Mind the Giving Gap - Unleashing the potential of UK philanthropy

December 2021
The Law Family Commission on Civil Society
ProBono Economics

The UK’s strong tradition of philanthropic giving has helped to build the charity sector we see today: an agile, diverse group of tens of thousands of organisations, employing hundreds of thousands of individuals and improving the lives of tens of millions. The sector came to the fore during the Covid pandemic, responding rapidly to provide support to those who had nowhere else to turn. Yet, the pandemic also resulted in many charities needing to manage a sharp and ongoing rise in demand and a precipitously falling income.

PBE estimated that charities were facing a £10 billion funding gap in 2020, with 49% of organisations reporting that they lost income during the pandemic. This dramatic change in the financial fortunes of many charitable organisations came after a decade in which securing sufficient and sustainable funding has become an increasing challenge and a defining concern for many organisations.1 Strengthening and widening philanthropy is core to tackling this sustainability challenge, both to support the sector in its recovery from the pandemic and to ensure it can fulfil its potential for all who could benefit from it in the decades ahead.

As part of the Law Family Commission on Civil Society, PBE is investigating how to support and encourage philanthropic action. The Commission aims to improve the current level of UK philanthropy, including charitable giving by individuals. It is also interested in how effective philanthropy is and how to support better philanthropy. This topic is the subject of a sister report to this one, Better Giving, 2 as well as a series of essays from long-term observers of the sector.