Charities missed the boom, now face financial gloom
The UK gives less of it’s wealth to charity now than two decades ago. Charities have seemingly missed out on the last 15 years, Britain’s longest period of sustained economic growth in over a century. Kyriaki Karadelis investigates why as the credit crunch threatens to make giving fall further
An expert in charity funding has revealed that giving now stands below one per cent of GDP. "Twenty years ago", cautions Cathy Pharaoh from London's Cass Business School, "it was just over one per cent."
Co-director of the Centre for Charitable Giving and Philanthropy Ms Pharaoh says it's a significant fall, but warns what’s really significant is that it hasn’t been growing all this time. And she predicts that in the short term future, things will only get worse.
“The amount given is directly related to the amount of money people have in their pockets,” she says. “The credit crunch will affect charitable giving.”
Although we gave an estimated £9.5bn to charitable causes in 2006/7, this figure is three per cent less than the previous year according to the Charities Aid Foundation, an organisation that provides financial services for charities.
CAF spokesperson George Leigh explains fewer people are giving while the amount of money flowing through to charities is buoyed up only by large donations from a few wealthy individuals.
Although the professional body for charity chief executives is optimistic about the future, it thinks charities have to alter their approach. “The nature of charitable giving has changed in the last decade or so,” says policy officer Catherine Deakin from ACEVO.
“I think there’s a big challenge ahead for the third sector in how to connect with the general public. What’s acceptable fundraising practice for getting cash? How do the public feel about us spending ten per cent of our revenue on administration costs? What do people feel about an old lady giving pennies to a charity when they have a government contract?”
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