Creating a culture of giving and philanthropy in the UK will take "decades, if not generations", according to a report by the Community Foundation for Merseyside, but the sector should avoid knee-jerk reactions to cuts, it warns.

Released today ahead of the Foundation's Autumn Philanthropy Seminar tonight, the Desperate Times? Desperate Measures? report claims the loss from the public sector to the not-for-profit sector's income is expected to be in the billions. Charitable giving and philanthropy is "unlikely" to make up the gap, said the report. But it says that the best way to counter the cuts is not by taking desperate measures, but by improving efficiency and creating a new language for working in partnership with the private sector.

Cathy Elliott, chief executive of Community Foundation for Merseyside said: "Our report today explores the role of philanthropy as the landscape changes for voluntary sector funding. We believe that desperate times do not call for desperate measures. To combat this we need to work together across sectors to understand the new landscape, and create, test and develop a new 21st century model together."

In 2010 Prime Minister David Cameron stood in Liverpool to announce four Big Society 'vanguard' areas, of which Liverpool was one. The city later pulled out of the programme claiming the government spending cuts made it impossible to continue, and condemning the government's lack of support in helping it deliver the Big Society vision. Liverpool was facing cuts of £141m over two years and £100m in area-based grants to the voluntary sector.

The Foundation, however, argues that the government "still has its role to play" in delivering social change and welcomes the government's recently announced £80m Communities First match funding scheme.

The Foundation is Merseyside's philanthropy centre and in 2010/11 delivered over £3m in grants to community groups and voluntary organisations.