Page last updated at 00:53 GMT, Tuesday, 28 July 2009 01:53 UK

Hit or miss for charities in recession?

By Kevin Peachey
Personal finance reporter, BBC News

Charity collection
Traditional forms of collection have fallen down the agenda

On a cold December day, volunteers were sent out into the streets of Bury St Edmunds with their collection tins and encouraged to do their best.

The UK was on the cusp of recession. With families watching their pennies, they were expecting to find it relatively tough to raise money for the local St Nicholas Hospice.

But the annual "flag day" raised a record £1,200 - more than expected - as generous shoppers popped their loose change and more in the buckets.

"The only area of fundraising that has not been hit is the community side," said Yasmin Jeffery, marketing manager for the hospice.

She says many locals know someone who has been cared for in the hospice, which was established 25 years ago, so they still gave generously - whatever the state of the economy.


The latest figures from the UK Cards Association suggests the public's appetite for giving to charities has not diminished during the downturn.

Some charities still face that double whammy of a drop in income as well as an increased demand for services
Dame Suzi Leather, Charity Commission

The trade association for the cards industry said that in the first four months of 2009, the value of donations on debit cards was up 24% on the same period the previous year. Credit card donations were up 11% over the same timescale.

This followed an 18% rise in donations on plastic cards in 2008 - up from £1.01bn in 2007 to £1.19bn in 2008.

"These card figures tell us an interesting story. Despite the economic downturn, it seems there was no let-up last year in people's commitment to charity," says Sandra Quinn, of the UK Cards Association.

"Over the last few years we have seen more charities offer donors additional ways to pay, particularly with cards, and particularly online - all of which makes donating extremely easy, and unquestionably plays a part in the increase in charity spending on plastic cards."

Bigger picture

The Charity Commission keeps updated data on the financial position of registered charities in England and Wales.

Charity wristbands
Charities have expressed their concerns about the downturn

Its figures show the annual income of the 166,807 main charities reached £51.16bn by the end of June 2009. This was up from £48.4bn at the end of 2008 when there were more charities - 168,354.

With the figures having risen steadily over the previous years, the position still looks rosy for charities.

But these statistics do not tell the full story.

Various aspects of charitable giving have been hit in recent months. With the value of homes and shares having fallen sharply, the amount received in wills has been cut.

A recent report by a think tank, the Smith Institute, concluded that there might be a loss in the value of legacies of between £150m and £200m in 2009.

Low interest rates have also meant that charities' own savings and investments had not performed as well as they might have expected. Some were caught up in the saga with the Icelandic banks.

An economic survey of 1,000 charities in England and Wales in February discovered that 52% of those asked said they had been affected by the financial downturn. Some 58% suggested that they suffered a drop in income.

"Clearly the impact of the financial downturn on charities is widening and deepening. Some charities still face that double whammy of a drop in income as well as an increased demand for services," says Dame Suzi Leather, who chairs the Charity Commission.

During a downturn many charities, ranging from those supporting people with mental health issues to those with housing needs or helping people who are victims of domestic violence, see the need for their work become more acute.

With these charity staff working harder, it seems the volunteers who raise the cash and those making donations will have to dig deeper too.

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