Financial review
A resilient financial performance for the year ended 31 December 2025, underpinned by sustained donor support, diversified income streams, and prudent financial management.
- £239m total income (2024: £275m)
- £216m expenditure on charitable activities (2024: £280m)
- £119m total reserves at 31 December 2025
- £9.6m free reserves, freely available for general use
Islamic Relief Worldwide reports a resilient financial performance for the year ended 31 December 2025, underpinned by sustained donor support, diversified income streams, and prudent financial management. Total income for the year amounted to £239 million (2024: £275 million). While this represents a reduction compared to the prior year, Islamic Relief has maintained a strong income base that continues to support the delivery of our charitable objectives across humanitarian response, development programming, and advocacy.
The trustees consider the charity’s financial position to be robust, with adequate reserves and liquidity to support both current operations and future strategic priorities, in line with the organisation’s reserves policy and long-term sustainability objectives.
Financial performance
Income and fundraising
Total income for the year was £239 million (2024: £275 million). Income is derived from a broad mix of non-exchange and exchange transactions, which supports financial resilience and reduces reliance on any single funding source:
- Donations, legacies and fundraising income (non-exchange transactions) remain the charity’s principal source of funding. These comprise both restricted and unrestricted contributions received from member offices and individual supporters. Income from member offices totalled £138 million (2024: £161 million). While this reflects a year-on-year decrease, member office funding continues to represent the most significant and strategically important income stream for the organisation. The trustees recognise the importance of sustained engagement with member offices to support future income stability.
- Grants from institutions and major donors (primarily non-exchange transactions) are received to fund specific humanitarian and development programmes. These grants are typically restricted and are recognised as income when the charity is entitled to the funds, receipt is probable, and the amount can be measured reliably. Such funding supports both emergency response activities and longer-term development initiatives, enabling targeted and accountable deployment of resources.
- Earned income and investment returns (exchange transactions) arise principally from trading activities undertaken by the charity’s wholly owned subsidiary, TIC International Ltd, and from investment income generated through the International Waqf Fund. These income streams contribute to the organisation’s financial sustainability and help to diversify funding beyond voluntary income.
Fundraising activities
Donations and legacies from UK operations totalled £63.7 million in 2025 (2024: £73.3 million), reflecting a thirteen per cent decrease year-on-year due to a competitive and challenging fundraising environment. Expenditure on raising donations increased to £21.1 million (2024: £19.2 million). We anticipate that this investment will yield returns within the next three years. As a result, net fundraising income was £42.6 million (2024: £54.1 million).
Expenditure
Charitable activities
Total expenditure on charitable activities for the year amounted to £216 million (2024: £280 million). Expenditure levels reflect the scale and nature of global humanitarian needs during the year and the timing of programme delivery across countries of operation.
The expenditure breakdown highlights:
- Humanitarian assistance expenditure totalled £101 million (2024: £140 million). This reduction compared to the prior year reflects changes in the scale and timing of major emergency responses. During 2025, Islamic Relief continued to respond to complex humanitarian crises, including those affecting Gaza, Sudan, Yemen, Syria, Lebanon, and Iraq.
- Investment in community empowerment and social development programmes continued across healthcare, water and sanitation, education, and livelihoods. Expenditure on orphans programming amounted to £36 million (2024: £46 million). Spending on long-term healthcare and water access programmes totalled £18 million (2024: £23 million). Education support programmes received £7 million, representing an increase on the prior year and reflecting the organisation’s ongoing commitment to sustainable development through learning and skills-building.
Islamic Relief categorises our expenditures into three main areas:
- Charitable activities: direct costs associated with implementing programmes across various regions.
- Fundraising and advocacy costs: these are investments aimed at amplifying the voices of those we serve and supporting broader goals aligned with the United Nations Sustainable Development Goals 2030.
- Support costs: costs associated with ensuring effective governance, financial management, safeguarding and operational oversight.
The trustees consider the level and allocation of expenditure to be appropriate and consistent with the charity’s objectives and risk appetite.
