The 2025 Third Sector Trends survey (the only long-running, nationally representative study of the VCSE sector) gathered 8,680 responses across England and Wales.

Findings show clear shifts in how charities fund their work, manage finances and view their future prospects:

• Grants are now the most valued income source, with organisations increasingly favouring them over contracts, whose appeal has sharply declined since 2022. Social investment lending is seen as even less relevant than before.
• Trusts and foundations are offering more long‑term support, with rising investment in core costs and organisational skills.
• Despite government efforts, the sector is turning away from public service contracts, citing low contract values, rising costs and workforce pressures.
• Trading income is weakening, especially among newer organisations, who are far less likely to rely on earned income than long‑established charities.
• Reserves remain strong, with nearly half of organisations not needing to use them this year. Still, Third Sector Organisations in poorer areas are much more likely to rely on reserves to cover essentials.
• Financial optimism has dipped: only 28% expect income to rise, though actual income growth has slowly improved over the long term.

Read the report to learn more.