Generosity gap widening

Britain’s richest have been donating less to charity despite soaring incomes, a new study has revealed.

Charities have missed out on more than £2bn as a result of a widening “generosity gap” as the nation’s top 1% of earners reduced their average declared giving by a fifth in real terms from 2012 to 2019.

Over the same period donations from the rest of the population rose.

The findings were released as part of a new study by the Law Family Commission on Civil Society, a two-year initiative launched by Pro Bono Economics in December last year to examine how the potential of civil society can be unleashed in the UK.

The report reveals a significant decline in declared donations from the nation’s top one per cent of earners, identified as those with annual pre-tax personal incomes of £175,000 or more.

Charities received £4.6bn in donations in the first half of this year, according to the Charities Aid Foundation (CAF). If that rate continues it would mean the lowest annual receipt in five years.

Among the richest fifth of the top one per cent, those with annual incomes averaging £722,000, the typical declared donation rises to £113 a month, or 0.16 per cent of income.

The analysis reveals that although those earners in the top one per cent, totalling about 344,000 people, earn 14 per cent of pre-tax income in the UK, their declared donations equate to just six per cent of the total donations to charity from the public.

Researchers said this amounts to a “generosity gap” within the super-rich worth a potential £1.4bn a year to UK charities.

Nearly two-thirds of the total value of money donated by the UK’s top one per cent comes from less than 0.5 per cent of the group – equivalent to just 1,700 individuals.

An earlier study from March this year also found that large-scale giving by the super-rich had done almost nothing to redistribute wealth from rich to poor people and could be perpetuating social inequalities.

Positively, the overall value of charitable giving from the public as a whole has increased.

In real terms, giving to charities – including donations, legacies and fundraising – has increased from £14.8bn in 2011/12 to £19.6bn in 2018/19.

Across the wider UK population, typical donations among those who support charities stand at about £20 a month.

Chaired by Lord Gus O’Donnell, the commission is calling for action to help close the “generosity gap” among the UK’s highest earners.

He said: “The British public has a rich tradition when it comes to charity, epitomised by the millions of acts of kindness and support we saw at the height of the pandemic.

“But this new research shows that those with the deepest pockets can afford to reach a little further.

“Among the top one per cent there is a generosity gap between a handful who give very significant amounts and the majority who give substantially less.

“The commission is calling for a collaborative effort between philanthropists, the government, business and the charity sector to help close this gap.

“We support proposals for a government-appointed philanthropy commissioner to drive this agenda and would like to see a lead civil servant in the treasury devoted to philanthropy.

“At a local level, the nomination of philanthropy champions working with Metro Mayors could help to ensure philanthropy is directed to the communities that need it the most.”