20 October 2005
by Susan Wainwright
In these modern times of diversified income, public service delivery contracts, and loan finance and with the sector's income from government reaching an all-time high, it's tempting to question the importance of the humble donation and wonder whether the charity sector really needs them.
But donations from individuals benefit charities in two ways. Most obviously, they are a vital source of income: amounting to £7.1bn in 2003, they represent around a third of the sector's income, and the average monthly donation is now well over £12. But also, in attracting donors, charities are helping to encourage civil engagement and are able to lobby and influence with a stronger voice.
A vital income
The voluntary and community sector is forever being told that it should be diversifying its income. Increasingly, charities are told to move away from grant dependency, become more businesslike, earn their income, develop an asset base and consider loan finance. But donations (including membership fees) represent a valid component of this sustainable funding mix.
And the alternatives to donations from the public are not all feasible. Government funding is one option, but given that the sector already receives 37 per cent of its funding from government, what would it mean for its independence if it were to push for more? Also, it tends to be the larger organizations that deliver specific services that are able to pull in public sector funding. Replacing public donations with this funding simply isn't a feasible option for their smaller cousins. Neither is it an option for those causes which don't feature on the government's list of priorities - the beauty of donations from the public is that they provide support for causes regardless of whether they tie in with the government of the time's policies or vision.
Business giving remains disappointingly low - the private sector only contributes an average of 4.3% to the voluntary sector's income. Much of this is in the form of sponsorship, which largely benefits the medium and large charities, but not their smaller counterparts. And smaller charities that rely on donations would be unlikely to consider investment as an alternative source of income as they may struggle to justify the investment of their limited income when they could be spending the money on core activities.
Getting their voices heard
In addition to providing a vital income stream, donations are an expression of civil engagement. Active citizenship is an issue of no little significance for the voluntary sector. Voluntary action is at the heart of a civil society, and voluntary organizations play an important part in the sustainability of communities.
These organizations give a voice to many of the most marginalized communities in our society, and recruiting donors, supporters and members lends them more weight, particularly in their lobbying or campaigning roles. They can shout louder and with more conviction about a whole range of issues, from breast cancer to church roofs. People choose to support organizations for a wide range of reasons but by making that choice they are actively demonstrating that their chosen cause is important.
Over two-thirds of adults give to charity each month, and charities are working hard to engage the younger generation to ensure that this level of support continues. Individual donations are enormously important as a source of income. They are the lifeblood of many charities, providing support where income from other sources is difficult to come by. They are an indication of the level of trust that the general public has in charities. They represent an interested, engaged and active society, which is willing and able to contribute to the causes it cares about. And this lends weight to the voluntary sector.
Do charities still need donations? Do you even have to ask?
Susan Wainwright is the research officer of the UK-based National Council for Voluntary Organizations.
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