This is a guest post from my new colleague, Dr Eddy Hogg
Research published by the Charities Aid Foundation (CAF) last week showed that Britain is the sixth most generous country in the world, in terms of people’s propensity to help strangers, donate money and to volunteer their time. Our giving is comparable with other Western democracies – the USA, Canada, New Zealand, Ireland, Australia and the Netherlands all join the UK in the top 10 most generous nations. And we are generous – in the last few weeks we have seen Children in Need raise a record £31m on-the-night total, while the DEC appeal for the Philippines has already raised £69m.
A video I saw this week highlighted, though, how different the character of our giving is to other generous nations. If you haven’t already seen it, the goal celebration after the first goal of Canadian ice hockey’s 19th annual Teddy Bear Ross Game between Calgary Hitmen and Medicine Hat Tigers will take your breath away. Words can’t describe it, so have a watch:
You’d have to have a better imagination than me to picture Anfield being covered in teddies after Daniel Sturridge opens the scoring for Liverpool or the Lords outfield being turned multi-coloured with toys as Alastair Cook scores the first century of the English summer. In England, we’re more likely to put money into a collection bucket outside the ground, an understated act of generosity that, unlike the Teddy Bear Toss, may go unnoticed even to those you are with.
Can Britain learn from ostentatious displays of giving? The Calgary match saw over 25,000 teddies donated by a crowd of around 6,000. That’s about as mass participation as you can get. Would more overt displays of giving make more people give, as they see their peers doing so in vast numbers? Or would it make the giving of gifts less voluntary, taking away a defining characteristic of donating to charity? In our research, we’ve found that nearly all major donors give some of their gifts anonymously and are also happy to be have their named attached to other gifts. The decision to go public or not depends on what’s appropriate in a given situation, rather than from an overriding desire to be covert or overt. Events like Children in Need encourage groups of people to come together in schools, workplaces and other communities to give together while having a fun. These aren’t all that different to the Teddy Bear Toss, maybe a little more understated but coming from the same tradition of shared giving. Perhaps all donors, wherever they are in the world, then, make decisions about when to give publicly with others and when to give quietly on their own.
One of the paradoxes of engaging in social media is that the busier you are doing things that are actually worth blogging or tweeting about, the less time you have to blog and tweet.
These past 4 months I have been immersed in rich data on rich givers – writing up a year of in-depth study of UK philanthropists for a new book Richer Lives: why rich people give, co-authored with the wonderful Theresa Lloyd, which thankfully – after many many late nights of writing and re-writing – was sent off to the printers last week and will be published on the 30th September.
I’ll write more about the findings once I don’t risk spoiling the media embargo, and once I’ve got off my chest all the things I’ve wanted to write about but have been too busy to breathe never mind blog.
The first ‘something worth blogging about’ is a new effort to encourage more open data on philanthropic activity. The Indigo Trust is helping to promote an important initiative to encourage UK donors to be more transparent in their grant making. As a researcher, I’m obviously all for people sharing the detail of how much they give and to what causes, but there is a much more important agenda at stake here than making the lives of researchers that bit easier. Opacity favours none and causes concern to many – we all know there is a climate of suspicion about philanthropy and philanthropists in the UK, so why not dispel some misconceptions about the shady goings-on of rich givers and cast a light on what they actually do, rather than what the cynics think they do?
In a note of the first meeting to discuss this initiative, Indigo explain the benefits better than I can:
We believe that being transparent in itself is the right thing to do, but the reasons for encouraging openness go far beyond this. In summary, openness makes grant making better. We believe that opening up grant data will enable more effective collaboration amongst funders and between civil society and funders, allow for more effective strategic planning which will ensure that money gets to where it’s needed the most, enable grant-makers to assess their impact and demonstrate this to the public and enable analysis of interventions across a whole sector such as health or higher education.
If you want to keep up with developments then check out the Open Philanthropy UK blog – and if you’re a philanthropist keen to emerge from the shadows and shine a spotlight on your giving decisions, then do get in touch!
I am delighted to introduce this blog, written by my good colleagues Dr Balihar Sanghera and Dr Kate Bradley, who have spent the past year running a project on Social Justice Philanthropy:
The end-of-project conference, held at NCVO in London on Friday 1 March 2013, was an excellent opportunity to bring practitioners and academics together to discuss the state and future of social justice philanthropy.
The morning part of the conference explored the more philosophical and theoretical dimensions of what social justice philanthropy is, and what it might be. The first session brought together speakers from a wide range of organisations, and likewise a diverse range of viewpoints. This session opened up an extremely useful consideration of the historical development of social justice philanthropy (Stephen Pittam) and a case study of social justice philanthropy (Sara Llewellin), as well as reflective criticism on what exactly we mean by ‘social justice philanthropy’ and its purposes (Andrew Barnett). Issues raised included the idea of whether the sector is ‘retro-fitting’ social justice to philanthropic activities, the need to consider the structural issues that create inequality in a rigorous and critical manner, and to avoid creating an industry that serves its own ends rather than the needs of the disadvantaged (Matthew Taylor, Paul Hackett and Samantha Callan – Callan’s response is here). The second session brought in discussion of our project findings, which drew attention to how grant-making foundations often reject the label ‘social justice’ and only partly realise the liberal ideas of social justice. The session also heard Diana Leat’s reflections on how foundations might change over time.
The afternoon part of the conference heard a rich collection of case studies from practitioners and academics that explored the potential and limitations of social justice philanthropy. Gareth Morgan discussed the implications of the Charities Act 2011 for small grant-making trusts and foundations, pointing out the political significance of the public benefit test. Sinead Gormally presented a comprehensive model of social justice to community development, drawing upon her case study of the Community Foundation for Northern Ireland.
Some speakers critically examined the implications for social justice of ‘new’ and ‘venture’ philanthropy,’ Stephen Ball argued how corporate and family foundations and philanthropic individuals are beginning to assume socio-moral duties that were previously assigned to the state, and pointed out some negative consequences in the education sector. Niamh McCrea also provided a fascinating study on how practices associated with ‘performance-based funding’ can enable and inhibit relationships of love, care and solidarity.
In addition, the delegates heard a variety of practices and experiences from activists, who pursue social justice, peace and civic participation. Representing the radical philanthropy Edge Fund, Sophie Pritchard posed the question that given that most foundations are set up by those who have benefitted from the economic and political systems that produce social inequalities, how will they challenge the status quo? Carolyn Hayman and Tom Gillhespy from Peace Direct shared their ideas on the theory of change and how to evaluate the impact of peacebuilding grants, drawing upon several case studies of conflict resolution. Rob Williamson (Tyne & Wear and Northumberland Community Foundation) and Cathy Elliott Community Foundations for Lancashire & Merseyside) discussed how Vital Signs UK assesses the vitality and aspirations of local communities, identifies local social needs, and opens a debate on the contribution that local philanthropists can make to address them. Natalie Branosky from InclusionUS examined how the concept of ‘philanthropub’ can promote community engagement, volunteerism and civic participation.
