Reading tea leaves, #3

Reading tea leaves, #3

News (UK)
Tracking the impact of the recession on giving...

As the economic belt continues to tighten we reflect on the last Reading tea leaves column and past two weeks to find that where philanthropy is concerned there is indeed goodwill and a desire to find innovative ways to meet the current challenges.

Despite various gloomy predictions, individual giving does not yet appear to have fallen into the abyss, as two well-known and well-established organisations announce record-breaking donations by staff to the long-term charities they support.

Staff at Tesco have raised over £6.1m for their Charity of the Year, Marie Curie Cancer Care. This is the result of intensive fundraising in stores, distribution centres and offices across the UK, and breaks all previous fundraising records for a Tesco Charity of the Year partnership, and comes despite the recent economic downturn. This outstanding amount is linked, according to a Tesco spokesperson, to the fact that “working with our local communities is important to our staff and customers”. The donations will be channeled to the regions where the money was raised – “meaning fundraising by Tesco staff will be directly benefiting their own local communities”.

Similarly, though with a global perspective, brokers for Standard Chartered’s Financial Markets worldwide business this week pledged to donate a day’s fees to Seeing is Believing, the Bank’s global initiative aimed at tackling avoidable blindness. Initiated in 2003 and driven by the Bank’s employees, Seeing is Believing helps tackle avoidable blindness, mostly in the developing world.

Supporting evidence for this continuing and personal face of philanthropy is highlighted in the History and Policy paper ‘Economic downturns and the voluntary sector: what can we learn from historical evidence?’ by John Mohan and Karl Wilding.

Digging into historical ground, rather than joining the tide of current speculation, the authors found that, “In the long term the proportion of income given to charity by individuals remains generally constant and this was so even for the Great Depression of 1929-31 in the USA.”

The approach taken by the authors reflects Philanthropy UK’s efforts to read behind the headlines and it is heartening to see solid research emerging. As the authors report: “The evidence cited in the current debate is thin and ahistorical. It is characterised by a lack of hard empirical data (in contrast to discussion about other sectors of the economy) and often measures of perceptions drawn from small-scale surveys.”

Taking the position that “evidence from previous episodes of economic duress, where available, may provide more reliable guidance for policymakers”, the authors seek to make sense of how recession may affect the third sector by looking at new historical research on the finances of the interwar hospitals in Britain along with established research on the American non-profit sector.

Drawing upon both British and North American studies, the authors find that, “Long-run evidence seem(s) to suggest that there is a definite recessionary impact on charities, but although financial donations dip they do recover over time.”

This may not offer much comfort to those philanthropic organisations adding more notches to their budget belts, but the paper does “suggest that the underlying picture is one of long-term stability even if there is short-term turbulence”.

While acknowledging that the recession will have different impacts on different organisations, the report points to evidence that “charities have been creative in terms of developing new sources of income during periods of economic duress”.

This can, again, be seen as an opportunity to think beyond current practices, to innovate and to draw upon personal passions, whether local or global.

The report, ‘Economic downturns and the voluntary sector: what can we learn from historical evidence?’, is available on the History & Policy website.

  • Philanthropy stats & trends
  • UK