We are pleased to announce the launch of a new archetype analysis of the income and expenditure types in charities. Our archetype will allow charities, donors, and others to understand what the benchmark is for each type of charity, thus ensuring that judgements are made based on norms of income and expenditure for similar charities. At present, using 'average' figures for the whole sector is like comparing apples, oranges and bananas by reference to the 'typical' fruit. Our analysis looks at the accounts of over 2500 charities with an income of over £5 million, and suggests there are six different types of income/expenditure model or archetype.

1. Just my type:
understanding charities
using archetype analysis
Cian Murphy & Joe Saxton
March 2017

2. 2
Why do we need financial archetypes?
• We need to explain the sector better and its finances better.
• Members of the media and general public will judge charities by their
accounts and produce ratios and metrics based on the whole.
• Yet the average of the sector is something that no single charity represents.
Charities have evolved so much that one size definitely no longer fits all -
charities are not a monolithic group.
• This analysis tries to drill down to find out what the constituent elements of
the charity sector looks like.
• We hope that by identifying ‘types’ of charity we can provide betters ways
that boards of trustees can measure their performance and what ‘normal
looks like for their type of charity.
• But the analysis is still developing – so we’d love any thoughts or feedback

3. 3
What is archetype analysis?
• Archetype analysis is a technique that picks out the most distinctive
cases in a dataset and compares all other cases to these.
• Allows us to explore a complex dataset where charities can be partly
one type and partly another
• We can then break the dataset into groups based on which
archetype they score highest for
• We applied this technique to accounts of 2,000 charities with an
income of more than £5m and looked at six archetypes

4. 4
What are the six types?
401
1113
74
255
41
125
Linked Trusts
Contractors and Service Providers
Fundraisers
Traders
Legacy Fundraisers
Invested Trusts

5. 5
Linked Trusts
87%
2%
3%
3%
6%
Voluntary Income
Legacy Income
Trading Income
Investment Income
Charitable Activities
Income
16%
3%
2%
1%
92%
Staff Costs
Voluntary Income
Costs
Trading Costs
Investment Costs
Charitable
Expenditure
2nd Lowest average
number of staff (170)
Lowest average high
salary (£56,489)
Highest Fundraising ROI
(18.95:1)

6. 6
Contractors and Service Providers
9%
1%
4%
2%
85%
Voluntary Income
Legacy Income
Trading Income
Investment Income
Charitable Activities
Income
40%
2%
3%
0%
94%
Staff Costs
Voluntary Income
Costs
Trading Costs
Investment Costs
Charitable
Expenditure
Highest average number
of staff (443)
3rd Highest average high
salary (£80,678)
3rd Highest Fundraising
ROI (3.07:1)

7. 7
Fundraisers
79%
16%
11%
2%
8%
Voluntary Income
Legacy Income
Trading Income
Investment Income
Charitable Activities
Income
31%
31%
5%
0%
62%
Staff Costs
Voluntary Income
Costs
Trading Costs
Investment Costs
Charitable
Expenditure
2nd Highest average
number of staff (341)
Highest average high
salary (£95,055)
3rd Lowest Fundraising
ROI (2.93:1)

8. 8
Traders
26%
7%
56%
2%
16%
Voluntary Income
Legacy Income
Trading Income
Investment Income
Charitable Activities
Income
40%
6%
37%
0%
55%
Staff Costs
Voluntary Income
Costs
Trading Costs
Investment Costs
Charitable
Expenditure
3rd Lowest average
number of staff (210)
2nd Highest average high
salary (£91,003)
Lowest Fundraising ROI
(1.91:1)

9. 9
Legacy Fundraisers
82%
60%
5%
5%
7%
Voluntary Income
Legacy Income
Trading Income
Investment Income
Charitable Activities
Income
33%
11%
4%
3%
75%
Staff Costs
Voluntary Income
Costs
Trading Costs
Investment Costs
Charitable
Expenditure
3rd Highest average
number of staff (270)
2nd Lowest average high
salary (£75,635)
2nd Highest Fundraising
ROI (5.05:1)

10. 10
Invested Trusts
22%
2%
5%
56%
15%
Voluntary Income
Legacy Income
Trading Income
Investment Income
Charitable Activities
Income
14%
2%
6%
10%
79%
Staff Costs
Voluntary Income
Costs
Trading Costs
Investment Costs
Charitable
Expenditure
Lowest average number
of staff (137)
3rd Lowest average high
salary (£75,635)
2nd Lowest Fundraising
ROI (2.24:1)

11. 11
What does all this mean?
• The sector really is a mixture of apples, oranges and bananas so trying to use
fundraising, staff, or expenditure ratios to describe all charities is not helpful.
• Contractors and service providers are by far the largest archetype and have the most
staff. Who-ever knew there were so many linked trusts? This is a category of charity
that we were barely aware of – but it’s the second largest type.
• So while the public/media sees fundraising charities as the charity world, the sector
as a whole is really rather different
• Some familiar faces fall into different categories from the expected, these are often
those who have a fundraising minority onto top of a largely contractor majority
• Mixing archetypes is probably the best strategy both in terms of financial resilience
and improving overall ratios
• What difference would it make if we analysed small charities in the £1-£5 million size.
Are there any other measures we should include in the analysis?
• Fundraising and trading archetypes are inherently expensive financial models. They
shouldn’t be compared ratio-wise with predominantly linked trusts or legacy types

12. 12
2-6 Tenter Ground
Spitalfields
London E1 7NH
www.nfpsynergy.net
+44 (0)20 7426 8888
insight@nfpsynergy.net
nfpsynergy
nfpsynergy
nfpsynergy
Registered office: 2-6 Tenter Ground Spitalfields London E1 7NH. Registered in England No. 04387900. VAT Registration 839 8186 72
Contact Joe Saxton or Cian Murphy
for more information on:
joe.saxton@nfpsynergy.net or cian.murphy@nfpsynergy.net