The state of giving

Written by Andrew Holt
October 2009

It will come as no surprise that donations made to the UK's 170,000 charities
have dropped by 11 percent over the last year to £9.9bn, which is £1.3bn in real terms.

In what is the most comprehensive research into UK charitable giving habits, UK Giving 2009, published by the Charities Aid Foundation (CAF) and the National Council for Voluntary Organisations (NCVO) shows, amongst other revealing statistics, that the median amount donated per month is £10 per person in 2008/09, a decrease of £1 on the previous year. Not bad in the circumstances.

Overall, the relatively good news is that whilst the economic downturn has affected the total amount given, there has only been a 2% fall in the number of adults in the UK who donate to a charity each month, to 54 percent. In numerical terms this equates to 774,000 fewer people giving.

The average, or mean, donation amount was £31 per donor in 2008/09, a decrease
from 2007/08 of £2. However, the mean may not be the most helpful indicator of the typical gift, as a small number of very large donations have a big impact on average values.

As a result, changes in the mean gift are driven by a small number of donors.
The median monthly donation - arguably a better indicator - has remained relatively stable over the past three years and stood at £10 per month. Nevertheless, the recession is likely to prompt donors to reassess their giving; a recent Just Giving
survey of online donors suggested that 8% of respondents were considering making significant reductions in their level of giving.

UK Giving notes that it seems people are still trying to give what they can, but that they are able to afford less than in the previous year.

Recent research from Barclays Wealth (Tomorrow's philanthropist) into the giving
habits of high net worth individuals may substantiate this; while the majority of wealthy donors planned to either maintain or increase their level of giving, almost a third were planning to decrease their charitable expenditure.

Stuart Etherington, chief executive of NCVO, noted the impact of the recession in these numbers. "Inevitably the recession is having an effect on charities, and on the levels of giving. But it would be wrong to predict the collapse of the sector because of the current climate.

"It is reassuring to know that the public are continuing to support the vital work that
voluntary and community organisations do in local communities across the country." A small number of donors continue to generate a large proportion of the total amount donated, a pattern evident since the survey began in 2004.

In 2008/09, two million people (7% of donors) gave more than £100 per month,
but these donors generated almost half (49%) of the total amount given to charity.
The work of many charities is clearly reliant on these higher-level donors.

Popular causes
Conversely, most donors gave much smaller amounts: 11.3 million people (42% of donors) gave under £10 in a typical month. Whilst this is a significant number of donors, these donations comprise only 5% of the total amount given.

CAF chief executive John Low though noted: "Even though there are welcome signs the recession is technically ending, the economic downturn is still severely impacting charities, many of whom have had to cut jobs while facing increased demand for their services."

As for the areas of giving: medical research (20%), hospitals and hospices (15%) and children and young people (14%) are the most popular causes. Cash remains the most common method of giving with nearly half of donors (48%) giving cash and around a third of donors (31 percent) giving via direct debit.

On a gender basis, 58% of women gave to charity compared to 49% of men. Within all age groups women were more likely to donate than men.

On average, men tend to give larger amounts than women (the mean amount given is: £32 compared to £30 per month, respectively), but, this trend does not hold for each age group. For example, in the youngest age group women donate on average twice as much as men, with the mean amount given £16 for women compared to £7 for men.

The report also suggests that the likelihood of giving increases with age. In 2008/09, the biggest increase in the proportion of people giving was in the over-65 age group, up by 4% to 58%.

This age group now has the highest proportion of people donating. This is much higher than the youngest age group, where 38% of people donate to charity.

Although there has been a decline in the proportion of people giving who are employed in managerial and professional occupations, down by 2% since 2007/08. This is coupled with a significant decrease in the median monthly donation for this group.

Donations from managers and professionals account for a significant amount of the total given (61%), so any decrease in giving by this group will impact disproportionately.

There has also been a 4% decline in the proportion of donors in routine and manual positions. Conversely, there has been a 5% increase in donors from intermediate occupations 9 over the same time period.

Whereas, analysis of donors' income by quartiles highlights the relationship between income and charitable giving; with over half of the individuals in each income band donating to charity, but there is a clear trend that as income rises the likelihood of
giving also tends to increase: 52% in the lowest income band gave to charity compared with 62% in the top income band.

The proportion of donors in the bottom half of the income distribution has remained steady, while in the top half the number of donors has declined. For the top income band there has been a 6% fall in the proportion giving, down to 62%, reflecting the decline in giving among managers and professionals.

Despite this fall, donors on higher incomes still give larger amounts on average. The
mean amount per donor in the top income band was £43 in 2008/09, compared with £21 in the lowest income band.

Income bands
For the top three income bands, there has been a fall in the mean amount given since the previous year, which is indicative of fewer large donations being made. In the top income band the proportion of higher-level donors (those donating over £100 in a month) has decreased by four percentage points since 2007/08, down to 11%.

Summing up the report, Professor Paul Palmer of voluntary sector management at
Cass Business School, said: "Too often statistics are given on the sector based on
one year. The value of a longatitudinal survey allows for trend analysis and context. Of real value is being able to understand the impact of recession on the sector, authoritive information that we did not have previously.

"Of course now we know that the sector has been affected like everyone else from
a practitioner perspective this explains some of the cautious planning and contigency behaviour adopted by charities earlier this year."

Worringly, every year it is estimated that around £750m of Gift Aid goes unclaimed on donations. Reinforcing this, UK Giving found that only four in ten donors Gift Aided their donations.

Low noted: "It's a reminder of what a generous nation we are that people are
continuing to support their favourite causes, helping others when they
themselves are feeling less wealthy.

"If all taxpayers tick the Gift Aid box, or give through Give As You Earn it
would go a long way to make up the shortfall in funding without costing them
a penny more."

A full copy of UK Giving 2009 can be downloaded from the CAF
website at: www.cafonline.org/ukgiving or the NCVO website at http://www.ncvovol.
org.uk/research/giving.



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