16 December 2011

By Cathy Pharoah

Has the spirit of Christmas succumbed to the recession? A wave of annual surveys suggests that charitable giving is another victim of the harsh economic climate. A study by the ESRC-funded Centre for Charitable Giving and Philanthropy and Pears Foundation shows that family foundation giving has declined. A Coutts survey suggests that fewer £1million gifts have been made, and the annual population giving survey carried out by the Office for National Statistics (ONS), commissioned by the National Council for Voluntary Organisations and Charities Aid Foundation, indicates that the amount of giving has fallen - though not the number of donors.

Evidence from an ESRC-funded analysis of trends in giving over more than three decades, 1978 to 2008, using data from the annual ONS Living Costs and Food Surveys (LCF) of household spending, shows that the value of giving has typically grown in times of economic growth but not fallen at the same rate as the economy during recessions. Additional data suggests that household giving to charity did not decline in 2009.

However, giving seems more volatile in the current recession than in previous ones. One reason may be that the current recession is different from previous ones - seeing a radical erosion of faith in the financial institutions on which we generally rely to see us through periods of boom and bust. Public confidence may be more fragile.

So can charities hope for a Christmas bonanza? The Deloitte 2011 Annual Holiday Survey says three out of five people will put aside economic worries, and forecasts a 2.5 per cent increase in holiday sales. The good news is that charities can hope to benefit from this. The LCF analysis shows that lower-income households are particularly generous around Christmas, when their giving goes up by 71 per cent. This may reflect ‘saving for Christmas’, while the more affluent give most in the spring, when the submission of tax returns prompts them to take advantage of charitable tax-breaks.

But the uplift in Christmas giving also reflects increased investment in fundraising, as charities look for inclusion on people’s Christmas lists. Most Christmas shoppers or party-goers will encounter Salvation Army bands carol-singing and collecting in the cold. The NSPCC website reminds us that Christmas is a time to think of children, and Centrepoint’s website highlights the misery of homelessness at Christmas.

The bad news is that all this has only short-term effect: giving falls again as the bills roll in. A key insight from the research is that giving is generally resistant to change - and its share of spending has not increased for the last 30 years.