Trends in charitable giving

The Charity Commission website estimates that there are around 165,000 charities in England and Wales ; a figure which has remained largely unchanged for some years. However, the environment charities operate in is not steady - it is in constant flux, influenced by societal, political and economic changes. A recent survey of charity Chief Executives reported that 18% fear that their organisation is struggling to survive. Reportedly this a sector which may need to adapt and react quickly to the tightening funding landscape; the last decade has seen charities lose £3.8bn in grants from government. This decrease means that long term planning for charities is becoming increasingly difficult. 

Government funding is more regularly being given in contracts over grants. As a Guardian article explained…’a grant is a payment to help the recipient. In return the grant funder gets nothing back. Under a contract, payment is made in return for goods or services’. Charities are being run more like service commissioners and providers.

This contract culture is argued to be shifting the models and agendas of charities through clauses and agreements: this includes The Lobbying Act, described by a recent article:

Under the Lobbying Act, charities are obliged to register with the election watchdog if they plan to spend over £20,000 in England - £10,000 in the rest of the UK - on so-called ‘regulated activities’. These activities are so loosely defined that they can include any issue on which political parties have a policy on.’

Societal views on the sector are easily influenced. Public trust in charities has fallen – with events such as the collapse of Kids Company, the death of Olive Cooke and ‘the pay of senior management', have meant that the actions of charities - especially in regards to fundraising - have come under severe scrutiny. A new Fundraising Regulator has been established and charities are now being fined by the Information Commissioner’s Office for breaching data regulations. 

During times of change, it is therefore important that charities have a clear strategy and vision to assist in clarity for funding needs. 

Reputation and external influence can impact support, both positively and negatively, so it is important for organisations to be transparent and clearly communicate with their stakeholders. It is also vital for them to understand the trends of support received and giving in the sector, and work to utilise this to its full potential.  

Supporting a charity is often a very personal choice. People support by volunteering or giving donations. Studies has been conducted into why people give and the importance that emotions, personal connections and personal experience relate to this.  Dr Beth Breeze has conducted extensive research in the area of charitable giving - especially in regards to high net worth donors - and a key finding is that they give, and continue to do so, because ‘the experience enriches their own life.’  

The Charities Aid Foundation released a report in May 2016 about UK Giving in 2015. The key findings included that for the first time, children and young people is the most popular cause to give money to at 30%.  Medical research was a close second with 29% and 67% of us have given to a charity in the last year, 42% in the last month.

In times of crisis and shock , the scrutiny of how charities’ use their funds, who is actually administrating the funds, and the issue of public trust dissipate – people give as a reaction to what has happened, to support and to counter-act their feeling of helplessness in the situation.  The use of social media and online giving platforms has had a huge impact on this. A crowd funder set up by the Manchester Evening News for the terrorist attack at the Manchester Arena has, at the time of writing, raised £1,564,093 by 43,841 donors: an average donation of £32 per donor. It is clear that in these instances, the scrutiny of how charities’ use their funds, who is actually administrating the funds, and the issue of public trust seem to dissipate – people give as a reaction to what has happened, to support and to counter-act their feeling of helplessness in tragic situation. 

It is hard to predict the trends in charitable giving: it is an action so dependent on unplanned events, people’s emotions and an ever changing external landscape. Research, such as the report by CAF, is vital in understanding the supporters of the sector and how their behaviour changes. Charities need clear strategies, communication and vision to assist in clarity for funding needs and to acknowledge that no matter what external changes are occurring, their purpose remains the same - to support their charitable objectives.