janek positioned to left 270X270

Susan Pinkney

E: research@cafonline.org


Funding for charities - is it enough?

15 April 2020 

In the week since I last wrote an update, the UK’s Chancellor of the Exchequer has announced a £750 million package of support for charities - a welcome first step. As a trustee of a local hospice, I particularly welcomed the dedicated £200 million for this important cause area.

On 7-8 April, on the eve of Chancellor Rishi Sunak’s announcement, we asked 503 charities whether they thought they would have to close their doors entirely as a result of the pandemic. A significant number of 14% said they could survive less than 6 months and 29% said they had up to a year. If these figures prove true, the result will be a very large overall number when you bear in mind that there are over 160,000 registered charities in England and Wales alone. We will continue to monitor the attitudes of charities to see if the new funding package, along with other initiatives and funds start to change their outlook.

Also announced last week was the BBC Big Night In appeal on 23 April, for which the Chancellor subsequently announced that the government would match funding. This is a great inititaive and hopefully will encourage those of us who can give during these times, to give a bit more. We have seen the generosity of the UK public as we have rallied throughout this crisis, personified for so many of us in the £7 million (and counting) raised so far after veteran Captain Tom Moore decided to do what he could to fundraise for NHS Together charities.

One question that often comes up around appeals, whether telethons, disaster appeals or other one-off fundraising activities is whether they stop people from giving to other charities – in other words, does giving to appeals cannibalise giving to other good causes? Is money going to COVID-19 related causes draining donations that would have gone to other good causes?

In 2016, CAF was fortunate to work with two Economics Professors, Sarah Smith (University of Bristol) and Kimberley Scharf (Birmingham University) to address this question by examining CAF data. Their unique research produced four key findings:

1. Appeals encourage giving

Large disaster appeals encourage people to be more charitable - the act of donating appears to motivate donors to give to other causes. This is true of annual telethons such as Children in Need and Comic Relief. Disaster appeals do not adversely impact other planned fundraising activity and, instead, appear to stimulate a culture of giving.  

2. Donations are not cannibalised

Donations spike during an appeal, but this does not reduce giving to other charities. In fact, there is a simultaneous increase in donations to non-disaster related charities during a large disaster appeal, followed by an eventual return to normal levels of giving.

3. Reduced ‘hassle costs’

It would appear that donors tend to be more receptive to donating to other charities during disaster relief appeals. This could be due to the donor being already primed to give and finding it easier to give to more than one charity at the same time.

4. Giving is emotive

Effective disaster response campaigns can influence an individual’s need to help other causes as it makes the concept of giving more salient.

As we find ourselves in the middle of an unprecedented crisis, with charities of all shapes, sizes and cause areas struggling to maintain their services and help the most vulnerable, this research provides glimmers of hope that far from reducing  donations to other charities, big appeals that get us through moments of disaster can actually inspire people to be more generous.

CTA Banner books

Want to know more?

Contact the Research and Insight Team

Our research and insight programme is focused on investigating and increasing understanding of charitable giving and philanthropy.

Get in touch today