Social trends and
household giving to charity
Cathy Pharoah and Tom McKenzie
“Institutions of giving” research
What are the determinants of giving?
 Previous studies have established important links between socio-
economic characteristics and the act of donating to charity
 Clear links between income and propensity to give
 Less clear correlation between income and relative generosity
 Research in other fields such as social psychology has shown
values, attitudes and other pro-social behaviour to be factors too.
 Challenge
g to bring
g multiple
p p
perspectives
p
together
g
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010
What are the determinants of giving?
Living Costs and Food Survey (LCF) as valuable and under-used
data source on household giving
Precedents:
•
Jones and Posnett (1991)
•
Banks and Tanner (1997, 1999)
•
Extensive literature in the US looking at giving by income and wealth, age,
gender, ethnicity, …
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010
Aims of the current programme
To reassess giving for the period 2001-2009, looking at:

age

income and socio-economic group

seasonall variation
i ti and
d ttrends
d over titime
To enrich the Banks & Tanner model, specifically looking more at:

measures and determinants of “generosity”

household type (reflecting social change since the 1990s)

sub-regional patterns and ethnic background
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010
Methodological challenges
 Data at household level; decision to donate may be agreed by the
household or made by individuals within the household
 Pooled cross-section (survey available in yearly cross-sections)
 Changeover from financial to calendar year in 2006
 Issues of confidentiality
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010
Key figures
 2001-2008 dataset contains observations from 52,000 households
 15,750 of these households donated to charity (30%)
 The average amount donated was £7.94* per week (£5.67 in 1993)
 The median donation was £2.73 per week (£1.70 in 1993)
 The average
g amount g
given by
y a donor household rose by
y 54% in
real terms from £6.06 per week in 2001 to £9.34 per week in 2008
(peak of £9.50 in 2007)
*Figures on this slide have been converted to May 2010 £
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010
40
0
30
20
10
0
ent of househ
holds donatiing
perce
50
Higher income = more likely to give
1
2
3
4
5
6
7
8
9
10
income decile
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
Generosity and income
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010
Is “generosity” linked to income?
 The direct relationship between income and relative amounts given
is negative – people on higher incomes appear less generous
 This relationship holds across time and region
 But when controlling for other factors, the pattern changes:
 much of the income-generosity pattern can be explained by age (older
households have lower incomes and are more generous)
 much of it can be explained by the numbers of adults living in the
household (extra adults in the same household mean higher income
but larger households are less likely to donate)
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010
Generosity and income: the direct link
.5
1
1.5
2
2.5
3
donors only
0
don
nations as a percentage
e of total spe
ending
no controls
0
20
40
60
80
100
income percentile
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
Same pattern across space and time!
.5
1
1.5
2
2.5
3
donors only
0
don
nations as a percentage
e of total spe
ending
controls for region, quarter and year
0
20
40
60
80
100
income percentile
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
Generosity/income: a question of age?
.5
1
1.5
2
2.5
3
donors only
0
don
nations as a percentage
e of total spe
ending
controls for age, region, quarter and year
0
20
40
60
80
100
income percentile
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
Ethnicity makes little difference…
.5
1
1.5
2
2.5
3
donors only
0
don
nations as a percentage
e of total spe
ending
controls for ethnicity, age, region, quarter and year
0
20
40
60
80
100
income percentile
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
Size (number of adults) does matter!
.5
1
1.5
2
2.5
3
donors only
0
don
nations as a percentage
e of total spe
ending
controls: #adults, ethnicity, age, region, quarter and year
0
20
40
60
80
100
income percentile
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
Other characteristics less important…
.5
1
1.5
2
2.5
3
donors only
0
don
nations as a percentage
e of total spe
ending
full model
0
20
40
60
80
100
income percentile
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
In summary:
full model
donors only
donors only
2.5
2
1.5
1
0
.5
donations ass a percentage of total spending
2.5
2
1.5
1
.5
0
donations ass a percentage of total spending
3
3
no controls
0
20
40
60
income percentile
80
100
0
20
40
60
80
100
income percentile
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
Household structure and giving
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010
Household structure and giving
 The type of household (married couples, families, single-person
households) plays a role in its propensity to give
 Relative numbers of the different household types in the population
are changing
h
i over titime
 How is this affecting the overall level of giving in the population?
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010
5 10 15 20 25 30 35
5 40
0
holds dona
ating
percent of househ
Donating in England, by household type
2001
2002
2003
2004
2005
2006
2007
2008
year
one person
married couple
other multi-person
lone parent
cohabiting couple
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
Household estimates and projections by household type, England, 1971-2031
Source: ONS population projections, table 402.
Number of household
ds (Thousands)
30,000
25,000
20,000
one person
other multi-person
m lti person
15,000
lone parent
cohabiting couple
married couple
10 000
10,000
5,000
2031
2026
2021
2016
2011
2006
2001
1996
1991
1986
1981
1976
1971
0
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010
30
25
2
20
15
10
5
0
useholds d
donating
perccent of hou
35
Projected donating in England, 1971-2031
1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031
year
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
31
29
27
2
25
perccent of hou
useholds d
donating
33
Projected donating in England, 1971-2031
1971 1976 1981 1986 1991 1996 2001 2006 2011 2016 2021 2026 2031
year
The determinants of giving •
Cathy Pharoah • Tom
McKenzie
24 March
201018/06/2010
Social trends and household giving to charity • © Pharoah & McKenzie, Cass
Business •School
& CGAP,
References
Banks, James and Tanner, Sarah (1997): The State of Donation: Household Gifts to Charity, 1974-96. Institute for Fiscal Studies,
London.
Banks James and Tanner,
Banks,
Tanner Sarah (1999): Patterns in Household Giving: Evidence From U
U.K.
K Data
Data. Voluntas 10 (2)
(2), pp
pp. 167
167-178.
178
Brown, Eleanor and Ferris, James (2007): Social Capital and Philanthropy: An Analysis of the Impact of Social Capital on Individual
Giving and Volunteering. Nonprofit and Voluntary Sector Quarterly 36 (1), pp. 85-99.
Havens,, John,, Schervish,, Paul and O’Herlihy,
y, Maryy (2006):
(
) Charitable Giving:
g How Much,, byy Whom,, to What,, and How? In: W. Powell
nd
and R. Steinberg (eds.): The Non-Profit Sector: A Research Handbook, 2 edition, Yale University Press.
Jones, Andrew and Posnett, John (1991): Charitable donations by UK households: evidence from the Family Expenditure Survey.
Applied Economics, 23, pp. 343-351.
Lee, Norman, Halfpenny, Peter, Jones, Andrew and Elliot, Heather (1995): Data sources and estimates of charitable giving in Britain.
Voluntas 6 (1), pp. 39-66.
Schervish, Paul and Havens, John (1995): Do the Poor Pay More: Is the U-Shaped Curve Correct? Nonprofit and Voluntary Sector
Quarterly 24 (1), pp. 79-90.
Schervish, Paul and Havens, John (1997): Social Participation and Charitable Giving: A Multivariate Analysis. Voluntas 8 (3), pp. 235260.
Social trends and household giving to charity • © Pharoah & McKenzie, Cass Business School & CGAP, 18/06/2010