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A fall in giving

Author:  Sarah Smith

A fall in giving

CAF and NCVO have today published the latest UK Giving report showing a decline in donations to charity. The estimated total amount donated to charity by adults in 2011/12 was £9.3 billion, a decrease of £1.7 billion in cash terms, and a decrease of £2.3 billion in real terms, compared to 2010/11.

Much of this decline is likely to be attributable to the ongoing economic climate. Looking at historical data, we know that donations were fairly resilient in previous recessions in the early 80s and early 90s. But this recent recession has lasted much longer and now appears to be hitting giving hard. In the past, donations have also tended to rise strongly when the economy grows, so let’s hope this bodes better for giving bouncing back in the future.

However, analysis that I recently did for CAF points to clear generational patterns in giving that may be more worrying for the prospects for donations. The research highlights a divide between pre- and post-war generations in terms of trends in giving. Among pre-war generations, there was a clear tendency for subsequent generations to be more likely to give at each age than their predecessors, and to be more generous. Among post-war generations, these trends – particularly in the proportion giving – have been going in the other direction. As a consequence of these generational changes, the giving population is ageing. Thirty years ago, around one-third of donations came from the over-60s. Today it is more than half.

A number of commentators have questioned these findings. In the discussion that followed the report’s publication, a number of points were raised about the analysis, all of which were legitimate, but none of which invalidated the research findings.

First – it was argued that we would expect some ageing of the donor population since the general population has been ageing. This is true, but the donor population is ageing faster than the general population. As noted in the original report, the share of giving done by the over-60s has been rising much faster than their share of total spending.

Second – the analysis focused on giving at the household level since many couples make joint decisions about giving. The rise in single-person households mean that the composition of households today is not the same as it was thirty years ago. But the same trends in giving are present if the analysis is done at the individual – not the household – level. The generational divide is not something that can be explained by the rise in single-person households.

Third – much of the media analysis focused on low levels of giving among young  households (in their 20s and 30s). This led many to point out – quite rightly – that people in their 20s and 30s today face many new financial pressures that their predecessors did not – from student debt to high house prices. But, the report is clear that the generational divide is one between the pre- and post-way generations, not something that is unique to today’s 20 and 30-somethings. People in their 50s today (the 1960s baby boomers) are less likely to give than today’s older households did when they were at the same age.

A number of factors may explain the generational divide – including changing religiosity, wider trends in civic participation (interestingly, other people have found similar trend when they have looked at voting, for example) and even the growth of the welfare state which for some people reduces the rationale for giving to charity. It is hard to say for sure why the post-war generations are less likely to give than their pre-war predecessors, but important to bear these long-term trends in mind when looking at the latest dip in giving.

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