Charity donations direct from salary 'fall sharply'

Charities have suffered a steep fall in the amount of money people donate to them directly from their salaries during the past two years, research indicated today.

The proportion of people donating to charity through a payroll giving scheme, which enables people to donate money to good causes tax-free, has remained broadly stable since 2008, dropping only slightly from 4.3% of workers to 3.8%, according to payroll services firm Equiniti ICS.

But there has been a big drop in the amount people donate during the same period, with the average monthly donation falling from £19 to £14, a deduction of £60 a year.

The group said that while the average drop in the amount donated was around 25%, some charities reported seeing a 50% decline, as people tightened their belts during the economic downturn.

It said in 2007/2008 a total of £109 million was given to charities through payroll giving schemes, suggesting that the recent drop in donations has cost charities around £27 million.

Alan Foley, director of Equiniti ICS, said: "Payroll giving is a great way to donate to charities as it is particularly effective in terms of tax and provides a secure and dependable income stream for the charities.

"However, as with much other discretionary expenditure, it has suffered from the ill effects of the recession, and some charities will inevitably be suffering financially as a result.

"What is significant, and bodes well for the future, is that employees are not deserting their charities altogether and stopping donations completely; instead they are choosing to cut back, which is much more positive in the long term."

:: The research was based on a sample of the 125,000 employees whose payrolls are managed by Equiniti.