by Arild Foss
As the economy slows down, donations to charities are at risk of ebbing away. A poll by the Charity Commission last month showed that one in four charities have seen reduced donations from the public over the last year. One in 12 charities has had to reduce staff due to the drop in donations. A number of charities have also lost money invested in Icelandic banks - adding to their problems.
At the same time the financial squeeze makes the charities' services more in demand, with one in five charities experiencing more requests for help. "In worst case scenarios, charities will experience falling donations and revenues just at the point where demand for their work rises", state Jenny Harrow and Cathy Pharoah, co-directors of the ESRC Research Centre for Charitable Giving and Philanthropy, in their Centre launch article Recession and Charities; the paradox of charitable opportunity? (PDF, 54.7 Kb).
Harrow and Pharoah suggests that increased competition between charities, a shortfall in volunteer recruitment, 'donor defaults' from regular donors and uncertain charity brand confidence could be challenges facing the sector. "Some immediate fall-out in the shorter-term may be unavoidable, and charities may benefit from beginning to focus on the medium-term", the authors add. Realistic cost assessments, cultivating the relationship between charities and their donors, local networking and affirmative fundraising events are all measures to help survive the lean times.
"Some immediate fall-out in the shorter-term may be unavoidable, and charities may benefit from beginning to focus on the medium-term"
How charitable resources are distributed, and how charitable giving is perceived by donors and recipients, are issues studied by Professor John Mohan in the ESRC-funded project Charity and social redistribution: quantitative and qualitative perspectives. The research includes looking into people's choices of how much to give and who to give it to.
Professor John Micklewright at the University of Southampton is examining why people give to specific causes such as international development. The ESRC-funded research project Giving to Development will study the motives for giving to development charities, and how giving responds to changes in income and government spending on development.
As part of the same award Dr Greg Piper at the National Council for Voluntary Organisations and Dr Sylke V. Schnepf at the University of Southampton examined Gender differences in charitable giving (PDF, 124 Kb). The research confirmed the claim that women are more likely to give to charity, and that single women give larger amounts than single men. However the mean amount donated is higher among men than women, due to the comparatively large amounts given by the highest-level male givers. Marital status has a 'pronounced effect' on giving behaviour, with reduced gender differences in giving compared to single people. The reason could be that donations change from being an individual decision to becoming a household decision.
In the current climate it is becoming increasingly clear that charities are no more 'recession-proof' than other parts of society, as Jenny Harrow and Cathy Pharoah point out. Evidence that some charities are performing better than others "may be an indication that donors and funders are approaching their charitable giving in the same way as other spending - with a careful eye on priorities, returns and value for money", they conclude.