We feel that the social justice philanthropy journey is still at a relatively early stage in its development. Foundations who seek to promote social justice and peace should take time to reflect on how they can best embed it in their practices. For example, moving into (or expanding) social investment would increase the impact of foundation cash, by opening up a further front on which foundations can help communities in need. We also need to scrutinise to what extent the income from endowments and philanthropic donations are earned and deserving, as well as to focus on addressing the unhealthy levels of concentrated wealth and power in the UK and overseas. Ways of increasing the input that marginalised groups have into how resources are provided to their communities should be explored. Such activity could range from inviting more people with experience of poverty and deprivation to serve on the trustee boards, setting up advisory boards as well as focus groups. Including previous grantees and other frontline groups in the governance processes of foundations would also be welcome. Social justice philanthropy is a process, and with critical reflection and creative thinking, foundations can continue to progress towards their aims. We hope that the conference on 1 March starts or continues a reflexive conversation about what social justice is.
This blog was written by Dr Balihar Sanghera and Dr Kate Bradley, University of Kent
This time of year in a university is pretty full-on. We finished teaching last week, and need to tackle the mountain of assignments to be marked before the larger mountain of exam scripts appears.
So it was with a spring in my step that I escaped campus last week to attend a stimulating conference on ‘Generosity and Well Being’ organised by two of the brightest minds and nicest people in our field: Prof Kim Scharf of Warwick University and Prof Sarah Smith of Bristol University. Kim and Sarah convened a fascinating group of people from different disciplines (economics, psychology, sociology and social policy) from across the UK as well as from the Netherlands, the US and Canada.
On the day I gave my paper (exploring enjoyment as a driver of giving) the programme was dominated by psychologists. This was undoubtedly some psychic balancing of my joy at having a ‘thinking day’ instead of a ‘marking day’, because I sometimes struggle to know what to make of psychological research into charitable giving. As a fundraiser, it doesn’t help much to know that certain personality types are more or less likely to give – unless there’s a database of ‘introverts’ and ‘extroverts’ with their names and addresses, how do we apply that knowledge? I also have issues with many laboratory experiments, which never seem capable of replicating the real world where subjects have opinions about real causes and charitable organisations, and bring with them their own history of donative behaviour. Perhaps they didn’t give in the lab setting because they already make a regular gift to that cause area, or hold a settled view on that particular organisation?
However, the psychologists attending the Warwick conference proved me wrong, not least Jen Shang’s work on how social information can increase donation size . So when a fellow attendee emailed me a link to a paper presenting psychological research on Avoiding the Ask, I read it with far more gusto than normal, and am glad I did. The paper begins:
“If people get joy from giving, then why might they avoid fundraisers?”
Good question! The authors (James Andreoni, Justin M Rao and Hannah Trachtman) conclude that avoidance (which is so easily interpreted as just plain mean) is in fact often a self-regulation mechanism for those who know that being asked will trigger an empathetic response they feel they can’t afford.
The paper presents findings of a natural field experiment, where Salvation Army fundraisers were positioned by store doors and either made no contact with passerby or made a simple polite request for a donation. The results are astonishing:
“adding the simple verbal request of ‘please give’ is about as effective as adding an additional silent fundraiser”.
These are useful findings for fundraisers. Don’t have enough people to shake your tins? Then train those you do have to interact nicely with potential donors and watch the coins start dropping. And tell your collectors not to take it personally when people swerve to avoid the ask – they’re just scared of their better selves, and those that don’t swerve will give more. Thanks psychologists!
I’ve been in Athens this week, teaching a condensed version of my ‘fundraising and philanthropy’ masters level course, to 16 University of Kent students who are based in that fascinating city, studying for a masters degree in Heritage Management. It makes perfect sense to pursue that degree in a city where there’s the equivalent of a Stonehenge on every street corner. The course leader, Dr Evangelos Kyriakidis is a dynamic and energetic academic, who has not only designed this course but has managed to engage the support of a number of philanthropic individuals and charitable foundations so that full scholarships (fees and living expenses) are available every year to a cohort of students from developing countries. This initiative combines support for bright young scholars with a longer-term contribution to development, as their careers should eventually help to attract tourists to visit the heritage sites in their home countries. An excellent win-win for philanthropists seeking to make a difference in the world.
Talking of which, I returned to the UK to read the excellent news that 12 more names have been added to the Giving Pledge, including 4 in the UK. The pledge is a public commitment, now signed by more than 100 individuals and families, to give the larger part of their wealth to good causes. When this pledge was first launched in 2010, it was suggested that such a public statement of intent would not appeal to individuals and families outside of the USA, so it is heartening to find that is not the case. Here’s some comment on this development from the UK’s Matthew Bishop, co-coiner of the term ‘philanthrocapitalism’, whose opinion is always worth reading.
Last week’s front page of The Times made many people’s hearts sink – including mine.
The Times had exposed a scam that takes advantage of charity tax relief to enable unscrupulous individuals to claim millions of pounds without actually making any meaningful contribution to charitable activity.
Unsurprisingly, some made the link between this revelation and last year’s Budget which attempted to cap charity tax reliefs. Along with many others, I had argued at the time that it was mathematically impossible to enrich oneself by donating, despite widespread public suspicions that tax avoidance was a major motive behind philanthropy.
So thank god for the news, reported in Third Sector, that the attempt to defraud the tax system and damage the image of philanthropy has failed.
But it is still an awful shame that this story was not nipped in the bud the moment it surfaced. The Charity Commission’s statement that it was “not comfortable” with the set up is hardly the kind of firm regulation we need to ensure public confidence in giving and philanthropy.
I hope the Times gives equal, front-page coverage to the news that this scam has failed – otherwise our chances of growing a stronger culture of philanthropy in the UK will become that bit more remote.
Happy New Year!
2013 is going to be a good year for lots of reasons. But the one I’m thinking about today is that I’ll soon be starting a new project on the art of fundraising, kindly funded by the Leverhulme Trust,
The main reason that people give money to charity is because someone asks them to – but despite an increasing body of research into donors, we know next to nothing about those who do the asking. My 3-year study will examine the finest volunteer and paid staff fundraisers in the country to try and work out what it is they do and say that makes this magic transaction happen.There’s an article about my study here on the ESRC website if you want to know more.
I don’t get going on this study until May, but couldn’t resist an invitation from the good people at Civil Society, who publish Fundraising magazine, to write this column about the ‘secret ingredients’ to fundraising success. The article is published today and contains not just the results of a survey of fundraising directors but a joke too. Don’t say I didn’t warn you.
I’m an avid follower of the Institute of Fundraising’s LinkedIn discussion pages. If you have even a passing interest in how fundraising works, and the issues that challenge people trying to raise money for good causes, then I recommend taking a look. It’s worth joining the Institute of Fundraising just to get access to this resource.
