Public donations to charity fell by 20% last year, with good causes receiving £1.7bn less, according to a survey.
The study for the Charities Aid Foundation (CAF) and National Council for Voluntary Organisations (NCVO) found that the amount donated also declined, from £11 to £10 a month.
Both groups warned that charities were facing a "deeply worrying" financial situation, with some being forced to cut back frontline services and make redundancies, or even facing closure because of a fall in income.
They have launched the Back Britain's Charities campaign, which calls on the Government to modernise Gift Aid and ensure public bodies do not disproportionately cut funding to charities when making budget savings.
Data from 3,000 people found that the total given to charity by members of the public in the UK fell from £11bn to £9.3bn in 2011/12.
Taking inflation into account, that reduction is the equivalent of a £2.3bn fall in donations - more than 20% of total donations in the UK by individuals.
The survey found 28.4 million people gave to charity in the same period - 58% of them women.
Medical research, hospitals and hospices, and children and young people were the most popular causes among donors, but religious causes received the largest average donations.
CAF chief executive John Low said: "The drop in giving shown by our survey is deeply worrying for those charities which rely on donations to provide vital frontline services.
"We hope the fall in giving shown in our survey is a temporary decline and not the start of a damaging trend."