Impact and performance
During the year, Islamic Relief’s programmes reached approximately 13.1 million people worldwide. Financial resources were directed towards life-saving humanitarian assistance and longer-term development interventions aimed at strengthening resilience, improving access to essential services, and supporting sustainable livelihoods.
The trustees monitor performance through a combination of financial reporting, programme monitoring and evaluation, and impact assessments. Expenditure decisions are informed by both immediate humanitarian need and the anticipated long-term outcomes for the communities served. Further detail on the charity’s impact and outcomes is set out in the CEO and Chair’s message.
Total figure of individuals directly reached in 2025: 13,132,741.
Trading activities: TIC International Limited
TIC International Ltd is a wholly owned trading subsidiary whose principal activities include clothes recycling and the operation of a charity shop network. The subsidiary’s objectives are to generate income for Islamic Relief, support environmental sustainability, and contribute to local economic activity.
During 2025, TIC processed approximately 1,841 tonnes of clothing, consistent with the prior year. Higher-quality items were resold through Islamic Relief shops, while lower-quality items were recycled, reducing textile waste sent to landfill. Recycling activities generated income of £181,000 (2024: £204,000), which was applied in support of the charity’s programmes.
The trustees consider TIC International Limited to be strategically aligned with Islamic Relief’s charitable purposes, contributing both financially and environmentally.
Debtors
Within the amounts of debtors Islamic Relief USA have dues to Islamic Relief Worldwide of £14 million. A management assessment determined that this money is fully recoverable, and therefore it is deemed no impairment or provision is required.
International Waqf Fund
The International Waqf Fund is intended to support the long-term financial sustainability of Islamic Relief by generating investment returns that can be applied to charitable activities. At 31 December 2025, the fund remained stable at £2.6 million (2024: £2.3 million).
Endowments
Islamic Relief Worldwide holds endowment funds invested primarily in UK property. Returns generated from these investments are applied in accordance with donor restrictions to support humanitarian and development programmes. The trustees consider the management of endowment assets to be prudent and aligned with the organisation’s ethical and risk management frameworks. At 31 December 2025, the fund remained stable at £8.7 million (2024: £8.4 million).
Reserves and financial position
Islamic Relief’s financial reserves are notable, providing a safeguard for continued support in the upcoming year and ensuring long-term stability. At 31 December 2025, total reserves amounted to £119 million. This comprised unrestricted reserves of £39.8 million, of which £9.6 million were freely available. Our free reserves balance of £9.6 million is calculated as total unrestricted reserves of £39.8 million less tangible (£8.2 million) and intangible fixed assets (£2.3 million), investments (£0.5 million), and other funds not available for general use (£19.2 million). The remaining amounts consisted of restricted funds of £70.9 million and £8.7 million held in accordance with donor-imposed conditions and long-term investment purposes.
| Component | £m |
|---|---|
| Total unrestricted reserves | 39.8 |
| Less tangible fixed assets | (8.2) |
| Less intangible fixed assets | (2.3) |
| Less investments | (0.5) |
| Less other funds not available for general use | (19.2) |
| Free reserves | 9.6 |
Reserves policy and target range
Islamic Relief’s reserved funds are there to help ensure that we can keep our vital programmes running year round. The funds are carefully managed and overseen by our Audit and Finance Committee and our Board of Trustees. They are held in our account for a specific period of time, in line with any project guidelines and then spent accordingly. Reserve funds are spent continuously, in line with the project guidelines and are replenished each year. They’re essential for our organisation to keep our programmes running smoothly and without disruption.
As with all charities, our external reporting is done on an annual basis, which means that our accounts may show funds coming into the account towards the end of this period, which are then spent in the next period, once the project’s due diligence has been completed. Guidance from the Charity Commission recommends that all charities secure reserve funds to ensure that donors have confidence in the charity and its ability to carry out its operations effectively and without disruption. Reserve funds are not held in perpetuity and are always spent in line with our Reserves Policy and any project stipulations.
