The main focus in this report is on the funding environment for charities, social enterprises and other voluntary and community groups. This report is based in the context of an uncertain outlook for voluntary funding, due to the prospect of increased unemployment and low economic growth making it difficult to predict individual and commercial support. The report identifies five key developments, independent of government policy, that will have particular influence upon the future funding environment for civil society organisations: an ageing population; a more diverse population and household structure; development of new technology; climate change; and ethical consumerism and social values. Along side these developments the report identifies five further areas which are a direct result of government policy: public finance deficit reduction; the Big Society initiative; localism; reform of public services; and transparency and accountability. The report makes a series of recommendations that fall into four categories aimed at increasing: income for the sector; social investment in the sector; efficiency and reduced costs; and wider social impact. These recommendations seek to avoid a scenario in which the present pattern of public services is cut to the bone, serving fewer and fewer people and disadvantaged communities suffer most and inequalities increase.