Rising cost of living sees charity donations downsized

Rising cost of living sees charity donations downsized

The rising cost of living and uncertainty surrounding energy bills is already being felt by the charity sector with nearly five million people choosing not to make a one-off charity donation last month.

As household budgets feel the pinch, nearly one in ten (9%) people said they held back from donating, according to Charities Aid Foundation (CAF) UK Giving research.

Worryingly for many charities that rely on direct debits and standing orders, more than 3.2m people (6%) also said they had reduced or stopped a regular payment to charity because of increasing living costs.

The research also reveals nearly one in five individuals (19%) are considering cutting back on their donations, compared to 14% six months previously. In August, this number rose to 22% as household concerns around energy bills peaked.

CAF’s UK Giving tracks household donor behaviour every month. The tracker reveals how levels of donations continue to trend downwards. In September, only 26% of people said they had donated in the previous month. Prior to the pandemic, around 30% usually said they gave to charity during September.

The average monthly donation also declined in September, with a mean donation of £51, compared to £67 in August.

Summer has traditionally been a popular time for sponsored sporting events, and September saw the build-up to the London Marathon on 2nd October. However, only 8% of people sponsored someone for charity last month and 5% in August.

Neil Heslop OBE, chief executive of the Charities Aid Foundation, said: “Charities need donations now more than ever, as more families rely on the vital services they provide. Mass giving is crucial for many charities, so as people cut back, Government and private sector funding which supported charities through the pandemic is greatly needed to help them through this crisis.

“With more than £500m of Gift Aid unclaimed which should rightly be with charities delivering frontline services, the process needs to be simplified to deliver desperately needed funds. The Government also needs to address the current complexity of the VAT system since it’s estimated that the sector loses billions paying tax that they cannot recover later.

“Despite falling donations, charities are working hard to help the growing number of families at the sharp end of the cost-of-living squeeze. But ultimately, charities are having to do much more, with much less money.”