top of page

Corporate donations down despite wages rising

downward trend in donations

Most charities incorporate a range of fundraising efforts. From online/offline events to applying to grant-making organisations; from legacy funding to corporate giving…and more.

The country’s top earners regularly give some of their earnings to charity for a variety of reasons—genuine philanthropy, good PR, to qualify for tax breaks, to set an example to others.

However, a probe on recent tax returns submitted by the UK’s highest earners has shown that corporate giving has reduced by a fifth over the last seven years, even though these people’s wages rose by 10% during the same period.

The ‘generosity gap’, as it’s being called, is widening.

Donations from those who earn below £175,00 per annum, have increased over recent years, but we’re giving to good causes from much smaller income pots. This has seen the overall amount donated to UK charities fall; the Charities Aid Foundation believes this year’s total will be the lowest for five years.

Gus O’Donnell, a former cabinet secretary and the person who instigated the research says this to the country’s top 1% of earners, ‘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. 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.’

If we look at the average gift against income, the top 1% of earners donate 0.2% of their annual income to charity, whereas those on average incomes donate 0.8% of their wages. Quite a gap.

Alisher Usmanov
Alisher Usmanov

Of course, there are some high earners who give huge amounts to charity. For example, the country’s most generous donor, Alisher Usmanov, a mining and metals magnate, decided to up his philanthropy over the last year; his charitable donations have jumped from £137m to £507m.

Charitable donations aside, the rich/poor gap is widening exponentially. During lockdowns, with few outlets open to take our disposable income, individuals’ wealth increased, on average. However, those who were already struggling to make ends meet to afford life’s basics of food and heat saw no let-up. Economist Jack Leslie stated that this was a rare occurrence, as average wealth typically decreases during recessions; he believes that the pandemic has ‘turbo charged’ the rich/poor gap.

Some people have likened these top-earners to Ebeneezer Scrooge, given the time of year. One member of the public, Richard Howley, who has a longstanding association with the Prince’s Trust, said this, ‘The average income of the top 1% increased from £247,000 in 2011 to £271,000 in 2019 but their donations to charity decreased from £680 to £538 on average. Even this covered huge disparities. 0.5% of the those in the Top Income band donate around two thirds of all the funds given by this group. Most top earners give even less—around 0.2% of their earnings. £538 on an income of £271,000? How stingy can you get? I’ll be quite open and honest in saying that I personally have given circa 10% of my income to charity over the last 20 years. Indeed, I really think that should be the minimum or at least the norm. Also worth pointing out that, on £271,000, you will inevitably be paying tax at 45%. So, a £100 donation is worth £125 to the charity with Gift Aid, but this will cost you only £68.75 with the associated tax relief.’

Donating £538 when on an annual income of £271,000 does make this gift sound like a drop in the ocean when you think of the support these top earners could afford to give to people in need. However, at the same time, it’s a dangerous game to call out them out, as charities would be in a worse position without their donations. The accumulated gifts of the 344,000 highest earners made up just 6% of the year’s charitable donations—this would still represent a hefty sum to raise from elsewhere. I believe that no one should be bullied into giving to charity, but it would make so many people’s lives easier if philanthropy appeared much higher on the list of priorities for the very rich, rather than leaving it to the less well-off to plug the gap.

With all the challenges charities have faced during the pandemic, such as demand for support shooting through the roof whilst they’ve been forced to cancel many of the fundraising events and initiatives they would normally hold, donations through such as corporate giving schemes, legacy gifts and sponsorships are more important than ever before. How lovely it would be if the country’s wealth was shared out a little more evenly instead of being held in assets such as humungous yachts, sprawling mansions and private jets…wouldn’t you agree?


bottom of page