21/07/10

By Andrew Holt

New research from Investec Bank reveals that donations to charities made by UK adults has fallen by 9.6% during the first six months of this year, when compared to the same period in 2009.

Some 10.74 million people claim to have reduced their donations, compared to only 10% of the population who have increased them.

Just over one in ten people claim that the amount of money they have given to charities so far this year is down by 50% or more on the same period in 2009.

Other key findings include:

Donations are down 14.8% in the North West - the biggest drop in the country

The corresponding figure in the North East is 1.7% - the smallest drop in the UK

10.74 million people (23% of the population) have reduced their donations during the first half of this year when compared to the same period in 2009, compared to only 10% who have increased them

Just over one in ten people claim that the amount of money they have given to charities so far this year is down by 50% or more on the same period in 2009

During the first half of this year, 26% of people have not donated anything to charities, and a further 48% have given less than £50 in total

On an age basis, those aged 34 - 44 have seen the biggest drop in their donations to charities (down 14.9%) compared to 2% for those aged 18 - 24

Charities are also being hit hard by the derisory returns being offered to them by deposit accounts that are targeted at them.

Investec's research reveals that 57% of these accounts are paying a rate of 0.5% Gross AER or less on balances of £50,000, and 27% are offering 0.1% Gross AER or less. One in ten are paying less than 0.1%

Investec Bank estimates that around 15% of assets belonging to charities is in cash.

In addition to falling donations, Investec also warns that charities have to contend with the fact that many of the cash deposit accounts targeted at them pay derisory interest rates.

Its research reveals that for balances of £50,000, 57% of accounts are paying a rate of 0.5% Gross AER or less, and 27% are offering 0.1% Gross AER or less.

One in ten are paying a return of under 0.1% Gross AER.

Jack Jones of Investec Bank said: “Our findings suggest that in this age of austerity, charities are suffering from falling donations as people have less money.

"On top of this, many of the cash accounts targeted at them are paying derisory rates of returns. Given that charities have around 15% of their assets in cash, they need to make sure that they are receiving a consistently good rate of return.”

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