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One-off donations drop due to cost-of-living crisis, research suggests

28 Oct 2022 News

Almost one in 10 people are holding back from one-off donations, due to increasing living costs, new research suggests.

Charities Aid Foundation’s (CAF) UK Giving research suggests the strain on household budgets continues to affect charity donations, with 9% of people choosing not to make a one-off donation last month as a direct response to the rising cost of living. 

The total sample size was 1,023 people, and finds 6% also said they reduced or stopped a regular payment to charity because of increasing living costs. 

Nearly one in five, 19%, are considering cutting back on their donations, compared to 14% six months previously. In August, this number rose to 22% as household concerns around energy bills peaked. 

In September, 26% of people said they had donated in the previous month. Prior to the pandemic, around 30% usually said they gave to charity in September. 

The average monthly donation also declined in September, with a mean donation of £51, compared to £67 in August.
  
This comes as inflation is also eroding the value of charity donations. Indeed, recent analysis by CAF and Pro Bono Economics estimated that a charity donation of £20 started in 2017 will be worth just £14.90 by 2024.

CAF: ‘Simplify Gift Aid process’

Neil Heslop, chief executive of CAF, said as people cut back, government and private sector funding which supported charities through the pandemic “is greatly needed”, as “charities are having to do much more, with much less money.”

“With more than £500m of Gift Aid unclaimed which should rightly be with charities delivering frontline services, the process needs to be simplified to deliver desperately needed funds,” he said.

“The government also needs to address the current complexity of the VAT system since it’s estimated that the sector loses billions paying tax that they cannot recover later.”

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