Issue 201: 2019 05 09: Just (not) giving

09 May 2019

Just (not) giving

Hiding behind issues of trust

by Frank O’Nomics

£10 billion is undoubtedly a lot of money to give to charity.  However, when spread over 165,000 organisations (there really are that many) the money does not go as far as one might hope, and when you look at the trends in the numbers of people giving, the outlook for those charities starts to look distinctly bleak.  A report this week from the Charities Aid Foundation shows a worrying fall in both the number of people giving to charity and those participating in charitable activities.  It seems there is a growing reluctance to give either time or money.  In looking at why this might be happening there has been a considerable focus on the decline in levels of trust towards charities following the scandals at Save the Children and Oxfam, but is this really the principal cause, or are there other factors at work?  The answer matters, as it will have a bearing on the strategies of the government and the charities themselves.

As ever, one should start by looking at the data.  Last year some 65% of the population gave to charity, a number that may look ok in international comparisons (we rank 8th in the World Giving Index), but less so given a fall from 69% two years ago.  Similarly, those engaging in charitable activities have fallen from 68% to 64%.  What makes the data particularly disturbing is that, while women and the elderly are the most likely to give, the least likely are 16-24 year olds, and the proportion of them doing so ‘from time to time” has dropped from 51% to 45%.

In looking at the causes, the evidence for issues of trust looks compelling.  When Save the Children last year suspended its bid for UK government funding bid after allegations of sexual abuse and inappropriate behaviour, it is not surprising that individual donors became reluctant to give.  A similar response was understandable after stories of Oxfam workers abuse of vulnerable women.  In addition to this, there has been a growing condemnation of the ways in which charities have been trying to raise money, whether via “chugging” in the street, or excess mail shots.  The suicide of Olive Cooke, Britain’s longest serving poppy seller, after receiving 3,000 requests for donations highlighted the relentless marketing approaches being used.  These factors must have some bearing on the fewer than 50% of people surveyed by the CAF that “believe charities to be trustworthy”.  Perhaps more disturbing is that 20% regard charities as actually untrustworthy.

There is, however, a danger that surveys such as this play on confirmation bias by the very nature of the questioning.  While the numbers donating to overseas aid and disaster relief charities did decline, from 23% to 18%, this could be put down to there being more high profile causes in the previous year.  Further, when it comes to looking at the total sums given, it is this area that still sees the largest share at 11%; more than medical research (10%), children’s charities (9%) and animal welfare (8%).

Logically there are other factors of both economics and regulation that must also have an impact on charitable giving.  The pressure on real disposable incomes over an extended period, where inflation was running in excess of wage growth, meant that people had less and less spare cash for either luxuries or charity.  A survey by Salary Finance showed that the average British adult has a disposable income of less than £10 per day, with 45% saying that they have some months with no disposable income whatsoever.  When looking at what disposable income does get spent on, eating out features at the top and charitable giving does not even get into the top 10.  This squeeze has now abated, but it is no surprise that it is the16-24 age group that has become less generous.  The actual total amount of charitable giving has remained relatively static around £10bn for the last 3 years, all that has happened is that older wealthier people have been giving more, while younger people give less.  Simply put, charitable giving is, like most spending, heavily influenced by the economic cycle.

The regulatory factor may also have played a significant part.  The story of Olive Cooke and a general discreditation of the way in which personal data was being used resulted in new data protection laws (GDPR), which almost overnight undermined the mailing lists that charities relied upon to solicit donations.  The full effect of this has yet to be felt, but the CAF survey shows that the numbers being approached via direct mail fell from 28% in 2016 to 23% last year, and this is likely to be considerable lower this year, as letters from charities imploring us to allow them to keep our details go unheeded.

That some charities need to do a considerable amount of work improving their governance to address issues of trust is not to be doubted.  Only this way will they regain the trust of both governments and individuals.  However, when many people are asked why they are giving less it may well be that poverty is the reason and trust the excuse.  For charities the strategic shift goes beyond governance and will need to include smarter marketing.

We are at heart a generous and considerate society.  Levels of volunteering and the donations of goods to charity shops have been sustained while the numbers giving cash have slipped.  Whether this trend changes as real incomes start to increase will be the ultimate test of whether there is really an issue of trust in the charity sector.  Maybe we shouldn’t be worried, Sir Stuart Etherington, CEO of NCVO certainly doesn’t seem to be – he tweeted that “fewer people giving larger sums” was “the result of a positive change in charities’ fundraising strategies”.  Only time will tell if he is right.

 

Follow the Shaw Sheet on
Facebooktwittergoogle_pluspinterestlinkedinmail
Share this using...

It's FREE!

Already get the weekly email?  Please tell your friends what you like best. Just click the X at the top right and use the social media buttons found on every page.

New to our News?

Click to help keep Shaw Sheet free by signing up.Large 600x271 stamp prompting the reader to join the subscription list