Britain’s highest earners have been donating less to charity despite soaring incomes, according to a probe of tax records that found society’s wealthiest are getting richer but meaner.
Charities have missed out on more than £2bn as a result of a widening “generosity gap” as the nation’s top 1% of earners reduced their average declared giving by a fifth in real terms from 2012 to 2019. Over the same period donations from the rest of the population rose.
Approximately 344,000 highest earners who received more than £175,000 before tax accounted for 17% of the UK’s pre-tax income, including capital gains, over that period but made just 6% of all charitable donations.
Charities are facing a fresh fundraising crisis sparked by the new Covid wave after a plunge in donors last year, with 1.6 million fewer people donating as thousands of fundraising events from fun runs to gala dinners were cancelled.
Charities received £4.6bn in donations in the first half of this year, according to the Charities Aid Foundation (CAF). If that rate continues it would mean the lowest annual receipt in five years.
Gus O’Donnell, the former cabinet secretary who led the research by the Law Family Commission on Civil Society, urged the wealthy to “think about what you could be spending your money on this Christmas – if it’s buying a bigger yacht or giving it to people who really need it and via charities that can really make a difference”.
He said: “Those with the deepest pockets can afford to reach a little further. Among the top 1% in Britain, there is a generosity gap between a handful who give very significant amounts and the majority who give substantially less.”
The study found that the UK’s very richest 1,700 people made close to two-thirds of the donations made by the top 1%.
Janet de Botton, an art collector, is among those who have stepped up their donations, giving £54m in 2019 and £68m in 2021, according to the Giving List compiled by the Sunday Times and CAF. Alisher Usmanov, an Uzbek-born metals and mining magnate who has been Britain’s most generous donor of the last two decades, increased his charitable spending from £137m to £507m.
Lord O’Donnell’s research found that the typical income of someone in the top 1% rose 10% between 2012 and 2019, to £271,000, but their typical donation fell by more than a fifth.
The top 1% typically gave 0.2% of their income, while separate figures suggest that typical donations across the whole population in 2019 amounted to about 0.8% of average incomes.
But rather than a simple case of growing miserliness among the rich, experts said charities needed to do more to win back the trust of donors after a series of scandals over the use of funds, including by Oxfam and Kids Company. And O’Donnell called on the government to appoint a senior civil servant to drive donations back up.
“In America they celebrate philanthropy,” he said. “Buildings are named after them and entrepreneurs are proud of what they give. Here we do it anonymously and one of the results is that we don’t, as a society, value [philanthropy] enough.”
If the rich increased their donations to 1% of income, charities could be getting an extra £1.4bn more in annual donations, the commission found.
There are signs the rich may be stepping up donations since the pandemic. CAF, which helps place donations for people giving £25,000 to £100m, said it saw such large donations rise by 26% between 2020 and 2021.
“Covid has highlighted that charities have a huge value to society,” said Edward Garrett, the head of private clients at CAF. “It’s an opportunity and it has generated momentum. It is up to the charities to seize on that and make sure it continues.”
Sam Mercadante, the policy manager at the National Council for Voluntary Organisations, said: “We want to see those with the most dig the deepest and support communities, those accessing charity services and taking action on causes they believe in.”