Breadcrumbs

Are small charities at risk from the decline in cash giving?

Third Sector, 27 January 2009

Two experts give their verdicts

YES - Patrick Cox, chief executive, Small Charities Coalition

In my experience, cash donation is seasonal: people give less when they're cold. So we won't really know the full extent of this decline until the summer arrives. At the moment, cash is still the public's preferred way to give.

However, if there is a sustained decline in cash giving, then, yes, small charities are particularly at risk. Cash donations are usually the primary source of fundraising income for small organisations - so if this form of giving is hit, they will be hit hardest. And this will have knock-on effects: it will make it more difficult for them to demonstrate to potential funders that they have existing support.

People who have strong relationships with charities will continue to give; the problem will be how much they give. Good volunteers will be key, with their genuine passion for their causes - and you don't have to pay them, of course.

At the moment, small charities are dependent on certain committed individuals, such as London Underground's Kirk Martin, who has given small charities the chance to raise cash in London tube stations. Without them, we won't survive.

NO - Karl Wilding, head of research, NCVO

The gradual shift from 'spontaneous' cash giving to regular, planned giving reflects changes in the broader economy. As credit and debit cards are used more widely and online shopping grows, donations are evolving in the same way. Like small retailers, small charities will adapt.

It's not just large charities that can use cashless payment methods. Web-based payment systems such as Paypal level the playing field because of their simplicity and low transaction costs, so even charities with the simplest of websites can allow donors to make micro-payments online. This can be arranged at very low cost and will expose them to a wider pool of potential donors.

Cashless payment systems might also increase levels of giving - imagine a world where London commuters can donate with their Oyster cards.

The decline in cash giving has corresponded with an increase in total giving. In a world where we use the web more and more to manage our relationships, the question is not whether small charities will suffer, but whether they will treat this as an opportunity for them to prosper.

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