Charities (Donations)

Debate between Chris White and John Robertson

Tuesday 8th January 2013 Westminster Hall

[John Robertson (Glasgow North West) (Lab)]

It is a pleasure, Mr Weir, to serve under your chairmanship in this important debate. Towards the end of last year, charity donations had dropped by 20%, and one in six charities said that they face closure in 2013. We rely on charities to support some of the most vulnerable people in our society, and when 73% believe that they are unable to fulfil their philanthropic goals because of lack of funding, there is real cause for concern.

In May 2010, the Government launched their big society idea. The Prime Minister said that it was about allowing charities, social enterprises and companies to provide public services, devolving power to neighbourhoods, and making government more accountable. We are now relying on charities to provide much needed support, but only yesterday Sir Stephen Bubb, head of the Association of Chief Executives of Voluntary Organisations, said:

“The reality many charities now face is crippling spending cuts”.

The Government would like us to rely on charities, but they have neglected to support them in their time of need. What we need now is a Government initiative to support, not one led by charities. In recent years, the public have become increasingly wary of giving to charities following reports of aggressive campaigning. That may be going too far, so we need innovative solutions to access gift aid money, instead of pestering people to give more than they can afford.

Some charities are the only providers for many people, and sometimes they provide niche services to the most vulnerable people in communities. The Marie Collins Foundation provides support for children who have suffered sexual abuse via the internet or mobile technology and has unique expertise in this area. The One in Four charity supports people who were sexually abused as children and is facing an unprecedented amount of work following recent media attention. It relies on donations and volunteers, yet 80% of its clients are referred by the NHS. It is clear that those charities play a role that is genuinely needed in our society.

The problem lies in the reduction of grants and funding available to charities. The SHARE Community says:

“There’s less money available from charitable trusts, and more competition for what there is.”

This debate is not about the fundamental structural changes needed in Government financing to give better support to our charities, although I am sure that an assessment of how that works would be appreciated by many. It is about how to harness the British public’s generosity into a more successful donation record for charities, big and small.

[Chris White (Warwick and Leamington) (Con)]

Will the hon. Gentleman give way?

[John Robertson]

I am sorry, but the hon. Gentleman did not come to me before the debate, so I will not give way.

People want to give, but they simply cannot afford to give as much as they used to. The problem is reaching breaking point. With the recent child benefit reductions and welfare reform at the forefront of hundreds of thousands of people’s minds, charities are being stretched in two directions. For many families, the reduction in income will mean they simply cannot afford to give as much as they used to, leading to reduced budgets for charities. We recently had a debate in the Chamber on food banks, which are classic examples of the strain facing charities during the financial crisis. For example, in the last year, the Trussell Trust almost doubled the number of food banks it oversees from 149 to 293. The BBC recently ran a report about a mother who is a full-time carer to one of her children and is relying on that charity for emergency food parcels. Her words echoed those of many people throughout the country:

“I choose between whether to pay my electricity company...or feed my kids”.

I am sure that the Minister is aware that I often criticise energy companies for their selfishness when raising their prices, and that should be addressed, but we can help to ease the burden in the face of corporate greed by making it easier for charities, such as the Trussell Trust, to secure donations. Similarly, the homelessness charity, Shelter, has seen an 80% increase in demand for homelessness services in the last three years. Additional funding is needed immediately to support its work, and as we enter the coldest part of the year more will be needed.

Elderly people—I have many in my constituency—are also struggling with cuts and rising living costs. In Glasgow, there are now more senior citizens than 16-year-olds. That is a growing trend, and the growing proportion of elderly people will put more strain on our resources. Charities such as the excellent Glasgow Old People’s Welfare Association face rising demands on their resources and rely heavily on increased donations. We must support their work so that they can support elderly people. Demand on such charities will only increase as people start to feel the pinch of years of austerity policies.

Last week, there were reports that a triple dip recession is feared, so 2013 will be a difficult year for many. More and more people will turn to charities for support in their time of need. The Margaret Carey Foundation says:

“Were the charity sector to go into steep decline, the state would have to step in or…just stand by and watch people suffer as a consequence of not having a support system.”

Due to the enormity of Government cuts, I fear it would be the latter. Supporting our charities is an absolute priority, but 20% say they fear they may close this year. We must do something urgently to secure their financing structures.

Unlike many businesses, charities do not have the luxury of reserves to cover income shortfalls, and this year will be a breaking point. The Charities Aid Foundation reports a £300 million deficit in the funds of more than 90% of small and medium-sized charities, and those not facing closure will reduce services.

A key aspect of harnessing donations is to make them more secure and effective, especially with the 20% drop in the last year. It is increasingly difficult to get the other 80%. Cystic Fibrosis Dream Holidays says:

“It is becoming more and more difficult to raise the funds we need. We seem to be doing twice the work to raise half the income!”

The Refugee Youth Project, a charity that provides support to young people who have fled to the UK, relies heavily on donations. Some significant costs on charities are not covered by project budgets, so they desperately need unrestricted funding, primarily from donations, to stay alive. Funding from donations is also used to develop research and to pilot new initiatives with young people, allowing the charity to grow and to increase its effectiveness. Project budgets may be financed by Government grants, but that is no good if the backbone of the charity is not supported by donations.

Many charities also rely on the selling of unwanted goods in shops around the country, but Age UK has noted a 20% drop in doorstep donations of unwanted goods, and I am worried that that will only increase as the world moves to online shopping. Online marketplaces, such as Amazon, make it easier and quicker to sell unwanted items, and that is increasing. The British people are finding that they cannot get such books, CDs and other items in charity shops, and the number of those shops will decline. Comic Relief and Sport Relief are doing an excellent job, but we cannot rely all the time on the money that they are raising. It is easier for them to do so, but the lifeline and money that are needed are not there. The fact that charities now have to consider UK problems as a more pressing priority means that international charities will get less, so there will be a reduction in money to developing countries. Donations from UK residents are dropping, and I suggest that, if that trend continues, donations to charities that distribute in the UK will be given priority by donors. That is shown by the food banks that we discussed earlier.

Some things must be done. I was privileged to chair the Committee that considered the Small Charitable Donations Bill, which aimed to make gift aid simpler. However, in the face of such a crisis, that is simply not enough. Charities employ the most successful fundraisers and they are very good at what they do, but a few steps from Government could make a huge difference to the amount they receive. Over £750 million of gift aid goes unclaimed each year. It is clear that more needs to be done to get that to those who need it most.