One particularly impressive feature is the fabulous, free advice given by the titans of the fundraising profession to anyone who asks. Just this morning someone asked for help, clearly struggling to bring in the money her cause needs. Her question was: ‘How big does a fundraising team need to be to make it effective?’ Giles Pegram (of NSPPC Full Stop campaign fame, which raised £250m), immediately gave this frank and comprehensive reply, which is worth quoting in full:
I said at the beginning of this topic (How big does a fundraising team need to be to make it effective) that my answer is ‘one’, and I still believe it. I presume your finances are in a bad way, or you would appoint a full time fundraiser. Take your Trustees and donors with you.
First, concentrate on researching and then crafting applications to 20 Trusts and Foundations. That will give you some quick money. Which you can use to appoint a full-time fundraiser.
Secondly, write to all your donors, and lay out your position clearly. Ask them to become regular givers at £2 a month. ( I assume there is someone in finance who could help with this ), or give a cah gift, and at the same time invite them to an open day, in your offices to hear from the CEO. Less than 10% will come, but the others will appreciate being asked. Be totally honest with them.
Thirdly, set up a stewardship scheme for all your supporters. Write to them regularly about your work. From time to time ask if they would like to upgrade their regular gift ? become a regular giver, or give a cash gift. Connect them with the cause
Fourthly, ask your Trustees for help. Get them, at least to invite their conacts to the open day. They are responsible for the financial stability of the Charity. And, get them to form a fundraising sub-committee to help.
By now, you must have raised enough to appoint a full time, experienced fundraiser, who can do a proper audit, and create a longer term plan. I said at the beginning, my answer was ‘ one ‘ and I still believe it.
People normally have to pay a lot of money to get advice from people with a fraction of the experience of someone like Giles. The Institute should be congratulated for facilitating this excellent mentoring, and the more people who take advantage of this opportunity, the better our asking culture will become.
I’ll blog properly soon about the latest Million Pound Donors Report, released today. But for now here’s the press release:
The annual Coutts Million Pound Donor Report, released on 10 December and produced in association with the Centre for Philanthropy, Humanitarianism and Social Justice (CPHSJ) at the University of Kent, has found a record total of 232 separate ‘million pound or more’ philanthropic donations made by individuals, trusts and corporations in the UK during 20010/11.
This is the largest total identified by the report in any one year since the study began in 2008, up by 58 donations compared to last year. There has also been a big increase in the number of million pound donors, with 130 different donors identified, up from 73 the previous year (this includes individuals, charitable trusts, foundations and corporations, some of whom made more than one donation worth £1 million or more).
The total value of these donations was £1.241 billion. This is lower than the total value recorded in previous years, down from £1.312 billion in last year’s report, which covered donations made in 2009/10.
More than half of the million pound donations made in 2010/11 were donated by 93 individual donors, with a total value of £763 million. Living individuals therefore continue to be the most significant source of the largest donations.
Higher Education, Arts and Culture and International Development remain the most popular destinations for the largest gifts amongst both individual and institutional donors. But support for environmental causes increased in 2010/11, and all types of charities attract some support from million pound donors.
This annual report, which is now in its fifth year of publication, tracks size, scale and recipients of donations worth £1m or more from individuals, trusts and corporations in the UK and is illustrated with a number of case studies of donors and recipients, who discuss their experience.
The Coutts report also finds that despite the fall in the overall value of ‘million pound donations’, the amount that went directly to charities, rather than being ‘banked’ in foundations, increased from £631m to £747m, indicating a shift towards getting funds out onto the ‘front line’ to charities, many of which are struggling to raise funds from other sources.
One hundred and ninety-one organisations received million pound donations in 2010/11. This is far higher than the 154 recipients identified in 2009/10. The vast majority (166) received only one gift of this size. Organisations that received multiple million pound donations tended to be the oldest universities (notably Oxford and Cambridge) or national arts and cultural institutions.
As in every year that the report has been published, the most frequent size of donation is worth exactly £1m, indicating that ‘giving a million’ has both economic and psychological significance for donors, and is the size of gift that establishes a donor amongst the ‘top rank’ of UK philanthropists.
Dr Beth Breeze, of the Centre for Philanthropy at the University’s School of Social Policy, Sociology and Social Research and author of the report, said: ‘At a time when ordinary donors are finding it tough to maintain their support for charities, it is heartening to see those with a greater capacity to give are stepping up to the challenge in increased numbers. A seven-figure donation is obviously a major commitment, and it is not surprising that people start by making a gift of £1 million, rather than – say- £10 million. But experience shows that if donors feel their money is well spent, and that their contribution is appreciated and makes a tangible difference to the causes they care about, then they will continue to give at this level, and quite possibly increase their contributions. You very rarely meet an ex-philanthropist!
‘Before we started this annual study of million pound donations, there was no clear understanding of the scale, role and significance of the largest philanthropic acts in the UK. That was an important gap in our knowledge that needed filling, because we need a proper understanding of current levels of support in order to make robust plans for developing this much-needed source of income in the future. The data and analysis provided by the Centre for Philanthropy at the University of Kent is helping charities, fundraisers and policymakers to build a decent knowledge base about major giving and gain a better understanding of the main trends in contemporary UK philanthropy, which should help the UK to develop a stronger culture of philanthropy.’
Maya Prabhu, Executive Director, Philanthropy Services at Coutts, said: ‘It’s extremely encouraging for the development of UK philanthropy to note that this is the highest number of donors and donations since we began compiling this report in 2008. Large scale philanthropy is on the increase and the more donors there are and the more they communicate about the benefits their philanthropy brings to society and what it means to them personally, the more it will grow and strengthen a new generation of philanthropists.
‘Despite the scepticism suggesting that many large scale donors are simply looking to make the most of ‘tax breaks’ on offer, our experience, as backed up by this report, is that the reality is very different. Today, the majority of the philanthropists we meet are self-made individuals, many of whom have witnessed first hand the highs and lows of building a business, and on occasion, the possibility of losing everything. It’s a strong desire to make a contribution to the world that has afforded them so many opportunities, whilst also enriching their own lives, their families and the lives of others that we see as the main driver for their philanthropy.’
The Coutts Million Pound Donor Report has been published annually since 2008, all five reports are freely available online here.
If anyone would like a hard copy of the 2012 report, please email me at b.breeze(at)kent.ac.uk
The past year has been a turbulent one for philanthropy in the UK.
Whilst progress has been made in doing more to celebrate and encourage those who give away some of their private wealth to promote the public good, the repercussions of last Spring’s Budget continue. The proposal to impose a cap on charity tax relief was announced, roundly criticised, and eventually (and thankfully) dropped. But the pain it caused to philanthropists, who found themselves labelled as tax dodgers and accused of contributing to ‘dodgy charities’, goes on. Earlier this week when the topic came up in a roomful of donors, the emotional impact was apparent. A man who has given generously to a range of causes said he was ‘apoplectic’, and in fact seemed to still be in a state of apoplexy.
