A number of recently released reports look at the topic of charitable giving from different angles: trust, payments, donor sentiment, disintermediation. Together, though, they tell a remarkably consistent story about the challenges that charities are facing, as well as some potential opportunities.
The reports reveal that charities are operating in a tougher fundraising environment, shaped by fewer donors, sustained cost-of-living pressure, rising expectations around impact and transparency, changing payment habits, and growing competition from new, informal ways of helping.
Here are seven key takeaways for charities...
- Fewer donors, but bigger donations?
The headline figures from CAF's UK Giving Report 2026 make sober reading. The British public gave £14 billion in 2025, down from £15.4 billion in 2024, which is the first fall in total giving since 2021. More strikingly, there are six million fewer donors than there were a decade ago: an estimated 37 million adults gave or sponsored someone in 2016, compared with around 31 million in 2025. CAF calculates that if giving had simply kept pace with 2016 participation rates, charities would have received £12.4 billion more over the period, which is roughly a full year's worth of donations for the sector as a whole.
One piece of good news is that overall giving has broadly kept up with inflation, because the donors who remain are giving more. However, the structural issue is that the sector is now leaning increasingly on a smaller core of committed supporters, while the long-term pipeline of new givers looks thinner. Retention of donors is therefore doing more of the heavy lifting than acquisition, which makes it a strategic risk if that core group shrinks or gives less.
Putting this into practice
- Model income scenarios that assume a shrinking or flat donor base, not just steady historic growth, when building budgets and forecasts.
- Stress-test reserves policies against the risk of losing a small number of high-value regular donors, given how concentrated income now is.
- Flag over-reliance on a narrowing donor base as a financial sustainability risk in trustee and audit committee reporting.
- Trust remains high, but it can't be taken for granted
Both the Charity Commission and CAF find that public trust in charities has held up well. The Commission's 2026 report puts high trust at 57%, broadly stable since 2020, with charities still outperforming almost all other institutions. CAF finds three-quarters of people consider charities at least "somewhat trustworthy." Trust and giving reinforce each other, as people who trust charities are far more likely to donate, and to give more when they do.
The Commission notes, however, a rise in those reporting low trust, from 9% in 2024 to 11% in 2026, concentrated among people with less contact with charities and lower awareness of the regulator. This reinforces the link between visibility, understanding and trust.
Just as significant is a change in what trust is actually based on. Money reaching the cause is still the single biggest driver of confidence, but the Commission notes that perceptions of charities "making a real difference" and acting as a voice have grown in importance, reflecting a shift from a narrow focus on financial efficiency towards a broader expectation of purpose and outcomes.
A related finding is that the Commission notes that the public's tolerance for overheads is “real, but conditional”. High CEO pay in particular is cited less as a cost concern and more as a symbol of misalignment with charitable values.
Putting this into practice
- Get ahead of the new Charities SORP with a stronger emphasis on impact reporting. Telling your story is vital – if you don’t, someone else might do it for you.
- Ensure cost allocation between overheads, fundraising and programme spend is clearly presented and easy to explain to non-finance trustees, and the public.
- Cost-of-living pressure is reshaping (not just reducing) giving
CAF finds that one in five people say they simply cannot afford to give, and this is the single biggest reason for reduced donations, cutting across demographics. The Charity Commission's research reaches a similar conclusion from a different direction: it's the "medium-trust" group (people who broadly support charities but aren't deeply engaged) who are most likely to disengage under financial pressure. Meanwhile, high-trust supporters tend to find other ways to stay involved even when they can't donate.
For a large share of lapsed and reduced donors, it looks more like an affordability problem layered on top of continued goodwill.
Putting this into practice
- Consider how continued cost-of-living pressures could affect future income and ensure this is reflected in budgets, cashflow forecasts and board discussions.
- Review whether your mix of fundraising products and giving opportunities reflects changing donor preferences, and assess the financial and operational implications of any new offerings.
- Review whether your reserves policy would provide sufficient protection if a small number of significant donors reduced or stopped their giving.
- Donors increasingly expect convenience and flexibility
Lloyds Bank's "Paying it forward" report tracks how donors are actually paying, and the picture is one of gradual, uneven digital shift rather than wholesale change. Direct debit remains the single most popular giving method, worth around £2.89 billion in 2025, prized for its predictability and low processing cost.
Contactless giving is growing fast, underpinned by near-universal comfort with contactless payments generally, and more than half of UK adults now use mobile wallets regularly. Open Banking-enabled payments and Variable Recurring Payments (VRPs), which let donors authorise flexible rather than fixed automatic amounts, are still niche but expanding quickly: VRP volumes nearly doubled in 2025.
Cash, meanwhile, is declining as a share of donations but is far from disappearing, and Lloyds is clear that this a matter of inclusion rather than nostalgia. Cash remains important for financially vulnerable and digitally excluded donors, and for impulse giving at events and on the street.
