Charities feel the pinch as donations drop

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Chastened by an impending economic downturn and with their consciences unpricked by major disasters, Britons this year gave 200m less to good causes than in 2006, sparking concern that charities will have to cut their budgets in the face of decreasing donations from a falling number of donors.

An annual report on how much people in Britain give to charity has revealed for the first time a significant drop in the numbers prepared to put their hands in their pockets, causing a 3 per cent fall in donations to £9.5bn. The largest drops in giving came from people aged between 25 and 44.

Charity bosses said a year that had passed without a disaster on the scale of the Asian tsunami in 2004 or the Pakistan earthquake in 2005 had contributed to the reduction, although it was unclear whether this was due to so-called "disaster fatigue" or the peak of giving that those events generated merely returning to more normal levels.

Another factor was the concern that falling house prices and a slowing economy are affecting the willingness of people to make regular donations, according to the study carried out for the National Council for Voluntary Organisations (NCVO) and the Charities Aid Foundation (CAF).

Stuart Etherington, the chief executive of NCVO, said: "We don't know yet if this is just a blip, rather than a trend of people becoming less generous to charity. Individual donations play a huge role in funding the work that charities carry out, so we hope that worries such as increasing debt and falling house prices won't put people off giving to the causes that need them."

A survey conducted for the report found that 54 per cent of people had given to charity in the previous four weeks a fall of 3 per cent on the previous year. A separate review of charities' accounts found that income from personal donations also dipped from £9.7 bn in 2005-2006 to £9.5bn last year, the first time that figure has fallen since the survey began.

The findings mean that Britain's 160,000 charities will be more reliant on their commercial activities and donations from business to achieve growth in their income or face increased competition for the funds available from individual donors. Overall, income to the charity sector has been growing by between 4 and 9 per cent per annum but the amounts received by individual organisations varies widely, with some more reliant on personal donations.

John Low, chief executive of CAF, said: "Charities are reliant on the increasing generosity of a diminishing number of donors. But, with the overall amount that people tell us they give to charity this year goingdown slightly, it's more vital than ever that we all try to give what we can."

The only sector to see a rise in private donations was religious institutions, which saw an 8 per cent increase, largely due to larger donations from wealthier contributors.

The study also found a growing disparity in the readiness of men and women to give to good causes. Single men are the group least likely to make donations and, when they do, they are the least generous. The proportion of men who give regularly fell by 5 per cent to 48 per cent last year, compared with a 1 per cent drop to 59 per cent among women.

Sylke Schnepf, a researcher from the University of Southampton who conducted the study, said: "Women are more likely to give and more generous with their gifts."