So at a time when the motives of philanthropists and the purpose of philanthropy is under such scrutiny, it is welcome that this year’s Attlee lecture focused on this very topic. Sir Stuart Etherington’s lecture, called Philanthropy, Fairness and Democracy is well worth a read. Here’s the concluding paragraph to whet your whist:
Society is a better place thanks to the altruism and reciprocity of us all: rich and poor, young and old, donors of time and money. And whatever the weaknesses inherent in philanthropy and voluntarism, the value and values they bring mean we should nurture and celebrate them.
Just a quickie today, more to draw attention to what someone else has written than to share anything original from my desk. But with an added complaint as bonus material.
I enjoyed this blog on ‘Fundraising around the World’ by Jenna Pudelek at Third Sector magazine. The description of the successful launch of face-to-face fundraising in the poor country of Nicaragua is a real one-in-the-eye for those who moan about people asking for money for good causes in this wealthy country.
For the purposes of balance, an item in today’s Civil Society Media (still known as Professional Fundraising to most of us) annoyed me, for a similar reason to the item in Third Sector magazine that I wrote about in my last blog.
It is incredibly frustrating when the media (especially the charity sector media who ought to know better) focus on costs to the exclusion of taking an interest in outcomes and impact. Last time my complaint was an excessive focus on the cost of charity re-brands, and today it’s an otherwise nice article about a new legacy campaign from the Red Cross, which contains this sentence:
While he wouldn’t be drawn on the cost of the campaign, Jacques said that: “For the British Red Cross, this is a significant investment.”
Too right he wouldn’t be drawn on the costs – but I bet he’d have been willing to have a discussion about the projected return on investment.
Come on charity sector media – leave this sort of nonsense to the tabloids and write articles that reflect the reality of running professional organisations in the 21st century.
Today’s Third Sector carries an article about a re-brand of a major UK charity. The headline is:
Institute of Cancer Research launches £187k rebrand
This is not a neutral headline – it’s a ‘Hey did you hear how much a charity supported by little old ladies and schoolkids has spent on crazy designer people?’.
I normally don’t read this kind of article as it makes my blood boil. But today I clicked to read it and my blood boiled at an even higher temperature when I read, buried underneath the insinuation that honest folks’ money has been wasted, the following sentence:
[ICR] provided the first convincing evidence that DNA damage is the basic cause of cancer, laying the foundation for the now universally accepted idea that cancer is a genetic disease.
So let’s get this right – it’s a really good charity with proven impact that decided it needed to spend some money on a new logo to raise its profile and attract more donors? Hold that front page….
I look forward to future articles on how much the NSPCC dares to spend on heating its offices, and how much the Royal British Legion wastes on paying people to answer the phone.
Our sector is held back by assumptions that it’s possible to run cutting-edge organisations without spending a penny on anything other than core costs. And the newspaper that leads coverage of our sector ought to know better than to spread insinuations that reputable charities are wasting donors’ money. Shame on you Third Sector!
The debate about the relationship between taxes and philanthropy was opened up by this year’s Budget and its (thankfully) ill-fated proposal to cap tax reliefs on major donations.
But whilst that proposal went away, the important issues it pushed to the forefront about the nature of the difference between paying tax and making voluntary contributions remain pertinent but so far unanswered.
A US commentator, Mark Rosenman, has written this interesting piece about these issues in his country. He notes that research shows when taxes go down, there is no concomitant rise in donations, and he also notes that philanthropically-funded institutions do not meet the same needs or serve the same people as those that democratically elected governments tend to prioritise.
Mark’s piece may be – as ever – about the US but it contains many interesting points for those of us in the UK who are concerned about similar issues, and is well worth a read.
Fascinating new research from the US finds that living in rich-only enclaves rather than in mixed income communities is related to lower levels of philanthropy.
The study was conducted by specialist US newspaper The Chronicle of Philanthropy (how I wish we had a UK equivalent!), which cross-checked giving patterns with zip codes (postcodes). The article about the study is here, and this is the finding that jumped out at me:
Rich people who live in neighborhoods with many other wealthy people give a smaller share of their incomes to charity than rich people who live in more economically diverse communities. When people making more than $200,000 a year account for more than 40 percent of the taxpayers in a ZIP code, the wealthy residents give an average of 2.8 percent of discretionary income to charity, compared with an average of 4.2 percent for all itemizers earning $200,000 or more.
It looks like gated communities don’t just keep out the riff raff – they close the gates on generosity too.
It’s tricky doing such mail outs, trying to balance the potential of clogging up someone’s doormat with unwanted mail versus leaving someone else’s bookshelf bereft of a report they’d find interesting. If we got it wrong and you’d like a hard copy then please just drop me a line at b.breeze(at)kent.ac.uk
The report presents and discusses the findings of 5 focus groups held around the UK with young people living in homeless hostels. In the light of suggestions that some fundraising materials amount to ‘poverty porn’, using exploitative pictures of beneficiaries to secure donations, we wanted to find out how those depicted feel about the images used in fundraising campaigns.
We found that this group of charitable beneficiaries were largely supportive of whatever methods raise the most money, but they also expressed a preference for fundraising imagery that elicits empathy and ‘tells stories’ about how people find themselves in need of charitable assistance, rather than pictures that provoke pity and depict them at their lowest ebb.
Yesterday the Chancellor announced he would not proceed with the proposed limits on tax reliefs for charitable donations. This was a surprising, yet deeply welcome move. Despite the proposal being unworkable, unfair, uninformed by evidence, and opposed by a unique coalition of donors, charities and public opinion – the government seemed unlikely to pursue the only ‘U’ anyone wanted: a full U-turn.
In the ten weeks since this proposal was first announced in the March Budget, the mood music from the Treasury has shifted from insulting (“philanthropists are tax dodgers”) to intransigent (“this will happen”) and finally to face-saving (“how can we fix this without looking bad”). The desire to save face and avoid a politically-dreaded U-turn, made a watered-down version of the original proposal seem the most likely outcome. So yesterday’s announcement was a welcome bombshell – the best Jubilee gift for all those reliant on raising funds from the rich.
Yesterday I enjoyed taking part in a lively online discussion organised by the Guardian newspaper’s Voluntary Sector Network. The topic was ‘Managing Major Donors’ and a good panel of experts was assembled to field questions on this topic, which is of increasing importance to charities up and down the country.
Over two hours, we addressed issues such as how to initiate relationships with people who have the potential to make major gifts, how individuals differ from corporate donors, and the extent to which impact reporting matters. The transcript of the whole discussion is available here and I hope it makes useful reading for people looking for advice in this area.
But all through the session I had a niggling worry about the title. Do the generous, wealthy people who choose to share their resources (including money, time and expertise) with good causes really want – or expect – to be ‘managed’ by the charities they support? This is part of a wider problem of the language used in the fundraising profession, whereby anyone we hope might support us becomes a ‘prospect’, who is then put into a ‘prospect pipeline’ and invited to ‘cultivation events’ before becoming a donor who is ‘managed’ or ‘key worked’.
