Richard Radcliffe suggests that rather than giving less, the public has replaced giving to large charities with giving to smaller ones.

The fact that two news items hit the headlines on the same day last week seems an interesting coincidence: individual giving is down by £2.3bn (NCVO/CAF) and the Code of Fundraising Practice by the Institute of Fundraising is launched.

As far as individual giving is concerned a drop in giving does not surprise me, but the amount does and I wonder if it is a true picture.

Meeting so many donors virtually every week there are some very clear views from donors as to how they are reviewing/changing/stopping their giving:

They are increasingly losing trust in the largest (however you define this) charities because of their frequency of asking, their methods of asking and perceived wealth. This seems to result in many big charities being taken out of their philanthropic budget and being replaced by small charities.

To give you an idea of donors’ attitudes here are some quotes:

• “I have struck them off" (after a telephone call – a legacy out)
• “When they asked for my bank details that was it! End of conversation.”
• “The worst ones are xxxx – they are all out now (of my will).”
• “I have decided that the call was the straw that broke the camel’s back (cancellation of a direct debit).”
• “I cannot bear any of these calls and there are so many now. It is intrusive and they have no right to ask me about my will either.”
• “I found out it was an agency doing the calls so that was that. Out (a legacy).”
• “I push huge charities aside I am so fed up with them.”
• “I only have small charities in my will – they leave you alone.”

Time and time again donors say they are cutting back on the number of charities they support but not necessarily giving less. With an increasing number of asks, they are turning from casual givers into planned givers of more tangible and local charities.

Their decision making as to which charity to support is driven by trust and confidence in the charity(ies) they support. So, with the launch of the refined code of practice and its theme of “legal, open, honest and respectful” perhaps many charities might heed the warning.

In focus groups I ask why donors/volunteers support the charity or charities they do. The answers are obvious: it is the cause/a personal experience/duty etc.

When we come to the names they trust, the paucity of large charities is truly extraordinary but only a few seem to remain as trusted big charities: The British Red Cross, Unicef and other less obvious ones such as the British Museum and more focused causes such as their college or university.  Smaller charities often mentioned include Breast Cancer Care and virtually every hospice!

When I ask what drives their trust the answers tend to focus on personal experience (directly or within the family) or volunteering “because I witness the charity in action”.
I am obviously really aware that legacy income is horrendously volatile and unpredictable but I find it interesting to see that legacy income for Cancer Research UK in the last two years has fallen by over £20m. So many charity supporters have told me that Cancer Research UK is out of their will “because they are too big and I can’t make a difference” and so they have put a local hospice in their will instead because it is so tangible in the local community and “they will use my money better”.  This is not unique to Cancer Research UK it is a symptom of being big.

If this is a trend which lasts beyond the recession it will be interesting to witness the effect on the sector in terms of lifetime giving and death time giving.

As we grow older our financial circumstances become more fragile. Older people are increasingly worried about their own situation – will they need to pay for care? They are living longer than they expected and running out of funds. Their families are struggling to pay for University and so grandparents are chipping in and reducing their assets. Many older people are keen to distribute their remaining wealth in advance of their death to minimise or get rid of inheritance tax liabilities.

With all this financial uncertainty comes “short termism” (a disease which afflicts many trustees during a recession who decide not to invest in the long term but wanting a quick return now). This donor short termism results in “temporary legacies” put into an informal “letter of wishes” and not in their will. A will is considered to be fulfilling long term wishes and set almost in concrete. A letter of wishes can be changed daily, if wanted, and at no cost so it suits them. But one sign of an aggressive approach or their privacy being intruded and out goes the charity… for them moment.

The sector seriously needs to focus on building trust and confidence if it is to secure its long term future – especially at a time when the long term future of legacy prospects and their families is so uncertain.