Charity donations fall as demand for their services grows

The effects of the slowing economy are having a huge impact on charities, according to a survey by the Charities Aid Foundation (CAF) and the Association of Chief Executives of the Voluntary Sector (acevo).

The poll asked CEOs of small, medium and large charities for their views on the slowing economy and how this has impacted on their charity over the last 12 months. The findings show that 72 percent have seen demand for their services increase. Almost a third of the charities surveyed (30 percent) have seen individual donations fall and a further 30 percent have seen no significant change over the same period.

Inflation is also impacting on charities with 71 percent seeing their costs increase. A clear majority (88 percent) of CEOs expect charity income to drop over the next 12 months and three quarters (75 percent) believe the country will enter an economic recession.

Charities are reacting in a number of ways. Nearly a third of charities (29 percent) have made staff redundancies. Over half (56 percent) have limited staff pay increases. Fundraising activity has been ramped up in 77 percent of charities. Meanwhile, 63 percent have increased grant applications.

This differs to what was seen in the previous two recessions. CAF research at the time found that individual donations remained relatively stable in the1980s and 1990s.

Dr John Low, Chief Executive of the Charities Aid Foundation and Chairman of acevo commented on the findings: "This research reveals the economic quandary that many charities are facing - increasing costs and demand for their services against a backdrop of static or declining public donations.

"Although one answer would be for everyone to give more, we estimate that around £700 million is wasted in unclaimed tax. If every person who pays tax made their donations using Gift Aid, this would provide a lifeline for many charities in the current economic climate."