One of the worst examples I heard was a senior fundraising consultant say – in front of a seriously major donor – ‘how can we extract more funds from people like X?’ Extract? Are we taking out teeth or inviting people to join us in creating a better world?
I am just as guilty of making flippant comments and using intemperate language, and was rightly put in my place a while back by a major philanthropist who gently suggested that perhaps we could all have a bit more respect when talking about the people who choose to use their private wealth to promote the public good.
So my mid-new year’s resolution is to stop saying things that I wouldn’t say if the donor could hear me. I’d be interested to hear if anyone else has noticed a similar problem in their organisation.
Nearly a month after the Chancellor dropped his bombshell in the Budget, announcing a cap on tax reliefs for charitable donors, the House of Commons finally had a chance to discuss the matter in yesterday’s debate on the Finance Bill. Here’s an extract from the debate:
Rachel Reeves (Labour, shadow chief secretary to the treasury): …included in the Government’s definition of tax avoidance is tax relief for donations to charities including UNICEF, Macmillan Cancer Support, the Royal National Lifeboat Institution, Oxfam and many others. The fact that the Government cannot tell the difference between that and real tax avoidance shows how incompetent and out of touch they are.
Mrs McGuire (Labour MP): Does my hon. Friend agree that it might have been more appropriate for the Chancellor to discuss with the charity commissioners whether bogus charities were taking part in tax evasion schemes than to have come up with an ill-considered tax proposal?
Rachel Reeves: I thank my right hon. Friend for that intervention. She is absolutely right: instead of the Government making up policy as they go along, without bothering to talk to anybody who is affected by it, they should have consulted the Charity Commission and the charities affected. The Press Association reports that the Government are doing a U-turn; perhaps we will get clarification on that from the Chief Secretary to the Treasury, if he is bothering to listen to anything that is being said this afternoon. Will he confirm what the PA says—that there is a U-turn on charities tax relief? The fact is that nobody knows: the Government and the Prime Minister do not seem to know what is happening with their own policy, and we have had no clarification in the House this afternoon.
Charlie Elphicke: It is clear that we should crack down on tax avoidance, but I want to know whether the hon. Lady is serious about doing so. Will she condemn the tax avoidance of people such as Ken Livingstone, or is this just more crocodile tears from the Labour party?
Rachel Reeves: We are serious about cracking down on tax avoidance, but tax avoidance is not the same as giving donations to UNICEF, Macmillan nurses, the Red Cross, the National Trust and thousands of charities in this country that rely on the money they get to do their important work, often supporting some of the most vulnerable people in society. If the Government cannot tell the difference between tax avoidance and doing the right thing and supporting valuable charity work, it shows the extent to which they have lost their grip on reality.
Mr Ben Wallace (Tory MP): Does the hon. Lady agree that before people give money to charity, they must also fund their obligation to society? They must do that first, before they start funding charity.
Rachel Reeves: If the hon. Gentleman extended that logic, there would be no tax relief for giving to charities. I am not sure if that is what the Government are proposing. People who give money to charities should be supported. We have heard a lot from the Prime Minister about the big society, but all those words about philanthropy and giving seem to have gone out of the window. It would be interesting to know whether the Chief Secretary thinks he has performed a U-turn this afternoon in the Chamber, as is being reported.
As the British Red Cross said, “Not only is such a measure at odds with the Government’s own announced agenda of increasing and facilitating philanthropy, it would reduce our ability to achieve our charitable objectives and reduce our help to people in a crisis.” Is that really what the Government intended when they announced these changes to tax relief in the Budget? Indeed, after the performance of the Exchequer Secretary to the Treasury on the radio this morning, it seems that, along
with “expansionary fiscal contraction” and “we’re all in this together”, the latest casualty from the Conservative lexicon is the big society.
Christopher Pincher (Tory MP): Earlier the hon. Lady was extolling the virtues of the United States. She will know that even the US, which is possibly the most philanthropic society in the world, has a cap in place on philanthropic donations, so is she opposed to the principle of what the Government are doing, or does she accept that there is a role for a cap?
Rachel Reeves: In the US there is much more generous tax relief for legacies, for example, so it is a very different tax system. In many ways it is more generous than the system in this country. What I would like to see is policy being made in the proper way, which is by consulting the people who will be affected by it—consulting the charities, which stand to lose tens and perhaps hundreds of millions of pounds and which do such good work. Like the Red Cross, they say that their ability to do their work will be hampered by the changes in tax relief. That consultation should have happened before, rather than after, the Government’s policies were announced and the financial changes to Treasury revenues were introduced.
Calling people who give to charities tax dodgers, as this Government imply, and referring to charities as dodgy, when those charities include Macmillan, Red Cross, UNICEF and Oxfam, is unhelpful. If the Government truly want to increase giving, the language should be tempered and people who try to do the right thing and support worthwhile causes should be encouraged, not insulted, for what they do.
Just over a week ago, I was relaxing after giving one of the final lectures on my ‘Fundraising and Philanthropy’ course, anticipating the chance to get out and enjoy the sunny weather. Readers, I was wrong. That afternoon, George Osborne gave his Budget and dropped the bombshell of a new cap on all personal tax reliefs.
If the sun has shone since that fateful day, I would’t know about it (though I haven’t put in nearly as many hours as the heroic Karl Wilding at NCVO who launched the GiveItBackGeorge campaign before Osborne had sat down).
Unlike colleagues who immediately understood this was madness and all efforts had to be immediately activated to stop it, I originally thought it was just a mistake. Given the iron core of pro-philanthropy sentiment running through this government, they couldn’t possibly mean to include charity reliefs in the cap, and as soon as they realised their mistake they’d issue a clarification and we could all go back to sunbathing. Reader, I was very wrong again.
When Third Sector magazine reported HMRC had confirmed they did indeed mean to include charity reliefs, my heart sank even further and I realised the extent of the battle now being faced by everyone who cares about promoting a philanthropic culture in this country.
For now, the focus is on doing the maths and explaining the complex issue of tax reliefs in as simple a way as possible, to prove that this cap will hurt charities and their beneficiaries. Everybody’s brain is aching – mine more than most as I don’t count numeracy amongst my limited range of skills. So three cheers for Rhodri Davies of the Charities Aid Foundation, who has written this superb blog containing worked-out examples of the impact of the Budget measures on giving. I can’t recommend it highly enough.
For those of us who are tired, innumerate and still reeling with disbelief, there is something we can do that doesn’t involve being as clever as Rhodri or as irrepressible as Karl: Click onto this page right now and back the GiveItBackGeorge campaign.
