Is austerity making us less generous?

The amount of money Brits give to charity is falling rapidly according to new research fromvoluntary groups.

A joint report by the Charity Aid Foundation (CAF) and the National Council for Voluntary Organisations (NCVO) claimed donations to charity has fallen by over £2 billion in real terms in the last two years - a reduction of around 20%.

John Low, chief executive of CAF, said that if this trend continues then it could have damaging effects for the most vulnerable in society.

"The drop in giving shown by our survey is deeply worrying for those charities which rely on donations to provide vital front-line services," he said.

"Combined with public spending cuts this represents a potentially severe blow for many charities."

The news will be a blow to David Cameron's 'big society' agenda which hopes to see more charitable organisations filling the void left by a smaller public sector.

The average amount given per month by regular donors fell from £11 to £10, while the largest donations were received by religious organisations.

Peter Lewis, chief executive of the Institute of Fundraising suggested charities will have to look at becoming more efficient if they are to survive the squeeze.

"This report shows how important it is for charities to fund raise effectively to support their vital causes," he said.

"Campaigns like this are important to help raise awareness, and hopefully more money, for causes across the UK.”

The government was forced into an embarrassing U-turn after the Budget earlier this year afterwhich it gave up on plans to limit tax free charitable donations for the well off.