The role of the voluntary sector in tackling regional inequalities is only hinted at in the Leveling Up White Paper 2022. That’s why our latest report, Donation Nation: the Geography of Charitable Giving in the UK, takes a closer look. It finds two general facts about the fundraising landscape in the UK, which suggests that donations – people donated a total of £12.7 billion in the UK in 2022 – are not supporting the leveling up agenda as much as they could.
Fact 1: More donations could be unleashed in wealthier places
The wealthiest places have the greatest ability to give. And it's true that in higher income places, a higher proportion of the population gives to charity. But these shares are not as high as they could be in these better-off places.
The capital is an example: residents of Birkenhead spend just as much money as Londoners, despite the gap in economic performance. And there seems to be regional inequality. A higher proportion of Southerners exist as they tend to be wealthier. But when you compare like with like, people in the Greater South East are up to 15 per cent less likely to give to charity than the rest of the UK with similar average incomes.
This “unused capacity” in the donor pool goes hand in hand with the “lack of generosity” of donors in wealthier areas. As Figure 1 shows, donors in many wealthy cities give a smaller share of their total spending than less wealthy places. These green dots in the bottom right quadrant (e.g. Brighton, Edinburgh, Reading) have the greatest potential to increase charitable giving: they have a higher proportion of people donating, but compared to poorer cities such as Blackburn , Coventry and Liverpool lack donor generosity .
Figure 1: More donations could be unlocked in wealthy cities in the lower right quadrant
Source: Beauclair 2019
Note: No data for Belfast. Proportion of donated expenses based solely on donors. The Wealth Scale is the inverse of Beauclair's CAMEO Wealth Scale, which is based on transaction data. Cities with high levels of wealth are at 4.5 or higher on the wealth scale, while cities with low levels of wealth are at 3.5 or lower
Fact 2: Donations are limited where the local need is greatest
The greatest shortages are in the north, the West Midlands and Wales. But donations to local causes do not adequately meet the needs in these places. Donors in the Northeast and Northwest prefer to give locally, but economic circumstances limit the overall volume of donations. Meanwhile, Yorkshire, West Midlands and Wales have none of these and have the lowest donations per donor to local causes of any region.
In fact, it is London donors who give the most to local causes in absolute terms, despite facing the lowest levels of deprivation in the country. In addition, charities dedicated to alleviating local poverty are most popular with donors in the capital, far more common than in the most deprived regions.
The same is true when you consider where charities are based. There are more charities per capita in the Greater Southeast than anywhere else in the country. And there are fewer charities specifically focused on local economic needs in lower-income areas.
Why is there a mismatch between nonprofit activity and local needs? Expressed in a simple way, Charitable donations reflect a place's ability to give (Figure 2). The cities with the lowest proportion of people who donate and the least supported by charities are also the least wealthy. Lower incomes mean fewer donations, which means the needs in these areas cannot be met. Charitable activities are instead concentrated in the richest cities with the fewest needs.
Figure 2: Fewer people are donating and there are fewer charities in cities where the need is greatest
Source: Beauclair 2019, NCVO 2023
Note: Cities in England and Wales only. Cities with high levels of wealth are at 4.5 or higher on the wealth scale, while cities with low levels of wealth are at 3.5 or lower
What needs to change
These two facts highlight the discrepancy between the geography of giving and the geography of need. Taken together, they mean that something needs to change if the nonprofit sector is to play a larger role in the leveling agenda. The report makes recommendations to national and local government and national charities to address this issue.
In the long term, the national government needs to get the economy moving again across the country, particularly in UK cities outside the Greater South East. The economy drives the ability to give. A long-term increase in donation rates, especially in places with high needs, also means an increase in disposable income. This is one of the key steps set out in the Cities Outlook 2024, alongside other decentralization and planning reforms.
In the meantime, steps can be taken to improve the level of donations in wealthier places and the flow of funds raised to meet geographic needs.
national government can pursue politics Create incentives for targeted donations from wealthier areas to places that need them most. For example, Onward's recent policy proposal for Charitable Action Zones would require the government to provide matching funding for donations specifically targeted at high-need areas. More broadly, this is what Whitehall should do set a strategy on the role of charitable giving as part of continuing the Level Up Agenda.
The creation of local charitable fundsRedirecting donations to local charities under the umbrella of a larger cause is one option for this Local government. These could help direct local donations to local needs in more deprived areas and build capacity for local charities. There is a precedent for this: the Greater Manchester Mayor's Fund already helps homeless people in the city region. But what works in Manchester may not apply to Leeds or Cardiff. Local authorities must do this tailored approaches based on existing differences in local giving preferences.
Finally, 'Expand charitable partnerships should be carried out by major national charities. These programs would partner with local charities that have similar causes in high-need areas, better target donations, and overcome local economic constraints. Additionally, national charities should do this Open the “Black Box” about where their donations are being spent across the UK. Greater transparency and data sharing are needed to close this gap in evidence about how charitable giving supports social advancement.
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