The headline in yesterday’s Third Sector news made depressing news: ‘Almost half of donors are giving all they can, says Institute of Fundraising survey’. Really? Do monthly gifts of £11 (the median monthly donation reported in UK Giving 2011) really represent around half the nation at full altruistic stretch? Is it true that so many of us can afford 37p a day and not a penny more, to support all the good work being done by charities up and down the country and around the world? Surely not. Fortunately, things are unlikely to be as clear cut as the headline suggests.
For a start – and it’s not the IoF’s fault as they presumably didn’t write the headline – it should have read: ‘Almost half of donors claim that they are giving all they can’. There is a big difference, because this is attitudinal rather than behavioural research, based on what people say about what they do, don’t do, might do, won’t do – rather than research into reportable actions and tangible behaviours. Attitudinal research is notoriously inaccurate as there is a great gulf between thinking and doing.
As an interesting anti-market research argument notes: it’s widely accepted that what people say they’ll do is often very different from what they actually do. Observational research – watching what consumers do and analysing their behaviour – yields more useful data. In this case, donors might think they have nothing to spare, but the year-on-year increase in funds raised by many charities tells a different story. When faced with a persuasive ask, made by a credible and trustworthy organisation, it turns out people can dig a little deeper.
Just look at the money that will come flooding in this weekend to Sport Relief – times are still tough post-recession, and the government’s cuts are starting to hurt, but the fundraising genius’ at Sport Relief will undoubtedly generate yet another impressive sum.
The Guardian newspaper is my paper of choice, and read by pretty much everyone that I know and like. I met my husband with the help of the Guardian Soulmates service, and a highlight of last summer was our son’s joke being published in the Guardian kids page. So it’s fair to say that the Guardian is the most significant brand in my life and the one aspect of living in the UK I miss the most when I can’t get my daily fix.
But no relationship is perfect, and that paper’s coverage of philanthropy has long been the imperfection I’ve put up with in return for getting a reliable update on what’s going on in the world, and for the joy of reading my favourite columnists (thank you Tim, Lucy, Hadley, Zoe). If you don’t agree, or never noticed, that the Guardian has it in for generous rich people, here’s two particular low points in their coverage of philanthropy:
(1) Michelle Hanson’s barbed response to news that Bill Gates was committing over $30 billion to good causes:
“Bill Gates is giving millions [sic] to charity. So? Why not? What else could he possibly do with all his money except coat himself in treacle and roll in banknotes?” (28/11/06).
(2) Simon Jenkins’ comment on Warren Buffett’s decision to add another $30+ billion to the Bill and Melinda Gates Foundation:
“when the world’s second-richest man gives most of his money to the world’s richest man, we do well to count our spoons” (28/06/06). (If anyone can tell me what he means, I’d be glad to hear it).
So the broadly positive article on philanthropy, published in yesterday’s Guardian, asking why the UK public is so suspicious of philanthropists, was a very welcome novelty. Granted, I’m quoted in it a few times – that’s nice and good for our university ‘impact’ scores – but I am genuinely delighted to see someone (thank you Jon Henley) make the argument that it’s time to cheer, rather than jeer, at wealthy people who decide to use some of their private wealth for the public good.
Plenty of fellow Guardian readers disagree, as the comments beneath the online version of the article make clear. But as Jenkins might say: when the world’s best newspaper provokes the world’s best readership, we do well to count our spoons.
The last time someone asked me to recommend a book came via Twitter, and as it’s not really possible to say much in 140 characters, I thought I’d write a blog about it instead.
The very personable and knowledgable Caroline Fiennes asked a few fellow tweeters ‘What’s the best thing you’ve ever read about corporate philanthropy?’. My answer is below – it’s the reading list for a lecture on corporate philanthropy that I’ll be giving next month, as part of a new course on ‘Fundraising and Philanthropy’ within a new Masters degree in Civil Society Studies at the University of Kent. If I had to pick a top 3, I’d go for Burlingame & Young, Sargeant and Jay and either Friedman for provocation or Emerson Andrews for a more thoughtful approach.
I’d be delighted to hear if anyone else agrees, disagrees, or has other books to suggest.
Best books on Corporate Philanthropy
Dwight Burlingame and Dennis Young (1996) Corporate Philanthropy at the Crossroads Bloomington: Indiana University Press
Thomas W. Dunfee (2011) The Unfulfilled Promise of Corporate Philanthropy in Illingworth, P., Pogge, T. and Wenar, L. (eds) Giving Well: The ethics of philanthropy. Oxford: Oxford University Press
Frank Emerson Andrews (1992) Corporate Giving. Rutgers, NJ: Transaction publishers
Milton Friedman ‘The Social Responsibility of Business is to Increase its profits’ in New York Times magazine
Kym Madden and Wendy Scaife (2008) Corporate Philanthropy: Who gives and why?’ in Sargeant, A. and Wymer, W. (eds) The Routledge Companion to Nonprofit Marketing. London: Routledge
Valerie Morton (2002) Corporate Fundraising (3rd edition). London: Directory of Social Change
Adrian Sargeant and Elaine Jay (2010) Fundraising Management: Analysis, planning and practice. London: Routledge (chapter 11 Corporate Fundraising)
I love a challenge, so I couldn’t resist it when Martin Brookes asked me to name the UK equivalent of the US ‘donors to watch in 2012′ list. Here goes:
1. Jamie and Chris Cooper-Hohn – the hedge fund couple who have so far put £1bn into their Childrens’ Investment Fund Foundation, have been on the receiving end of some criticism for not distributing it fast enough. But in the 2011 Million Pound Donors Report, seven of the donations came from this philanthropic power couple, and it seems likely their momentum will only increase. Impact and transformation are the key words for the Cooper-Hohns. When Jamie was profiled in the 2008 edition of the £M Donors Report, she said, “When we give million pound grants,it is definitely an investment and not a gift. We want to know what the organisation will do in a really big and meaningful way that it wouldn’t have done otherwise”.
2. John Stone – not a very well-known name yet, but another philanthropist taking a slow and steady approach who seems on the verge of spending big. His Stone Family Foundation now holds over £40m and last year made grants to a wide range of charities, from just £2k to almost half a million pounds. John has received advice from both New Philanthropy Capital and Coutts, and told the 2011 £M Donors Report: “It has taken me five years to scale up my philanthropy… I wanted to be sure that my money would be put to the best possible use and have the biggest impact on those I chose to help. It does take time to give strategically in this way, but I believe it is better to proceed slowly and carefully to ensure that philanthropic donations are committed wisely”.
3. HSBC – I choose a bank rather than an individual because HSBC are at the forefront of providing a new way of giving in the UK, through the ATM or ‘hole in the wall’ cash machines. Whilst it may take some time for people to think about this transaction as an opportunity to give money away, rather than take it out, it undoubtedly has the potential to become a major new giving vehicle, given the ubiquity of ATMs on every high street. Interestingly, the six charities named on the ATM screen are selected by a democratic vote open to all HSBC staff. As the selections are only reviewed every two years, smart charities will no doubt be looking to make their case for inclusion in the next round.
