01Background and context

The 2022 Levelling Up White Paper identifies ‘social capital’ (alongside physical, human, intangible, financial, and institutional) as requiring investment to tackle regional inequality in the UK. It states that social capital investment requires (amongst other things) local regenerative projects to ‘flow through’ philanthropists and volunteers within the third sector to achieve ‘Pride of Place’.1

But the other five ‘capitals’ tend to be the main focus in levelling up discussions, and interventions in local economies are seen as primarily the responsibility of the public and private sectors as a result. Meanwhile the impact of charitable activity (and social capital) is often neglected. In fact, the role the third sector could play in the UK economic development at a sub-national level is only hinted at in the government’s flagship publication, and remains relatively unexplored.

In 2022, it was estimated that £12.7 billion was donated to charity in the UK.2 This is roughly a fifth of annual local government financing.3 From this perspective, the UK’s charitable activity represents a significant resource for place-based economic development.

Charitable giving has impact in local economies – local organisations can have insight into local needs and priorities and are often able to design appropriate interventions. Charitable giving, as an aspect of civic engagement, is also an indicator of social capital, well established in economic literature as a determinant of local economic growth.4

Therefore the uneven distribution of the geography of giving in the UK should be cause for concern. This fact has been noted across the political spectrum. Both a 2008 Conservative Party policy paper5 and a 2014 report6 by the Centre for Social Justice identified the need for more voluntary organisations in left behind areas. More recently, the Government Civil Society Strategy (2018) emphasised changes to the ‘social sector’ would be key to creating ‘thriving communities [with] sufficient social, financial, natural and physical capital’.7 Labour has also referenced the role of charities in local economic development and broader civil society amid calls for a ‘renewed social contract’.8

This report aims to build on this understanding of the geography of charitable giving in the UK, in order to identify the role of charitable giving in levelling up the country. It answers the following two questions. First, how does charitable giving vary at a sub-national level and relate to local economic performance? And second, how do the causes donated to and the geography of charitable organisations respond to the geography of need?

Box 1: Scope and data

The analysis gives a snapshot of charitable giving in 2019, giving a pre-pandemic view in ‘normal times’ (and using the best available data). 2023 data is used for the geography of charitable organisations.

‘Charitable giving’ rather than ‘philanthropy’ is the focus of the report. The latter, by definition, has a strategic aspect to it, and is less representative of the broad civic and social attributes of local areas. ‘Giving’ in this report refers to monetary donations only, not including giving ‘in kind’ (e.g., food banks) or giving time (e.g., volunteering).

There is an evidence gap when it comes to where charities operating nationally spend their donations regionally – no overarching data exists on these spending patterns. Consequently this report instead focuses on local donations and charities when looking at whether local need is met.

Analysis of charitable giving uses the following data sources:

  1. Understanding Society: a national survey with over 30,000 respondents. This asks whether respondents have donated to charity in the past twelve months, giving results by UK region.
  2. HMRC self assessment tax returns: includes data on the size and incidence of donations for those filing at the level of parliamentary constituency. These are completed by the self-employed and high earners only and so provides a limited picture of general donation habits, but offers a useful low level of geography.9
  3. Beauclair transaction data on direct debit and online donations is available at the level of Primary Urban Area (PUA), allowing analysis at the city level.

The geography of charitable organisations draws on two related (but distinct) datasets:

  1. NCVO Almanac: an annually updated source producing detailed data on the distribution of charitable organisations in the UK.10 This provides data by local authority for 2023 in England and Wales.11
  2. The Charity Commission Register provides much of the data used in the NCVO Almanac. The register itself has postcode-level data with details on charities’ operations and causes.

In addition, Centre for Cities conducted a survey in 2023 on a representative sample of 3,026 British residents to fill information gaps on charitable giving from existing data sources, such as donations to local causes and reasons for donation.12

Footnotes