Top of the charts

The Charity Finance Charity Index has been tracking the income of the top 350 UK charities since 1996. Gareth Jones reports on the progress of the independent schools that qualify to appear in the rankings

Income for the index is recorded for five sub-income streams: legacies, voluntary, grants and fees, investment and gross trading. Membership of the index is refreshed each spring to take into account new or growing charities, with rankings based on a three-year average income. The smallest charity in the index currently has an average annual income of £8.8 million.

Forty-nine independent schools (or groups) have sufficient income to meet the eligibility criteria for inclusion in the index, most of which sit within the Charity 250 Index (or, in other words, between rankings 101-250).

Ahead of the game
The majority of the schools’ year-end 2006 accounts fall in Quarter 3. How are they doing? The answer is, in terms of income at least, pretty well. The schools index remains ahead of the 250 index as a whole, having trailed it until 2004 and now has an index value of 2,321 (with figures re-based to 1,000 points at the starting point of Quarter 1, 1996) and a combined income of £1.2 billion.

Grant and fee income accounts for 91 per cent of these schools’ income, the vast majority of which is made up of tuition fees. While grant and fee income continues to increase, the rate at which it does so has fallen back to the levels of the late 1990s, following big increases in 2002, 2003 and 2004.

Nevertheless, with the latest median grant and fee increase standing at 6.3 per cent, this is well ahead of inflation; the Consumer Price Index (CPI) stood at 1.8 per cent in August 2006, while estimates put wage inflation at around 3-4 per cent.

Top ranking
The highest ranked school group is the Girls’ Day School Trust, with a three-year average of £155.1 million, having increased its income every year since the index began in 1996, when it had a total income £70.6 million.

The United Church Schools Foundation is the second largest, having also grown every year, from a 1996 figure of £13.5 million to £97.4 million in 2006. In particular, its income leapt in the year ending August 2004, following a large increase in funding from the then DfES, mainly for new buildings under construction.

The Woodard Corporation, with the third largest income at £91.5 million, is notable for its relatively recent emergence, following the merger of its divisional charities into a single corporation in 2003.

It remains to be seen whether a further financial squeeze on income will arise from the public benefit stipulations as a result of the Charities Act 2006, which are likely to force schools to increase bursaries to attract more pupils from poorer backgrounds.

Gareth Jones is a reporter for Charity Finance (www.charityfinance.co.uk).