4. Instead of an individual, my 4th suggestion is ‘the next generation’, as the children of some of the UK’s big philanthropic names are now coming to the forefront as trustees, spokespeople and decisions-makers for their family foundations. For example Anita Roddick’s children, Justine and Sam, have a controlling role in their mother’s £50m+ charitable legacy. The large philanthropic Sainsbury family now has 17 charitable trusts and foundations, some controlled by supermarket heirs in their 20s and 30s. And the next generation are now running the Wates Family Foundation, as patriarch Andrew Wates told the 2011 £M Donors Report: “Many of the applications are being initiated by the family members themselves. It has been a real joy to see the participation of the next generation in our family philanthropy. They are now running it and it gives me tremendous satisfaction to see that”. As in most families, the younger Sainsburys, Roddicks and Wates are likely to have different interests and concerns than their parents, but how much do any of us know about who they are and what they care about?
5. My 5th and final choice is even more abstract: the donors who are choosing to spend out the entire capital of their foundations, rather than distributing a percentage in order to follow the traditional model of existing in perpetuity. Whilst endowments are a good thing and the right way to fund certain causes, the ‘spend out’ model will hopefully be considered as an option by an increasing number of philanthropists whose causes require urgent and large investments, rather than slow and steady support. The idea of giving it all away in a defined time period is gaining popularity, not least since Bill & Melinda Gates adopted this strategy. In the UK a couple of useful reports have studied the phenomena, including one from the Institute for Philanthropy and from the Tubney Trust, which closes this year after spending £65m in the past decade and a half, leaving behind this valuable reflection on its experience. Might 2012 be the year to ask ambitious and impatient donors to ‘give it all away’ rather than asking for a tiny fraction of their philanthropic pie?
It’s been fun thinking about this question, I hope others will be inspired to disagree and suggest other names and types of donor.
There’s only one question on people’s lips when we launch each new edition of the annual ‘Coutts Million Pound Donors Report’: “Who are they?” Instead of a 30 page document full of statistics and stories about mega-giving, we’d get a much better reception if we just distributed a piece of A4 listing names and addresses. But this is research, not prospect research – and there’s a significant difference between the two, that I have written about elsewhere. The purpose of the Million Pound Donors Reports is to shine a light on the scale, scope and importance of giving at this level and to lift the lid on the experience of both making and receiving 7 (or more)-figure gifts.
The 2011 report is the fourth edition, in which yet again we describe and discuss all that we have been able to discover about charitable donations worth £1 million or more, that were made by UK donors or given to UK charities in the preceding financial year. We always begin the report by admitting upfront that we’re sure to have missed some of these biggest donations and that our data is likely to under-estimate the true value of this largest level of philanthropy. No one has a duty to report their involvement in a million pound charitable transaction, and they can be tricky to track down if they’re made anonymously, or have not appeared in an identifiable form on the public record. Nor does our report include very big donations that fall below the lower threshold of £1 million, so we cannot claim to capture all instances of significant giving, as gifts of £10,000 – £999,999 are still of great importance to the causes they benefit. But we do maintain that ‘million pound donations’ remain a useful unit of analysis because – to borrow the phrase of a donor mentioned in the 2011 report – giving a “one-er” is economically, culturally and psychologically significant to all concerned. It is the size of gift that establishes a donor amongst the ‘top rank’ of UK philanthropists.
The most recent report, launched in December 2011, covers gifts made in 2009/10 and finds that this top rank is somewhat depleted. There were decreases in both the number of separate occasions on which million pound donations were made (we found 174, compared to 201 the previous year) and in the cumulative value of these donations, which were worth £1.312 billion, compared to £1.548 billion for the preceding twelve month period. In other respects the data shows remarkable stability – Higher Education continues to be the favoured cause, almost half (44%) are worth under £2m, just 10% are worth £10m or more, and a larger fraction (52%) is ‘banked’ into charitable trusts or foundations for distribution at a later date, rather than given directly to front-line or operational charities for spending in the nearer future.
But – as anticipated – most media coverage of the report was dominated by the change (for which, read: decline) in the headline figures, despite our efforts to emphasise that it’s not sensible to read too much into the year-on-year trends in a dataset of this size. If you don’t believe us, then we quote data guru Karl Wilding, Head of Research at NCVO who says:
“They say that one swallow doesn’t make a summer, and it’s also true that one data point does not make a trend. The ups and downs in the number and value of million pound donations looks to me like the sort of natural undulation you would expect to find in this sort of dataset.”
So, what is the big story in the 2011 report, if it doesn’t reveal new names for fundraisers to pursue, nor offer a tale of doom and decline? I believe that the comparison with major giving in the US is the most interesting angle to emerge. The Million Dollar Donor List (now freely available on a swanky website www.milliondollarlist.org) charts gifts of $1m+ by calendar year, and finds a drop from $12.87 billion in 2008, to $4.97 billion in 2009 and $4.44 in 2010. That drop of more than a half far outstrips the UK’s dip of 15% – which is surely good news for a country that constantly compares itself unfavourably to the philanthropy of our Transatlantic cousins?
The whole 2011 report is available here on the University of Kent website – please take a look, let me know what you think, and feel free to give feedback so we can improve the 2012 edition.
As the first coverage of our new report on donors making gifts worth £1m or more is hidden behind a paywall, I’ll paste it here – until someone tells me I have to take it down!
Donors say: give us more of a break
By Elaine Moore
Financial Times, Saturday 10th December 2011
The government hopes to encourage greater charitable giving by introducing tax incentives for donors – but wealth managers are unsure whether lower tax bills will reverse a decline in philanthropy.
Between the 2009 and 2010 tax years, the number of large donations of more than £1m fell by 15 per cent, according to the latest Million Pound Donors report from Coutts.
This fall “mirrors the general sentiment in the economy and financial markets in the year 2009/10”, the private bank says – and matches a similar fall in the US.
As a result, UK charities are facing new challenges. Multimillion pound donations still largely go to the same causes: universities and arts institutions. That leaves charities with less money to compete for, as the value of large donations has also fallen from £1.5bn to £1.3bn in the space of a year. And their funding is running out sooner, as the time that individuals take to make a decision about giving has increased.
To boost the depressed level of donations, the government has confirmed plans to introduce a lower rate of inheritance tax (IHT) for charitable donors.
As of April 6 2012, a new 36 per cent rate of IHT – down from 40 per cent – will apply to those who leave at least 10 per cent of their estates to charity.
This tax rate will apply to the remainder of their estates – including jointly-owned property and some trust assets.
However, the complexity of implementing the rules could limit its impact, say tax advisers.
Law firm Boodle Hatfield points out that the new inheritance tax rule will apply to just 3 per cent of estates. Other advisers, including PwC, have therefore asked whether there is a simpler way to encourage the wealthiest members of society to increase their giving.
Some have called for the introduction of “charitable remainder trusts” in the UK – a form of tax relief available to US donors who promise to give away an asset to charity after death. So far, there has been no positive response from the government, but advisers believe the possibility remains open.
