Improving how we measure the UK's voluntary sector
By Brodie Gillan
When you think of the UK economy, the voluntary sector is probably not the first thing that comes to mind. Yet it’s hard to imagine an economy – or a country – without it.
There would be no food banks supporting families in crisis. No mental health helplines or bereavement services. No volunteer-run youth clubs, arts programmes, or libraries. Trade unions wouldn’t be there to advocate for workers’ rights, and countless community initiatives – from environmental clean-ups to warm spaces for the elderly – would disappear. There would be no charities to help people into work, deliver skills training, or support those facing exclusion.
The UK’s voluntary sector plays a vital but often overlooked role in our economy. It brings together a diverse range of organisations, from charities and cooperatives to social enterprises and community groups, all supported by millions of dedicated volunteers.
Yet, despite its reach and impact, much of the sector’s economic contribution remains hidden within the UK’s official statistics.
Currently, we cannot fully answer basic questions about the voluntary sector: How much does the voluntary sector contribute to the economy? How many people does it employ? How does it compare to other sectors in the economy? Is it growing or shrinking over time?
To begin addressing this and in partnership with the UK Office for National Statistics (ONS), ESCoE launched a programme of work to improve how the sector’s contribution is captured in economic statistics.
This blog summarises findings from two recent ESCoE publications that examine how improving the measurement of Non-Profit Institutions Serving Households (NPISH) could lay the foundations for developing a satellite account for the voluntary sector, a more complete picture of its scale and impact.
If you’ve ever tried to understand the true size of the UK’s voluntary sector, you’ll know it’s not straightforward. Charities, social enterprises, community groups and volunteers all play a huge role in people’s lives, but they don’t fit neatly into the categories used in traditional economic statistics.
To understand why, it helps to look at the National Accounts – the internationally-agreed system the ONS uses to measure the overall size and performance of the UK economy. These accounts underpin key figures such as Gross Domestic Product (GDP) and show what different industries and sectors contribute to the economy.
Within this system, there is a specific category that captures part of the voluntary sector, called the NPISH sector. This category is the closest statistical equivalent to the voluntary sector, but it does not include everything that falls within the voluntary sector, nor would all NPISH institutions necessarily be considered part of the voluntary sector.
In simple terms, NPISH covers non-profit organisations that help people or communities without trying to make a profit. They usually offer their services for free or at a much lower cost than a business would, rely mostly on grants and donations for funding, and operate independently of government control. Using these criteria, the ONS includes the following four types of organisations in NPISH:
However, NISH excludes many voluntary organisations that do not meet the technical definition, often because they earn most of their income through trading or service contracts rather than donations or grants. Examples could include:
Similarly, other groups commonly associated with the voluntary or “third” sector – such as social enterprises, mutuals, cooperatives, and many faith-based organisations – are often excluded, especially when they depend mainly on member fees or market income. Smaller charities without formal legal status may not be captured at all.
As a result, a large part of the sector’s activity and value is missing or not explicitly visible from National Accounts. International research shows that, in some countries, the full economic contribution of the non-profit sector can be up to five times greater than what NPISH alone records. This highlights a clear gap between the reality of the sector and what appears in official statistics.
That said, NPISH remains an essential part of the National Accounts. Its boundaries are set by international statistical standards, which the ONS must follow to ensure consistency and comparability across countries.
We explored how to improve the measurement of the voluntary sector in two connected ways.
Firstly, our technical paper reviewed and refined the methods currently used by the ONS to measure NPISH. The aim was not to change the definition of NPISH, but to strengthen how it is measured, making the process more accurate, transparent, and consistent. Strengthening NPISH data is an important first step towards a clearer picture of the voluntary sector as a whole.
We recommend that the ONS should:
The ONS has accepted these recommendations and has started exploring how to put them into practice.
Secondly, our discussion paper looks at how these improvements could help build a voluntary sector satellite account. This would be a complementary statistical framework that provides a fuller picture of the sector’s size, scope, and contribution to the economy. It is worth saying that “satellite accounts” have now been rebranded as “thematic or extended accounts” in the latest international standards (2025 SNA). We still use the term “satellite account” in this blog for consistency with previous work.
This work builds on wider research, including Pro Bono Economics’ (2024) feasibility study for the Department for Culture, Media and Sport (DCMS), which proposed a ‘top-down’ roadmap for a civil society satellite account.
In contrast, this ESCoE work takes a ‘bottom-up’ approach, focusing on practical steps such as better use of charity register data. The big advantage of this approach is that it builds on systems the ONS already uses. It doesn’t require creating new processes from scratch or obtaining new sources. Instead, it uses existing data in a better, more complete way.
