Third Sector Trends in England and Wales 2025

The 2025 Third Sector Trends survey – the UK’s only long-running, nationally representative study of the VCSE sector – gathered responses from 8,680 organisations across England and Wales.

The findings highlight significant changes in how charities fund their work, manage finances, and view their future:

• Grants are now the most valued income source, with organisations increasingly favouring them over contracts. The attractiveness of public service contracts has fallen sharply since 2022, while social investment lending is seen as even less relevant than in previous years.

• Trusts and foundations are providing more long-term support, with growing investment in core costs and organisational capacity and skills.

• Despite government initiatives, many organisations are stepping back from public service contracts, citing low contract values, rising delivery costs, and ongoing workforce pressures.

• Trading income is weakening, particularly among newer organisations, which are far less likely to rely on earned income than longer-established charities.

• Reserves remain relatively strong, with nearly half of organisations not needing to draw on them this year. However, organisations operating in poorer areas are significantly more likely to rely on reserves to cover essential costs.

• Financial confidence has declined, with only 28% of organisations expecting income to rise, despite a slow but steady improvement in actual income growth over the longer term.

Read the full report:- Third Sector Trends in England and Wales – people, work, ambition and impact (December 2025)