I see no evidence of a catastrophic fall in giving

Does anyone really believe that giving fell by a whopping 20 per cent last year? I know I don’t. I know of only a handful of charities whose income was challenged in the way that the NCVO suggests, and the evidence from other sources such as the Treasury and nfpSynergy suggests a much more static picture.

While the NCVO might argue that it is largely only the very small charities that have suffered, if the big guns of the sector (who account for 80 per cent of all donations) are reporting static or even marginally increasing levels of giving, then the fall in small charity income must have been pretty catastrophic for a 20 per cent fall to be recorded overall. I see no evidence of that.

I’m equally unconvinced that it is lower value donors who are reining in their charitable donations. Giving is dramatically skewed with a relatively small number of very generous people supplying the lion’s share of the income. If Gift Aid claims are largely static then lower value giving must have fallen dramatically. I see no evidence of that either.

A much more plausible explanation for the figures is the various errors that sometimes creep into even ‘nationally representative’ samples of donors. Sometimes the folk selected turn out to be atypical of the population as a whole or individuals give answers that reflect their mood rather than their genuine behaviour.

My prediction for 2013 is thus that the debate we’re now having about the accuracy of the figures will finally prompt the creation of a panel of charities prepared to count the income from a variety of sources. Such panel data, over time, would give us a much more accurate picture of the true pattern of individual giving in the UK.

 Adrian Sargeant is professor of marketing and fundraising at Plymouth Business School

  • Mark Atkinson

    I would agree that the logic of the fall overall does not stack up especially when set against the recent reports relating to a £3billion increase in sector income. However, I do think it would be useful to look at the median fluctuations in income, expenditure and reserves. It seems to me that looking at income is insufficient by itself and it would be far more appropriate to consider organisational health in the round. One can’t really gauge just how well charities are faring unless this is done.

    Take even the handful of £15million plus charities and whilst you may well see increase in income, if expenditure has outstripped this increase for various reasons then they have to dip into reserves and are consequently not as healthy as they may appear to be if reporting on income alone.

    Conversely, there may well be other charities whose income has fallen but they have found more efficient and less expensive ways of delivering their services and are making a small surplus thereby growing their reserves.

    Mark Atkinson

  • Mark Atkinson

    “The Health of Small UK Charities”

    In light of the recent media frenzy over the state of the UK charity sector, I recently conducted a short poll on a few LinkedIn groups directed at smaller charities. The question posed was as follows:

    “For UK charities with an annual turnover of less than £500,000: In 2013 do you anticipate having to do any of the following: reduce your service levels, make staff cutbacks or dip into your reserves” Participants were given 3 options to choose from “YES, NO, UNSURE”

    Whilst only 11 charities participated, the results were pretty unequivocal with 91% (10 respondents) answering YES and 9% (1 respondent) answering UNSURE. (Note that in order to obtain the results I did have to vote myself but I did not include my vote in the results.)

    Personally, I am a great believer that it is only necessary in very limited circumstances to have a large number of respondents to any poll in order for it to be valid and consequently I regard the views of this small group of charities as representative.

    The result clearly throws up lots of questions and the eager amongst us will no doubt have lots of suggested solutions. Personally, I can’t see any one size fits all approach when it comes to addressing these issues. What may be right for one charity won’t necessarily be right for another. The only thing I would suggest is that any charity which anticipates having to take 1 of the 3 courses of action referenced in the poll needs to answer 3 questions:

    – What to change?
    – What to change to?
    – How to cause the change?

    Mark Atkinson