Donations to larger charities fall by 11%

Donations to charities with an income over £10m fell by nearly 11% (approximately £855m) between 2007 and 2009. In comparison, the income of medium-sized charities, those with an income between £500,000 and £10m, rose by 2.2 % over the same period, according to new research by the Charities Aid Foundation (CAF).

The findings are based on information from the annual Charity Commission returns of 162,363 charities. It looked at donations including gifts, legacies, grants and endowments.

Jane Arnott, senior advisory manager at CAF says: “Companies and individuals will have pulled back on their discretionary expenditure to focus falling resources on the essentials, whether that’s salaries or the mortgage.”

However, she is surprised that larger charities have been affected so badly and comes up with three possible reasons.

1. People are cutting back on long-term commitments to charity but are still happy to put money in collecting tins or sponsor family or friends.
2. Donors may feel they need to support smaller charities, particularly in hard financial times. 
3. Larger trusts and foundations will have been affected by low interest rates and therefore can’t give as much in grants.

The National Council for Voluntary Organisation’s (NCVO) head of policy and research, Karl Wilding said: “If the largest charities were hit hardest, this would reverse a long-term growth trend. The question therefore is: is this a blip, or a more fundamental shift in who the public are supporting and how much they are supporting them?”

The CAF research showed that smaller charities with an income under £500,000 have seen a modest increase in voluntary income but this is below inflation. Arnott adds: “We fully expect charities to continue to experience difficulties over the next few years.”