Credit-crunched public giving less to charity

Charity really does begin at home in a recession, it seems, as donations drop by £1.3bn.

Last Updated: 31 Aug 2010

Charitable donations fell by 11% to £9.9bn in the year to April, as downtrodden Brits tightened their belts, according to a new survey. This equates to a £1.3bn drop in the amount of money received by the UK’s 170,000 charities. But although we may have less change in our pockets for ad hoc giving, this doesn’t necessarily mean we’re all becoming a tight-fisted bunch - the number of monthly donors was only down by 2%. Clearly things haven’t become so bad that we're all deciding to cancel those direct debits en masse…

The average donor gave £10 a month to charity last year, £1 less than they donated in the previous year, according to the UK Giving 2009 report, which is put together by the Charities Aid Foundation (CAF) and the National Council for Voluntary Organisations (NCVO). But the beneficiaries have remained roughly the same, with one in five people plumping to give their money to medical charities, 15% donating to hospitals and hospices and 14% giving money to charities for children and young people.

It seems these charity-givers are missing a trick though. Just 40% of donations were Gift-Aided, a mechanism that allows the charity to reclaim the basic tax rate paid by the donor on the money. As a result of this oversight, the report’s authors reckon charities are missing out on around £750m a year.

The report also shows that a small number of donors continue to generate a large proportion of the total amount donated. In 2008/09, 2m people (that's about 7% of donors) gave more than £100 per month, generating almost half of the total amount given to charity. However, CAF notes that there has been a worrying decline in large donations as well as a ‘noticeable fall' in ‘donations by higher-income earners and those in professional occupations’. Since this group has been hit pretty hard by the recession, it's no great surprise that they're reining in their spending - and charities are among those losing out as a result.

A drop of £1.3bn is always unwelcome. But arguably, it could have been a lot worse - after all, not even the most altruistic types can be expected to go handing piles of cash to charity when they’re uncertain about their own financial prospects. And if those dedicated donators just started ticking the little Gift Aid box, a good chunk of this shortfall could be eliminated at a (key)stroke...

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Credit-crunched public giving less to charity
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