Charity in the age of austerity: what the cash-strapped consumer can do

We hear a lot about austerity and have just suffered another unpleasant budget, but despite the economic realities faced by many hundreds of thousands of people in this country and the seemingly endless State-sponsored snipping of services and salaries, Ireland remains a very good place in which to be born and to live.

Compare it, for example, to Sierra Leone. Pricewatch visited there last year – as part of a delegation from the Department of Foreign Affairs – and saw a country doing its pitiful best to put itself back together after a bloody civil war that had lasted from 1991 to 2002.

The only women’s hospital in the capital, Freetown, teemed with desperately ill mothers and malnourished babies, but there were few drugs to dispense, less medical equipment and only intermittent electricity. People living nearby had no power, and there were entire towns where no one had a flushing toilet or clean drinking water. Life expectancy there is less than 50, and infant mortality rates are over 20 per cent. That is austerity.

Donations falling
Charities such as Gorta, Trócaire, Concern and Médecins Sans Frontières are on the ground there and throughout sub-Saharan Africa doing as much as they can to help former child soldiers, rape victims and others who need their support. But the struggle for them and for all NGOs is getting harder as money gets tighter at home. Charitable donations have fallen in recent years.

A recent survey from the Wheel, a support body for the sector, found that almost two-thirds of Irish NGOs saw their income fall as the recession took hold. A third have had to cut back on their services in the first half of the year, while all the time reporting an increased demand for services.

It is not all bleak: people are still giving. One report, published by Global Humanitarian Assistance, put Ireland in fourth place in the global generosity league, with €500 million being privately donated to Irish charities each year. The State plays its part too, and on behalf of its people provides around 60 per cent of funding or €6 billion each year to the many Irish charities.

Put off by 'chuggers'
A survey published by the Forum on Philanthropy and Fundraising earlier this year found that while Irish people are still willing to consider giving more time or money to charity, many are put off by bank charges, chief executives' salaries and "chuggers", the street collectors whose nickname fuses "charity" and " muggers" (they are described in the report as intrusive and over-the-top).

Transparency is also an issue for potential donors; the survey found that the single biggest thing that would encourage people to give more was a belief that “more money goes directly to the cause”.

Legislation governing this multi-billion euro sector is 40 years old and out-of-date. There are no rules governing the collection of non-cash donations such as direct debits, a loophole that allows on-street “chuggers” and door-to-door solicitation. Legal reforms will come into force next year.

It is in this climate that the One Percent Difference campaign got under way during the summer. It asks people to donate 1 per cent of either their income or their time to a charity of their choosing, and to do so in a more structured way.

While 58 per cent of people in the UK regularly make charitable donations, and just 40 per cent do so in Germany, 89 per cent of Irish adults regularly give to charity. The donations, however, are sporadic and spontaneous, with only 15 per cent of us making donations in a planned, regular way, compared with 36 per cent in Britain.

"Irish people, historically, have been brilliant in a crisis but what we are less good at is giving in a sustained and planned way," says Seamus Mulconry of Philanthropy Ireland, which is running the One Percent Difference campaign. "We are encouraging people to move from a series of single dates to a committed relationship, if you like. If you give regularly, the money builds up and the charity can do more with it."

He says the campaign is “not telling people what to do or where to donate”. He points out that people pick charities for very personal reasons. “We are not just asking people to give money, but also their time; it might be something as simple as volunteering to help at your local sports club. One sporting body alone – the GAA – gets three million hours of donated time each year,” he says.

According to Mulconry, the recession has “seen a reduction in donations but not as much as you might think”. He accepts that chuggers “bug the hell out of people”, but he points out that they are “effective” in getting people to sign up to direct debits.

And he defends the spend on administration and salaries of more than €100,000 for people heading charities. “People have come to regard administration as a negative, but if it leads to effective management then it is worth it. Charities do need to spend a reasonable portion of their income on administration and fund-raising, and that is not a bad thing. And when it comes to salaries, you want to get the best people and to do that you need to pay them the market rate.”

The Clinton factor
On a visit to Ireland earlier this month, Bill Clinton lent his support to the campaign. He pointed out that, since the economic crisis hit, charities all over the developed world had suffered. He suggested that they should look at micropayments to fund projects over the long term.

These payments have held up despite the financial crisis, he pointed out. “When the financial crisis hit, many of us were worried that we would all fall off the philanthropy cliff. In our foundation, a lot of our donors had lost 70-80 per cent of their net worth, and literally could not afford the commitments that they had previously made. We all understood. But interestingly, throughout all that, small contributions tended to hang on and endure,” he said.

The people behind One Percent Difference believe there is an appetite for a "cultural turning point" to restore national pride, self-confidence and sense of community to replace the rampant individualism of the Celtic Tiger era.

“Our research clearly shows a commitment to the principles that in tough times we all need to give a little bit more, and that Ireland’s recovery is everyone’s business,” Seamus Mulconry says. “Despite the recession, our research also indicates that, if properly asked, the Irish people are willing to increase their donations. Our research shows that Irish people respond best when they can see the need, and all of us can now see the need in our communities as never before.

“People who donate to charity and give to others are happier, and there is a whole lot of research to back that up.”