New data reveals true impact of recession on donations

New data reveals true impact of recession on donations


Financial analysis of the UK’s top 500 charities’ suggests a slight decrease in voluntary income as a result of the economic downturn, but continued generosity from donors.

The Charity Market Monitor 2010 records a 1.1% drop in the major charities’ voluntary income in 2008-2009; the overall real loss of income from all sources equates to £104m.

In addition, support for charitable causes from the major philanthropic foundations fell by 7%, despite the larger drop inas foundations' investment income of 13.6%. 

The report’s author, Professor Cathy Pharoah, Co-Director of the ESRC Centre for Charitable Giving and Philanthropy at Cass, said, “This report provides the first hard evidence of how the economic downturn took a toll on charity finance. The public clearly continued to prioritise charitable giving. Individuals and companies continue to get involved in charitable activities, to donate resources in many different ways, but there was simply less money to go around.

There is a lot of generosity on which to build, and government has promised to support the ‘Big Society’ through encouraging charitable giving and social enterprise. The results of this research show how important this will be if charities are to play their part. However, the question of how far charities will be able to respond to increasing needs remains unanswered.”

Charity Market Monitor 2010 also revealed the following results:

• The top 10 most popular fundraising charities remain largely the same year on year, with the only notable change being the British Heart Foundation which jumped from 9th/10th place to 3rd in 2010, and the RSPCA which slid from 7th to 10th place, between 2007 and 2010.

• Based on the table of the major fundraising income streams of the UK's largest fundraising charities (top 500) only 111 charities raised more than £10m in voluntary income and just 10 raised over £100m. They were Cancer Research UK, Oxfam, British Heart Foundation, Royal National Lifeboat Institution, NSPCC, Macmillan Cancer Support, The Salvation Army Trust, The British Red Cross Society, Save the Children UK, and Royal Society for the Prevention of Cruelty to Animals.The fundraising income is made up of legacies, trust donations, regular giving, fundraising appeals, community fundraising, corporate donations, other donations, events, and undivided donations.

• The value of legacy income has fallen by 3.9%, affecting half of the charitable causes amongst the top fundraising charities including social welfare, hospices, the blind, children and disability. This is confirmed by findings in CGAP’s recent report The Legacy of the Recession which shows the value of legacy giving to charities fell by an estimated £57m in 2009 compared to the previous year, a 3% drop, despite an 8% rise in the number of people leaving money to charity in their wills in the same period.

• The major charities earned £5.9bn in donations and legacies in 2008/09. The success of appeals such as DEC's Haiti Earthquake Appeal which raised £94m in just a few months, shows how donors continue to respond to charity need, but economic constraint led to an overall 3.3% drop in the value of donated income.

• The new figures show variable public support for different charitable sub-sectors. Donations to health and services benevolent causes continued to rise, but other causes experienced a fall, such as the 8.2% drop in income for disability causes, falls in the value of legacy income to charities including Leonard Cheshire Disability and Scope, and a fall in the value of donations and legacies to the Royal Star & Garter Homes. Such falls exacerbate the difficulties arising as a result of government savings targetting disability benefits.

The Charity Market Monitor 2010 (CMM) produced through a partnership between academics at Cass’s ESRC Research Centre for Charitable Giving and Philanthropy and CaritasData, costs £185 and is available from publishers Waterlow Legal & Regulatory.