The trouble with The Guardian

January 12 2009 - Mark Phillips

Polly Toynbee in The Guardian on Saturday painted a grim picture of the current state of philanthropy.

Read her article and you could be forgiven for pulling the duvet over your head and hibernating until spring 2010. 

There's Tom Hunter changing his mind about giving away a billion, 52% of people expecting to cut back on giving and the expectation that the best part of £2.3 billion will be wiped off the bottom line of charity income in 2009. One in three charities are laying off staff, corporate giving is being cut back and finally there's the cancellation of a British Red Cross gala ball. 

It sounds hideous. 

But we are then reminded that charitable giving is dwarfed by government expenditure. Charities are pictured as charming and perhaps a little quaint. They are great for the odd good idea but no match for the leviathan which is central government. And we are warned from thinking that charity could ever replace the welfare state.

It's true. Charity Trends 2007 reports that voluntary donations to the top 500 fundraising charities equated to 2.6% of government expenditure (in comparable sectors). The amount varied from 28% for international down to 0.2% for education. 

But is that any reason to present such an awful view of the impact of the downturn on people's attitudes to giving? When you look at the facts, the picture is very different.

Mark Astarita from The British Red Cross is still forecasting modest growth in income next year. It was the lack of a corporate sponsor that meant the winter ball couldn't go ahead.

Tom Hunter still intends to give away £1 billion, but the current financial situation has just extended his timeline. As he says:

“I believed it then and I guess it’s still my dream. I was always very clear it was in my lifetime and my life isn’t over – I’ve still got another 40 years left in me.”

And we need to remember that a massive part of the impact on the sector's bottom line will be from a decline in the value of house prices and shares. This means there will be a fall in legacies and investment income. It doesn't mean solicitors throughout the land will be inundated with pensioners demanding that charities be struck from their wills.  It's just the economic situation means bequests are now worth less.

I've also recently blogged on some fairly large pieces of research that show the numbers thinking of cutting back on giving are going to be much lower than the 52% cited in the article.

Rapp's recent research on directs debit showed that:

  • 8% were considering canceling a direct debit.
  • 11% were considering reducing the amount they gave via direct debit.
  • 12% had cancelled one or more direct debits.

St Mungo's research in November found that 9% were thinking of or had actually cut back.

Our research at Bluefrog showed that the biggest impact was going to be on people's attitude to supporting new charities. And now with Christmas behind us, we can see what is actually happening to warm appeals – donors are still giving. 

An IOF / CAF poll of 35 charities found that over half of Christmas appeals raised as much, or more than in 2007. Nearly one third said their appeals raised more than last year. Five charities say they have received tens of thousands of pounds more than the previous year. One third of charities surveyed said they received less funds but many charities are still counting donations. 

Corporates might be cutting back, the economy might be playing havoc with share portfolios and property prices but individuals aren't letting us down – gifts aren't drying up. And perhaps the best place to see what is happening is where the credit crunch started – in the housing sector. Shelter has seen a massive increase in demand for its services over the last few months. But as Alan Gosschalk, Shelter's Head of Fundraising says:

"We really depend on more than 100,000 supporters who donate via monthly direct debits and they have continued to be very generous. In addition, our Christmas appeal mailing has hit its target, which is great news."

The Guardian is the sector's in-house newspaper. It's where we find our jobs, read news and get views, opinions and predictions to help us plan for the future. In this instance, I think it's let us down.