CAF's data adds a note of caution to the automation story: while more than £4 billion in donations now comes through direct debits, standing orders and subscriptions, 2.8 million people cancelled a regular charity payment in 2025. Regular giving is valuable, but it isn't immune to financial pressure or donor fatigue.
Putting this into practice
- Track the cost-per-transaction implications of shifting donor preferences (direct debit vs contactless vs card) when assessing payment processing budgets and supplier contracts.
- Assess the financial case for early investment in Open Banking/VRP infrastructure, including any set-up costs, against the near-zero transaction fees on offer.
- Factor the cancellation rate on regular giving (2.8 million donors in 2025) into income forecasting and reforecast triggers, rather than treating direct debit income as fixed.
- Overseas causes face a particular challenge
This is a lesson with direct relevance for CFG's Overseas Special Interest Group (OSSIG) members and any charity operating internationally. Enthuse's Donor Pulse Report finds that, despite a year marked by conflict and disaster, only 6% of people had given to an overseas aid charity in the past three months, down from 10% in 2023. CAF's longer-term data shows the same trend: the share of donors supporting overseas aid has fallen from 19% in 2016 to 11% in 2025, and donations have dropped from an estimated £970 million to £727 million over that period.
Enthuse finds strong underlying sympathy however, with six in ten people who do give to overseas causes citing concern about suffering caused by war or political situations, and a further quarter saying the need for support has never been greater. But that sympathy sits alongside caution, as 41% of the public say they feel wary about giving to overseas causes at all.
International charities are contending with cuts to foreign aid budgets from both UK and US governments, alongside operational and banking access challenges in some of the world's toughest environments, even as public attention for causes that feel geographically distant becomes harder to sustain.
Putting this into practice
- Build additional caution into income forecasts for overseas/international programme funding, given the compounding pressures on this income stream.
- Review the financial and banking risks of operating in higher-risk overseas jurisdictions as part of risk registers and going concern assessments.
- Ensure impact and financial reporting for overseas work is robust enough to support the transparency donors are increasingly asking for.
- Charities are no longer the only route people use to help
A white paper from fundraising think tank Rogare and Kingston University Business School, explores what it calls "disintermediation": people cutting out the charity as intermediary and giving, or helping, directly. Examples range from members of the public booking Airbnb rooms in Ukraine purely so the booking fee reached the owner, to YouTuber MrBeast's model of direct giving, to what the report terms "citizen fundraising". This involves individuals raising money independently of any charity structure.
The report's authors are careful not to frame this as simply negative, but they do call it a potentially serious long-term issue for the sector, and goes as far to note that this could be an ‘existential threat’. If people can help directly, charities therefore need to be able to explain clearly what a trusted intermediary actually adds (safeguarding, accountability, expertise and scale) that individual, informal giving typically cannot replicate.
Putting this into practice
- Consider the income risk of donors bypassing the organisation for direct or informal giving when modelling future fundraising income.
- Ensure the financial case for giving to your charity (safeguarding, governance, audited use of funds) is part of how finance communicates value, not just a fundraising narrative.
- There's still significant untapped value in Gift Aid
Amid all the structural challenges, Gift Aid stands out as an opportunity that's already within charities' reach. It generated £1.88 billion for the sector in 2025, but a further £560 million goes unclaimed every year. Awareness is high (89% of donors have heard of it), but only around half use it on every donation, and this is lowest among 16–34 year olds. There's a further gap for higher and additional rate taxpayers, many of whom don't realise they can claim personal tax relief on top of the charity's claim; CAF finds 46% aren't aware they can do this at all.
The advice on closing the gap is to keep Gift Aid messaging simple, friendly and impact-focused (reminding donors it adds 25% at no extra cost to them), address common worries about complexity or accidentally owing money, and build the prompt into every giving moment. Highlighting Gift Aid on donation pages, thank-you emails and in-person conversations, rather than treating it as small print, is vital. CFG’s Gift Aid Awareness Day, now just weeks away on Thursday 1 October, also represents a perfect opportunity to promote the importance of donors ‘ticking the box’.
Putting this into practice
- Review internal processes and systems for capturing Gift Aid declarations to reduce the administrative barriers that suppress claims.
- Brief major/higher-rate donors' relationship holders on the personal tax relief donors may be missing, since this can also support future giving capacity.
Bringing it together
The thread that runs through all of this research is not that donors have stopped caring. Instead, they're simply becoming more selective, more financially constrained, and more selective about how, where and why they give. Charities that can therefore demonstrate real impact, hold onto and reinforce trust, adapt to how people actually want to give and pay, and make a clear case for what they add that individual, informal giving cannot, will be able to more easily navigate a genuinely tougher fundraising environment.
Read the full reports
Charities Aid Foundation, UK Giving Report 2026
Charity Commission, Public trust in charities
Lloyds Bank, 'Paying it forward: How is charitable spending evolving among the UK public'
Enthuse, Donor Pulse Report 2026
Rogare and Kingston University Business School, ''Disintermediated' giving, asking and helping'