Our Reserves Policy is designed to ensure continuity of operations, manage income volatility, and provide capacity to respond rapidly to unforeseen humanitarian emergencies. The policy sets a target range for freely available unrestricted reserves sufficient to cover a defined period of core operating expenditure and essential commitments, with both a minimum threshold (to protect going concern) and an upper limit (to ensure funds are applied promptly to charitable activities). The target range and its underlying assumptions are reviewed and approved by the trustees at least annually and are informed by the principal financial and operational risks facing the charity, as set out in the principal risks and uncertainties section of this report.
We hold free reserves to:
- provide continuity to the people we help by protecting against unforeseen project expenditure due to the inherent risk of the volatile, uncertain, complex and ambiguous (VUCA) environments in which we operate and to manage economic and foreign exchange volatility as well as income fluctuations
- provide working capital and manage the seasonality of income generation for the effective running of the charity
- enable Islamic Relief to invest in unforeseen funding and growth opportunities to benefit our stakeholders and the vulnerable people we serve, subject to the Board of Trustees’ approval.
Where unrestricted reserves are held above immediate operational requirements at any point in the year, this primarily reflects prudent cash management, timing differences between income receipt and programme delivery, and the need to maintain readiness for emergency response. Restricted reserves are held to meet Islamic Relief’s specific donor conditions, and £5.5 million of restricted funds were utilised during 2025 in line with agreed programme delivery schedules.
The trustees consider the level of reserves at 31 December 2025 to be appropriate, proportionate to the charity’s scale and risk profile, and consistent with foreseeable commitments and planned activities. The reserves position is monitored throughout the year through regular financial reporting, and any material deviation from the target range would trigger mitigating actions, including cost management, reprioritisation of expenditure, or targeted income diversification.
The Board considers the level of free reserves to remain an appropriate target, considering Islamic Relief’s size, operations, and the financial risks it is exposed to. The Board has reviewed the Reserves Policy post-financial year-end and considered future activities that may require funds. The target level of free reserves is determined by considering: forecast core operating expenditure, risk assessment and liquidity needs, and the time required to implement mitigating actions in the event of significant reduction in income. Based on this assessment, a target free reserves level of £9.3 million, equivalent to approximately six months of forecast core expenditure.
This level is considered sufficient to provide financial resilience, maintain operational continuity during periods of uncertainty, and enable the charity to continue delivering its objectives. The trustees are satisfied that the level of free reserves held at the year end remains appropriate to support the charity’s ongoing activities and manage potential financial risks.
Environmental, social and governance considerations
The trustees recognise the importance of environmental stewardship, social responsibility, and strong governance in delivering charitable impact. Environmental considerations include efforts to reduce waste and promote recycling through trading activities, alongside responsible procurement and programme delivery practices. Governance arrangements ensure effective oversight, risk management, and accountability, while social considerations underpin safeguarding, ethical fundraising, and responsible partnerships.
The trustees continue to review and strengthen environmental, social and governance practices in response to stakeholder expectations and evolving regulatory guidance.
Going concern
The trustees have assessed the charity’s ability to continue as a going concern, taking into account income forecasts, expenditure commitments, reserves, and cash flow projections. Scenario planning has been undertaken to assess the impact of potential income volatility and cost pressures.
The charity has no external bank borrowings, maintains a healthy pipeline of funded programmes, and benefits from diversified income streams. On this basis, the trustees conclude that Islamic Relief Worldwide has adequate resources to continue operations for the foreseeable future, and the financial statements have therefore been prepared on a going concern basis.
Outlook and future plans
Looking ahead, the trustees will continue to focus on financial sustainability, diversification of income, and the effective deployment of resources to maximise impact.
Priorities include strengthening member office engagement, expanding sustainable funding mechanisms such as the International Waqf Fund, and ensuring that financial management supports the delivery of both humanitarian response and long-term development objectives.
Conclusion
Overall, Islamic Relief’s 2025 Financial Review demonstrates steady income levels, strong fundraising performance, and a clear dedication to delivering meaningful charitable outcomes. Moving forward, continued teamwork, innovative thinking, and a sustained focus on long-term resilience will be essential to overcoming future challenges and increasing our positive impact across communities worldwide.