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The voice of Scotland’s vibrant voluntary sector

Published by Scottish Council for Voluntary Organisations

TFN is published by the Scottish Council for Voluntary Organisations, Mansfield Traquair Centre, 15 Mansfield Place, Edinburgh, EH3 6BB. The Scottish Council for Voluntary Organisations (SCVO) is a Scottish Charitable Incorporated Organisation. Registration number SC003558.

Rising living costs hammering donations

This news post is over 1 year old

Some five million people chose not to give

Charity donations are continuing to be affected by rising household costs with 4.9m individuals choosing not to make a one-off donation last month as a direct response to the rising cost of living.

Nearly one in 10 (9%) said they held back from donating, according to Charities Aid Foundation (CAF) UK Giving research.

Worryingly, more than 3.2m people (6%) also said they reduced or stopped a regular payment to charity because of increasing living costs.

This will be a particular concern for the many charities who rely on regular income from direct debits and standing orders. 

Meanwhile, nearly one in five (19%) are considering cutting back on their donations, compared to 14% six months previously. In August, this number rose to 22% as household concerns around energy bills peaked. 

CAF’s UK Giving tracks household donor behaviour every month and reveals how levels of donations continue to trend downwards. In September, only a quarter (26%) of people said they had donated in the previous month. Prior to the pandemic, around a three in ten (30%) usually said they gave to charity in September.

The average monthly donation also declined slightly in September, with a mean donation of £51, compared to £67 in August.

Summer has traditionally been a popular time for sponsored sporting events, and September saw the build-up to the London Marathon on 2 October. However, only 8% of people sponsored someone for charity last month and 5% in August.

Neil Heslop, chief executive of CAF, said: “Charities need donations now more than ever, as more families rely on the vital services they provide. Mass giving is crucial for many charities, so as people cut back, Government and private sector funding which supported charities through the pandemic is greatly needed to help them through this crisis.

“With more than £500m of Gift Aid unclaimed which should rightly be with charities delivering frontline services, the process needs to be simplified to deliver desperately needed funds. The government also needs to address the current complexity of the VAT system since it’s estimated that the sector loses billions paying tax that they cannot recover later.

“Despite falling donations, charities are working hard to help the growing number of families at the sharp end of the cost-of-living squeeze. But ultimately, charities are having to do much more, with much less money.”

Inflation is also eroding the value of charity donations. Recent analysis by CAF and Pro Bono Economics estimated that a charity donation of £20 started in 2017 will be worth just £14.90 by 2024, according to projections.