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MP91011

MAPS CHARITY FUNDING FEBRUARY 2001

Overview

Editor: Market Assessment
ISBN: 1-86111-341-2

This report covers: Charities, funding, top 50 charities by income, government incentives, tax relief on gift aid, funding channels, National Lottery, donations, grants, voluntary work, sponsorship, advertising, direct marketing, direct mail, bequests, endowed trusts, foundations, medical charities, charity cards, children's charities, disaster appeals

Companies covered include: NSPCC, Vodafone Airtouch, BP Amoco, BT, Glaxo Wellcome, HSBC Holdings, AstraZeneca, Smithkline Beecham, Shell Transport & Trading, Lloyds TSB, BSB, British Sky Broadcasting, Save the Children, Salvation Army, NCH, Help the Aged, PPP Healthcare Trust, Wellcome Trust, Nuffield Nursing Home Trust, The Red Cross, Imperial Cancer Research Fund, Marie Curie Cancer Care, National Trust, RSPCA, Oxfam, British Council, Arts Council, RNLI, Church Commissioners, Christian Aid, PDSA, UNICEF

Table of Contents

Executive Summary

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TABLE OF CONTENTS

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EXECUTIVE SUMMARY

Charities’ income in the UK amounts to more than £14bn a year, equivalent to about 1.5 percent of GDP. Charities have an important and expanding role in national life.

This report examines:

• which companies give the most to charity, and why?

• how companies select charities to support

• how charities seek to maximise the regular income they need to meet long term commitment

• public attitudes to charities, and the types of charity individuals are most disposed to support.

There are over 200,000 registered charities in the UK, and another 200,000 non-charitable voluntary organisations. The biggest 10 percent of charities receive over 90 percent of all income. The general public supplies 35 percent of charities’ incomes, and the Government provides almost 30 percent. This is split nearly equally between grants and contracts. Contributions from business amount to less than 5 percent.

The ten largest corporate givers in 1999/2000 were led by two banking groups, Lloyds TSB and Barclays. Two other banks, NatWest Group (now in Royal Bank of Scotland) and Bank of Scotland, were also in the top ten. The other top givers are in communications and utilities, global consumer foods, oil and pharmaceuticals, with just one retailing representative, Marks & Spencer.

Our National Opinion Poll (NOP) survey shows that charities have an image problem.

• Fewer than 30 percent of people think that charities spend money more efficiently than governments would.

• Almost two-thirds would not give more to charity even if they were sure the money would be spent wisely.

• Only one in ten works voluntarily for a charity, and just 3 percent of young people aged 15-24.

• Young people are the least generous to charity, and the peak ages for giving are 45-54.

• People in socio-economic group C1 give more frequently than ABs, C2s or DEs.

• Only two people in a hundred have a CharityCard or bank account specifically for giving.

• Donors give to health and medical charities more often than to any other category.

Looking to the future, legacies will become even more crucial to charities’ finances, and voluntary organisations need to focus, more than at present, on influencing potential large donors. Gift Aid, the CharityCard, and payroll giving will continue to grow, provided that government incentives are maintained and even increased. Ad hoc donations are unlikely to expand much because curbs in public spending mean that individuals will have to fund much more of their own welfare costs, to the detriment of other discretionary spending. In addition, the consumer research shows that charities need to be much more effective in persuading the public of the worthiness of their causes.

Charities’ earned income from the public is likely to fall as their shops struggle and increasingly fail to cover costs, and as cards, gifts and so on lose out to streams of much cheaper commercial goods, often imported.

Public sector funds will come increasingly in the form of fees for work done, rather than as grants, in the interests of value for money for the taxpayer. Income from other organisations in the voluntary sector will be augmented by grants from wealthy charitable foundations.

Increased support from business is likely to be mainly in the form of grants to causes which complement companies’ own objectives, and show the social responsibility which shareholders will gradually come to demand, provided it is allied to a strong commercial performance.

Opportunities for charities to exploit include: the present governments new incentives for giving increased use of the Internet to cut costs of collecting cash and to give online donors feedback on how their money is being sent paying more attention to dialogues with donors, to encourage long term giving encouraging businesses to give young adults time to work as volunteers.

Text © 2001 MAPS

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Last updated by Paul Tucker 22nd August 2001