UK Charitable Giving ‘Recession-Proof’ - Report

Charitable giving by UK households is largely recession-proof, according to new research by the University of Bristol and Cass Business School.

But 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 in the UK today give 0.4% of their spending to charity – exactly the same as they did in 1988.

The study is called The new state of donation: Three decades of household giving to charity. 1978 – 2008

The researchers also found 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 co-author Sarah Smith from the University of Bristol commented on the findings saying the relative stability of charitable giving is both good and bad news for the sector.

Smith says 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.

She says that 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, Smith says there is little evidence that they have brought about a steep change in how much people give.

Report co-author, Cathy Pharoah says the good news is that the long-term decline in the proportion of households giving was been halted in the 2000s – and donations have been very resilient to the recession.

But she says it remains a challenge to bring about a substantial increase in giving as a share of households’ total spending.

The authors of the new research – 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 – say the findings present a unique insight into UK households’ charitable giving over more than 30 years.

The study found that 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%.

• 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% 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% of donors account for 22% of total donations, compared with 16% 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% of givers donate 3.6% of their total spending to charity, compared with 1.1% for the richest 10%.

The paper, The new state of donation: Three decades of household giving to charity, 1978 – 2008, by Edd Cowley, University of Bristol, Tom McKenzie, CASS, City University London, Cathy Pharoah, CASS, City University London and Sarah Smith, University of Bristol, can be downloaded at: http://www.bristol.ac.uk/cmpo/publications/other/stateofdonation.pdf