UK charities have not suffered as badly as many had feared during the economic downturn, according to a report released this week by Coutts, the private bank, and researchers at the University of Kent.
In fact, donations from the UK’s wealthiest philanthropists and charitable foundations last year were still generous – with 189 donations of £1m or more in 2007 and 2008, down only slightly on the 193 made in 2006 and 2007.
The total amount donated in 2007/2008 came to £1.41bn, compared with £1.62bn in 2006/2007, according to the research.
Wealthy individuals provided half of the £1m-plus donations, with another third coming from foundations and 10 per cent from corporations.
Universities and other centres of education attracted the most money, while arts and cultural programmes were the second most popular cause. International aid came in third.
The wealthy remain intent on maintaining their commitments to favoured causes, even though many have seen a sharp drop in their income, claims Beth Breeze, author of “The Coutts Million Pound Donors Report”.
She says: “People are still trying to make big donations even though the size of their contributions might be dented. But they aren’t cutting charity out of their budgets.”
About 87 per cent of the Coutts clients polled at a conference earlier this year said they planned either to maintain the same level of charitable contributions or to increase them in the coming months.
Such evidence of the charity’s sector’s resilience to the economic downturn contrasts sharply with the steady stream of recent news about job cuts and dramatic falls in returns from bank accounts.
The UK’s 1,000 multi-millionaires listed on “The Sunday Times Rich List” in 2009 saw a 37 per cent fall in their collective wealth to a 21-year low of £258.27bn while the Centre for Economics and Business Research (CEBR) recently reported that the number of UK-based millionaires had halved since 2007 to 242,000, due to the collapse of the property market and falling stock markets.
The economic meltdown is also encouraging philanthropists to keep a low profile. Lavish fundraising galas are out and anonymous donations are in, claims Breeze. In 2007/2008, the number of million pound donations awarded by donors who hid their identities doubled in the UK and tripled in the US, according to the Centre on Philanthropy at Indiana University.
Three reasons explain the slight upswing in interest in anonymous giving, according to the Coutts report.
First, donors appear to believe that ostentatious displays of wealth look out of place when many face financial difficulties.
Second, donors may feel sheepish if they are paring back their donations to one cause while maintaining the same level of contributions to another.
And lastly, some donors may want to hide their identities simply because they have no intention of supporting a particular cause in the long run.
Salvatore La Sala, chief executive of the Institute for Philanthropy in the UK, also notices changes in the ways donations are being made in these tough times. One trend is for more philanthropists to view their donations as investments. Also, many are taking a more activeinterest in how the charities they support are run.
“Younger donors not only want to give, but they also want to get involved in the organisations they support,” La Sala says. “They are keen to volunteer and give their time as well as direct financial resources.”
