s spending was up 3.5% to £41.7bn.