Keep calm and carry on giving!

It’s traditional to do a story about giving at Christmas. After all, that’s what the season is meant to be all about. So I suppose it’s rather fortuitous that the sector press has been abuzz recently with stories about whether individual giving to charities is going down, up or staying stable while all around are losing their heads in the continued uncertainty of the economic deficit.

Last month saw the release of CAF/NCVO’s ‘UK Giving 2012’ saying that donations by the public have fallen by 20% in real terms this year (that’s £2.3 billion!) You may have caught my recent rant about the generation gap not being what it might seem at first glance. But now we have a totally separate, long-running survey of more than 3,000 individuals, asked in 3 tranches in 3 different months, showing a marked fall in giving to charity. Now is it time to panic? Well, I have my doubts – not about the survey (I worked on this particular survey myself when I was at CAF and I know the rigours of the Office for National Statistics who actually run it) – but about whether we should panic yet. 

In an excellent blog on the debate (including a really cool research cartoon - yes, they do exist!), Karl Wilding, Head of Policy, Research, and Foresight  at NCVO, reviews the evidence and ends on this note:

“it is possible we are wrong: these are, after all, estimates…This is one set of estimates, a point on a line. And just as one swallow doesn’t make a summer, so one data point doesn’t make a trend…”

Personally, I’d like to see further data before pushing the panic button, however, this should rightly start us discussing and thinking about how we can and should react if this does turn into a downwards trend. Would any of us really be that surprised? OK, the scale of this fall raises eyebrows, but anyone in any doubt that our economic situation is gloomy right now clearly has their head stuck in the sand.

Let’s briefly examine the additional evidence:

Giving is falling

The UK Giving report highlights a fall in the proportion of donors using the Gift Aid scheme to top up their donations – the first reported fall since the beginning of the survey in 2005/06. This coincides with the reported fall in the average gift size, since it is usually the largest gifts which are Gift Aided (there’s been a 5% fall in the share of total donations made up of gifts of £100 and over, over the last year according to UK Giving 2012). Our own recent Gift Aid Report shows that net donations through Gift Aid fell, in real-terms, for the first time since 1995/96 when individual giving also fell significantly, following the recession of the early 1990s. It has been suggested that charitable giving is a lag indicator, as it tends to be one of the last items of personal expenditure which people reduce in hard times, meaning that reductions in giving now, reflect reductions in income two or three years ago.

Giving is rising

Published in Third Sector as I wrote this article, an analysis of charity accounts drawn from quarterly Charity Commission statistics shows that total income rose by £3.2bn to £58.9bn during 2012. Total income is made up of much more than individual giving, including statutory and trading income, however the analysis shows that income was up across the boards. Voluntary income showed the lowest increase at 3.6 % or £639m but this is still a substantial amount. To temper this slightly it must be added that many charity accounts included in the analysis cover 2011 rather than 2012, however the author of the analysis claims that the figures show a sector still growing faster than inflation.

Giving is stable

On the one hand there’s the Institute of Fundraising who have reported that their members are not experiencing plummeting levels of giving, although they do not report numbers. Then there’s Locality, who are reporting that two-fifths of their membership have experienced a fall in their total income in 2012 of around 8% on average – although that’s only 218 charities. Membership surveys and the like are not terribly useful in cases like these as they tend to be too small to be significant and slightly more homogenous than the sector at large.

A good indicator of giving is large national appeals: BBC’s Children in Need which took place in November, raised £26.8 million during the live show, a sum which, in real-terms, barely surpassed last year’s total, by around £100,000.

Other evidence

Indicators such as Net National Income per Head and Gross Domestic Product – good indicators of living standards – have both fallen over the last five years to second quarter 2012. As we have argued elsewhere, wellbeing may be a better indicator of giving and participation in Big Society than economic measures. We have shown that there may have been a relationship between falling wellbeing scores in the Middle East and the decline in civic engagement, even while GDP was rising in some of those countries just prior to the Arab Spring. Gallup figures for the UK in 2012 show a 0.1% decline in wellbeing as measured by the ‘best possible life’ today and a 4.8% fall in ‘thriving’ which includes an element of future-gazing (worldview.gallup.com).

Keep calm and carry on giving!

So the jury is still out on whether giving is up or down. I’d like to echo Richard Harrison, CAF’s Director of Research, when he said recently that we are in relatively uncharted waters here. The UK economy has never faced such a prolonged and deep recession, and with the Autumn statement’s gloomy forecast that austerity measures will now last until 2017/18, there is no let up in the immediate future for the voluntary sector in particular.

The reality is that different charities will be experiencing the current times in different ways. Let’s not panic yet, Mr. Mainwaring, but we’d be foolish to ignore the plight of those charities who are suffering. We probably need to be doing more to boost giving wherever and however we can, so DSC will be supporting the new Back Britain’s Charities campaign because it’s always good to remind people to give more.

And talking of giving more, DSC continues to support the independent ‘Give More’ which has just launched a Christmas campaign to get people to create their own free, personalised Give Guide of practical things they can do for charity this Christmas and throughout the year to come. Now that’s what I call a great Christmas gift for the sector!

This blog first appeared in the Christmas 2012 edition of e-news from Directory of Social Change