In other words, this is a practical and cost-effective way to start developing a voluntary sector account that can grow over time.
Together, these efforts are helping to lay the foundations for a more complete and accurate picture of how the voluntary sector supports the UK’s economy and communities.
A satellite account is a way for national statistics agencies to take a closer look at parts of the economy that are important but not fully captured by standard measures. These accounts “sit alongside” the main National Accounts and provide extra detail about a particular sector, without changing how the core statistics work.
In the UK, satellite accounts have already been developed for areas such as tourism and the environment, helping governments better understand their economic impact.
A growing number of countries have developed or tested satellite accounts to better measure the value of their non-profit sectors, including Australia, Belgium, Canada, Mexico, and New Zealand. These studies have consistently shown that the voluntary sector’s true economic contribution is much larger than standard statistics suggest, and in some cases, up to five times higher.
That said, how often these accounts are updated and how much detail they include varies widely. For example, Canada updates its account every year, while New Zealand last published one in 2018 and has since paused further work due to data gaps. This underlines the importance of strong institutional commitment and reliable data systems to maintain and regularly update these accounts over time.
The findings below use new data from the ONS (2025) to show how much of the UK’s economic activity in different sectors comes from organisations classified as NPISH.
Gross Value Added (GVA) measures how much economic value a sector creates. In simple terms, it’s the difference between what an organisation produces and the costs of producing it. For charities however, GVA in the national accounts is calculated differently because the prices they charge for their services are typically below market value or insignificant. As a result, a charity’s GVA is essentially equal to its incurred labour costs, cost of depreciation and does not include the value of in-kind services produced through voluntary labour.
Even with its current limits, NPISH data shows that non-profits contribute significantly to the economy. In 2022, the sector’s economic value in the UK is particularly strong in:
Chart 1: Proportion of current price sectoral GVA attributable to NPISH, 1997 – 2022*
*Chart 1 shows only the top 12 sectors. Source: ONS (2025)
Chart 1 shows how the contribution of NPISH to the UK economy has changed over time. It highlights which parts of the economy – such as education, membership organisations, and social care – make up the largest share of NPISH activity. Together, these areas account for most of the sector’s economic value, reflecting its strong focus on supporting people, communities, and public services.
Yet they still don’t tell the full story. Many trading charities, social enterprises, and the enormous contribution of volunteers are not included in current data, meaning much of the sector’s true value remains unseen in official statistics.
Creating a satellite account for the voluntary sector would give a clearer picture of its economic contribution, but several challenges remain.
A major issue is defining what to include. The current NPISH category only captures part of the sector and excludes organisations such as social enterprises, cooperatives, and trading charities. A modular approach, as suggested by Pro Bono Economics (PBE), could help by allowing different types of organisations to be added over time.
There are also data gaps. Existing information from the Charity Commission isn’t consistent across all UK nations, and smaller or unregistered groups are often missing detail in the data. Volunteering, one of the sector’s defining strengths, is also poorly measured, with limited and irregular data on hours and value.
Finally, building and maintaining a satellite account will require long-term investment and collaboration between the ONS, charity regulators, and voluntary sector bodies. These challenges are significant but solvable, and tackling them would make it possible to measure the voluntary sectors contribution with much greater clarity and credibility.
Getting the measurement right matters because what we count shapes what we value. The voluntary sector delivers essential services, supports millions of people, and strengthens communities across the UK, yet much of its activity remains not measured in official economic data.
Improved measurement would help policymakers, funders, and researchers see the sector’s full impact alongside other parts of the economy. It would provide stronger evidence for investment, highlight where voluntary organisations fill critical gaps in public services, and support more effective policy design.
Recognising the voluntary sector in official statistics also gives it greater visibility and legitimacy. A clearer picture of its scale and value would ensure that the people, organisations, and volunteers underpinning it are properly reflected in how we understand the UK economy.
This blog examines how improving economic statistics can better capture the UK’s voluntary sector and its contribution to the economy. Current measures, based on Non-Profit Institutions Serving Households (NPISH), capture only part of the sector and overlook many social enterprises, cooperatives, and trading charities. Drawing on new research, the work sets out recommendations to enhance NPISH data and help develop a voluntary sector satellite account – a complementary framework that would better reflect the sector’s true scale, value, and impact. Improved data would not only support better policy and investment decisions but also ensure the voluntary sector’s vital economic and social contribution is properly recognised.
ESCoE blogs are published to further debate. Any views expressed are solely those of the author(s) and so cannot be taken to represent those of ESCoE, its partner institutions or the Office for National Statistics.
