Giving to charity fell by 20 per cent in real terms in the past year, says a new report.
The public gave £1.7bn less to charity than in the previous year, a report by the Charities Aid Foundation (CAF) and the National Council for Voluntary Organisations (NCVO) said.
The total amount donated to charity by members of the public fell from £11bn in 2011 to £9.3bn in 2012. Adjusted for inflation, the fall in donations represents £2.3bn.
The average amount given by an individual was down from £11 to £10.
Some people stopped giving altogether as the report revealed that the proportion of people donating to charitable causes each month had also fallen from 58 per cent to 55 per cent in the past year.
It is the biggest drop in donations in eight years.
The report is based on a survey of more than 3,000 people by the Office for National Statistics.
CAF and the NCVO said the figures were "worrying".
They have launched the Back Britain's Charities campaign to ensure that the work of charities is not damaged by the drop in donations.
John Low, CAF chief executive said he hoped the fall in giving was a temporary decline and not the start of a "damaging trend".
"The drop in giving shown by our survey is deeply worrying for those charities which rely on donations to provide vital frontline services," he said.
"Combined with public spending cuts this represents a potentially severe blow for many charities.
"If donations continue to fall, many charities will face profound difficulties carrying on their work and the people and communities they serve will suffer."
Sir Stuart Etherington, Chief Executive of the National Council for Voluntary Organisations, said: "I am very worried that fewer people are giving to charity.
"Charities are already being squeezed by greater needs, cuts in funding and rising costs."
He encouraged people to commit to regular giving through direct debit and to donate using Gift Aid to help charities in their financial planning.
He added: "I know people want to help when they can and I know that they can make a difference. We cannot afford to lose the services charities provide."