Charity donations: So much given to so many by so few?

"They will, if enacted, significantly hamper the work of many charities, large and small, as almost half of all giving comes from just 7 per cent of donors."

Dame Stephanie Shirley, Daily Mail, 10 April 2012

With Government proposals to introduce a cap on the amount of tax-free donations an individual can make to charity, many news outlets have felt it necessary to remind the public just how much money donated to charity comes from a relatively small amount of donors.

The Mail, the Sun, the BBC and the Telegraph all claimed that, in the last year, just 7 per cent of donors contributed to nearly half of all charitable donations.

In addition the Sun and Daily Mail claimed that, in the last year, the top 100 donors contributed £1.67 billion to charity.

Analysis

The claim that 7 per cent of donors contributed to nearly half of all charitable contributions seems to be based on a report entitled 'UK Giving 2011' which was produced by the Charities Aid Foundation (CAF) and the National Council for Voluntary Organisations (NCVO). It says:

"Although the proportion of donors giving more than £100 is small (7% in 2010/11), their donations account for a relatively large share of the total amount donated. In 2010/11 the donations from those giving more than £100 in a month accounted for 45% of the total amount donated. 

This does not take account of donations from very wealthy philanthropists. It is estimated that in a typical year there are around 100 donations worth £1m or more made by individual donors, either directly or via their personal trusts and foundations."

One of the first things to point out is that this report relates to individual donations, not all charitable donations. This fact was mentioned in the BBC report but not in the Sun, Mail or Telegraph. This is an important distinction because charities receive large amounts of money from government contracts and corporate donations.

The report is based on information obtained by the Office of National Statistics in its Omnibus Survey carried out three times a year. It involved random sampling that was adjusted to take into account, amongst other things, age, socio-economic status and region.

According to the report, in 2010/11 the total amount of money given to charities by adults in Britain was £11 billion. This figure was arrived at by multiplying the average (mean) amount of money given by someone each year to charity, £372, by the proportion of UK adults who donate to charity, which is 58 per cent or 29.5 million.

The Sun was accurate in identifying this as the total amount donated to charity each year as it is based on this report.

The report also broke down those who gave money into four categories: those who gave under £10 a month, those who gave £10-£24.99, those who gave £25-£99.99 and those who gave £100 and over. Only 7 per cent of those sampled gave more than £100 a month.

This supports the claims made in the Mail, the Telegraph and the BBC that the 7 per cent of donors gave nearly half of donations to charity, provided this is understood as referring to individual and not all charitable donations.

The Sun claimed that these 7 per cent were the "richest" seven per cent of people in the country. However the report does not comment on the relative wealth of this seven per cent, only that they donated the most to charity.

There are also issues with the report in terms of assessing how much money is given to charity by those who donate the most. This problem is to do with sampling, a problem that the report acknowledges itself:

"There are so few major philanthropists that sample surveys of the whole population will almost never include them"

To calculate the amount of money given to charity by major philanthropists we can use another study, the Coutts Million Pound Donors report. Their 2011 report said that, in 2009/10, 174 charitable donations were made of over £1 million totalling £1.312 billion.

Both the Sun and Daily Mail also claimed that last year the top 100 donors donated £1.67 billion to charity. This figure seems to have been taken from the 2011 Times Rich List and more precisely the Giving List. The Giving List is sponsored by the Charities Aid Foundation and ranks the wealthiest in the country according to how much they give to charity.

It is based on a questionnaire sent to the wealthiest 1000 people in the country and ranks them by the proportion of their wealth that they give to charity. This is termed the 'Giving Index'. This means someone can appear higher on the list even if they donated less money.

For example, at number 32 Eric Clapton recently donated £3.9 million out of his total wealth of his 125 million while Alan Parker is at number 33 for donating £68.8 million out of his £2,290 million. Despite giving less Eric Clapton scored 3.08 on the giving index while Alan Parker scored 3.

Based on this method of working out who gives the most to charity then it is entirely possible that someone who much less wealthy is actually the top philanthropist in the country, but the survey was only sent to the 1000 most wealthy people in Britain.

Based on the times giving list the Sun and Daily Mail were accurate when hey said that the top 100 donors gave £1.67 billion to charity last year.

The Sun also linked this figure to the total amount of money donated to charity last year mentioned in the Giving Report - £11 billion. However the Sun links these figures despite the fact that they come from different reports which use two different methods of calculating how much people donate.

The figure of £1.67 is calculated based on how much the 1000 wealthiest people give to charity as a proportion of their wealth while the £11 billion is based on how much people give based on sampling - sampling which does not include a small number of large donations from philanthropists.

Conclusion

All three reports use different definitions of top charitable donors and this should be remembered when comparing their figures. What they all show is that a relatively small number of donors contribute a significant amount of money to charity each year.

Based on the CAF/NCVO report the Daily Mail, the Telegraph and the BBC were all accurate when they said that 7 per cent of donors make up nearly half of donations and the Daily Mail was accurate in asserting that the top 100 donors gave £1.67 billion last year based on the Times Rich List.

However the Sun conflate these seven per cent with the richest seven per cent of people in the country, which are not the same thing. They also compare the Rich List figures with those from the UK Giving report sample which are not necessarily compatable.