UK Charity Financial Intelligence
Methodology
CharityLens calculates 27+ financial health metrics for every UK charity. This page explains exactly how each metric is calculated, what it means, and how to interpret it.
Data Sources
All data comes from official Charity Commission filings:
- Annual Returns – Financial data submitted yearly by charities
- Charity Register – Registration details, classifications, and trustee information
- Accounts Data – Detailed financial breakdowns from submitted accounts
Data is refreshed monthly. Individual charity pages show the financial year of the latest available data.
Efficiency & Health Metrics
Metrics that measure how effectively a charity uses its resources
Percentage of total spending that goes directly to charitable work.
Income generated for every £1 spent on fundraising. Shows the return on investment for fundraising activities.
Percentage spent on governance and administration. Some governance spending is necessary for good oversight.
For grant-making charities, the percentage of charitable spending distributed as grants to other organisations.
Shows what proportion of the charity's assets are funded by debt.
Number of months the charity could continue operating using reserves if all income stopped. Indicates financial resilience.
Income Profile Metrics
Metrics that analyse the charity's funding sources and stability
Percentage of income from voluntary donations and bequests.
Income from government contracts and grants.
Herfindahl-Hirschman Index measuring income concentration. Measures how spread out income sources are.
Income from trading activities and investments that the charity generates itself, rather than receiving as donations or grants.
Trend & Growth Metrics
Metrics that show how the charity's finances are changing over time
Year-over-year change in total income. Shows short-term performance.
Compound Annual Growth Rate over three years. Smooths out year-to-year fluctuations to show underlying growth trend.
Coefficient of variation in income. Measures year-to-year income fluctuation.
Direction of reserves trend: Increasing, Stable, or Declining. Shows whether the charity is building or depleting reserves.
Governance & Workforce Metrics
Metrics about the charity's people and leadership
How many volunteers support each paid staff member.
Income generated relative to staffing levels.
Percentage of employees earning over £60,000. Helps assess salary distribution.
Peer Comparison Methodology
How we compare charities to their peers
Charities are grouped into bands: Micro (<£10k), Small (£10k-£100k), Medium (£100k-£1M), Large (£1M-£10M), Major (£10M-£100M), Super-Major (>£100M).
For each metric, we calculate where the charity ranks among peers in its income band. 75th percentile means the charity outperforms 75% of peers.
The median value for each metric across all charities in the same income band. Used as the benchmark for comparison.
Important Notes
- Context matters – Metrics should be interpreted in the context of each charity's size, sector, and mission.
- No single metric tells the whole story – Use multiple metrics together for a complete picture.
- Data limitations – Smaller charities may have incomplete data. Very recent filings may not yet be reflected.
- Not financial advice – CharityLens provides data for informational purposes. Always perform your own due diligence.
Frequently Asked Questions
What data does CharityLens use?
CharityLens uses official data from the Charity Commission for England and Wales, including annual returns, charity register information, and financial accounts submitted by charities. Data is refreshed monthly.
How is the Charitable Spending Ratio calculated?
The Charitable Spending Ratio is calculated as (Charitable Activities Expenditure ÷ Total Expenditure) × 100. It shows what percentage of a charity's spending goes directly to charitable work. A typical range is 70-85%.
What is a good Survival Ratio for a charity?
The Survival Ratio (or reserves ratio) measures how many months a charity could operate using its reserves if income stopped. Most guidance recommends 3-6 months of reserves, though this varies by sector and risk profile.
How does CharityLens compare charities to their peers?
Charities are grouped into income bands (Micro, Small, Medium, Large, Major, Super-Major) and compared against other charities in the same band. We calculate percentile rankings for each metric, so you can see how a charity performs relative to similar-sized organisations.
What does the HHI (Herfindahl-Hirschman Index) measure?
The HHI measures income concentration, ranging from 0 to 10,000. Lower scores indicate more diversified income sources (less risk). Below 2,500 is considered diversified; above 5,000 is highly concentrated on one or two income sources.
How often is the data updated?
CharityLens data is refreshed monthly from Charity Commission filings. Individual charity pages show the financial year of their most recent annual return. Note that charities may file up to 10 months after their financial year end.
Can I use CharityLens for grant making due diligence?
Yes, CharityLens is designed to support grant makers and funders with initial due diligence. However, we recommend using CharityLens data alongside your own research and direct engagement with charities. Our data is informational only and not financial advice.
Why might a charity's data be incomplete?
Smaller charities (under £10,000 income) are not required to submit detailed annual returns. Some metrics require multiple years of data to calculate trends. Very recent filings may not yet be reflected in our data.
Questions about our methodology?