Proportion of household charitable giving flat - should the sector be worried?
February 2011
A recent report has cast new light on how giving relates to overall individual household wealth and finds little has really changed in the last 20 years.
Charitable giving by UK households is largely recession-proof, according to new research by the University of Bristol and Cass Business School (City University London). However, the study also shows that there has been no change in donations as a share of total household spending for more than 20 years. Households today give 0.4 per cent of their spending to charity – exactly the same as they did in 1988.
The researchers also find that elderly donors and better-off donors account for a bigger share of total donations than they did in the past. But poorer donors are still more generous than richer donors in terms of the proportion of their budgets they give to charity.
Report author, Professor Sarah Smith from the University of Bristol, commented on the findings: “The relative stability of charitable giving is both good and bad news for the sector. It means that charities can rely on donors, even in times of recession. But it also indicates the huge scale of the challenge in raising the level of donations.
“Since the 1980s, there have been increases in the generosity of tax relief, big changes in the way people give to charity and a professionalisation of charity fundraising. While these changes may have prevented charitable donations from falling, there is little evidence that they have brought about a step change in how much people give.”
Report author, Cathy Pharoah, Cass Business School at City University London, commented: “The good news is that the long-term decline in the proportion of households giving has halted since the turn of the century – and donations have been very resilient to the recession. But it remains a challenge to bring about a substantial increase in giving as a share of households’ total spending. We hope that the information in this report will inform policy, practice and research going forward", she said.
The research, carried out by the Centre for Market and Public Organisation (CMPO) at the University of Bristol and the Centre for Giving and Philanthropy (CGAP) at Cass Business School, City University London, looks back over UK households’ charitable giving over more than 30 years.
The main points of the study were:
- The millennium year marked a turning point in the long-term decline in the proportion of UK households that give to charity. Roughly a third of households gave to charity in 1978, but by 1999 this share had fallen to roughly a quarter. In the first decade of the twenty-first century, the proportion of givers has averaged over 28 per cent.
- Average donations have increased in real terms over three decades. Looking at the whole population (both givers and non-givers), donations have more than doubled – from £0.96 per week in 1978 to £2.36 per week in 2008.
- Looking only at givers, donations have gone up three-fold – from £3.05 per week in 1978 to £8.66 per week in 2008.
- But there has been no change in donations as a share of total spending for more than 20 years. Households today give 0.4 per cent of their spending, exactly the same as they did in 1988.
- Charitable giving is largely recession-proof. Donations have typically grown in times of economic growth and have not fallen at the same rate as the economy during recessions.
- Charitable giving increasingly depends on elderly donors. The over-65s now account for more than a third of all donations, compared with a quarter in 1978. Higher giving among older age groups may reflect the values and beliefs of these generations.
- Better-off donors now account for an increasing share of total donations. Today, the richest 10 per cent of donors account for 22 per cent of total donations, compared with 16 per cent in the early 1980s.
- At the same time, poorer givers are more generous in terms of the proportion of their total budgets given to charity. The poorest 10 per cent of givers donate 3.6 per cent of their total spending to charity, compared with 1.1 per cent for the richest 10 per cent.
The full report, The new state of donation: Three decades of household giving to charity, 1978 – 2008, by Edd Cowley (UoB), Tom McKenzie (CASS), Cathy Pharoah (CASS) and Sarah Smith (UoB) is available to download from here.
An executive summary is available here.
A useful discussion of the research by Tom Clark in The Guardian can be found : http://www.guardian.co.uk/society/2011/feb/15/big-society-decline-in-charity-donations
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