Philanthropy offices in Britain’s private banks agree that favourable tax treatment alone will not change the culture.
Research in the government’s philanthropy green paper, published last year, reveals the scale of the gap between levels of UK and US philanthropy. In the UK, individuals give on average 0.5 to 0.8 per cent of their investable assets to charity. In the US, investors give up to 3.5 per cent of their annual assets.
Coutts says this is partly due to the tradition of charitable donations, differing tax systems and the sophistication of US fundraising schemes.
Several high-profile individuals are now trying to promote philanthropy in the UK through a campaign titled Legacy 10.
Its aim is to persuade the wealthiest members of society to leave at least 10 per cent of their estates to charity.
Such “clubs” are already established in the US, where mega-donors – such as billionaire investor Warren Buffett – encourage their peers to donate half of their wealth in their lifetime. But the impact of the economic slowdown is expected to maintain downward pressure on giving.
“We think that, in the years directly after the financial crisis, donors were still honouring pledges they had made in the years preceding it,” says Beth Breeze from the Centre for Philanthropy, Humanitarianism and Social Justice at the University of Kent. “Now we see donors approaching things a little differently.”
In straitened times, charities are becoming more imaginative in their approach to fundraising.
Social impact bonds, already used by public institutions to raise money from private investors, are being utilised by the charity sector to gain revenue.
Scope, the disabilities charity, has entered capital markets with a £20m bond issue on the Luxembourg-based Euro MTF stock market, designed to pay for new retail and fundraising operations.
“The charity bond programme operates in a similar way to the corporate bond products,” says Geoff Burnand at Investing for Good, which set up the bond.
“Charities using the programme will be able to issue tranches of debt at varying amounts, maturity dates and coupon rates which gives them certainty over their cost of funds and away from dependencies on irregular donation flows.”
Government “matching” schemes have also proved successful. Support for higher education was boosted by a scheme that promised to match any contribution from an individual to a university.
I’m not a fan of confrontation but I recently felt the need to pick a fight with those people who knock fundraising research and say things like “why not just give all the money to charity instead of spending it on researching fundraising?” So I emailed Stephen Cook, editor of Third Sector magazine, and asked if I could write an article about this. He kindly said yes, and I felt much better once I’d got it off my chest. Time trundled on and now here we are a few weeks later and today my comment piece was published here.
I must admit to being a bit worried about the reaction because I’d trotted out a few cliches about academics (self-indulgent, long-winded, inscrutable) and I’d suggested there’s a difference between ‘prospect research’ and ‘proper research’. The crux of my argument is in this para:
Research into fundraising will always leave fundraisers feeling dissatisfied because, however much their heads are interested in the bigger picture, what their heart really desires is the names and addresses of sure-fire donors. It’s even worse in face-to-face encounters. Me: “I research philanthropy.” Other: “Oh good, do you know anyone who’ll give me some money for this wonderful project?” Me: “No, but we could talk about how life experiences affect giving patterns.” Other: “???”
It’s a good job I’m not a fan of confrontation because it turns out I’m pretty hopeless at picking fights. No one is offended, plenty seem to agree and lots of people have emailed and tweeted approving comments. Best of all, my invitation to give a talk at the Prospect Researchers conference in London next month has not been rescinded (yet).
Today I finally heard some common sense from the Manchester gathering of Tories, as Ed Vaizey MP told his party conference that charity chief executives have to roll their sleeves up and get properly involved in the tough but essential job of raising the funds that keep their organisations going.
It reminded me of an American I met when working at the Institute for Philanthropy, who told me about a dinner party in London where it seemed more acceptable to discuss the BO of the person she was sat next to, than to ask them about their charitable giving.
The British cultural problem with money encompasses donations as well as earnings, and extends to the most curious places, including the colleagues of fundraisers who manage to persuade themselves that raising the income to keep the charity going (never mind to keep their salaries being paid) is not their job and therefore nothing to do with them. I remember asking a colleague for help with approaching a tricky but valuable prospect – he refused, despite agreeing it sounded a tough job, and offered the sage advice: “but hey, that’s fundraising!” I made a mental note that not a penny of any income raised from that source should be used for his projects!
Sadly Mr Vaizey went on to rather spoil his message by churning out the usual nonsense about charities being useless at thanking and recognising donors. I’m sure a few are, but on the whole charities (or more to the point, their fundraisers) work extremely hard to ensure that donations are promptly and properly acknowledged, and donors are thanked in as proper and personal way as funds allow. But it’s one of those classic damned if you do/don’t scenarios – for every donor who feels unappreciated by their chosen charity, there’ll be another who thinks its a horrendous waste of money to be sent any sort of follow-up communication after their gift.
I simply don’t believe that none of the charities supported by Mr Vaizey have failed to engage or thank him, and I wish he had balanced his remarks by sharing examples of good donor care. These are tough times for charities and we need helpful policy support, not populist, crowd-pleasing posturing.
Now I’ve been back from maternity leave for a few weeks, it’s time to get into the swing of one of the best bits of my job – media work. I always prefer writing 800 words of lively prose for a general educated audience over writing a 5,000 word academic paper for a Journal, which will be read by a handful of people (at least half of whom know in advance they don’t agree with me) – even if the latter will do far more to advance my career.
Not being shy of media coverage myself, I read with some trepidation a good blog post taking issue with academics who try to get their name all over the press, whether or not they know what they’re talking about or have the data to back up their positions.
Which makes me all the more hesitant to admit that I’m pleased to have a piece on today’s Guardian website about my recent research into how donors choose charities. I MUST try to get these findings published in a journal soon. But for today I shall enjoy what I believe is technically known as ‘impact’, otherwise known as ‘something to show your family to prove you do have a proper job’.
As others have noted, there is too much news at the moment. The current UK riots are the latest massive story to grab the headlines after a succession of other major incidents that would normally hold media and public attention for much longer. 2011 is the year in which developments of global significance happen simultaneously – the Eurozone crisis, the Norwegian massacres, the News International scandal and the American debt crisis, to name just four from recent days and weeks.
At huge risk of being lost in this superabundance of significance, is the drought in East Africa, where ten million people face starvation and tens of thousands of people have already died. Today’s Guardian reports that less money has been raised than for other recent major fundraising appeals run by the Disasters Emergency Committee, such as the Haiti earthquake in 2010 and the Asian tsunami in 2004.
One reason offered for the inability of this humanitarian emergency to compete with the glut of other issues crowding the media agenda, is the absence of sufficiently compelling visual images from the crisis-hit area. Inaccessibility and safety concerns are preventing journalists from reaching the heart of the disaster area where they can produce TV footage and press photographs that conveys the full horror unfolding in east Africa. It seems that donors need visual proof, or at least visual prompts, to encourage them to reach for their wallets. Yet when such footage and photos are available, it can create concerns about the ethics of exploiting the suffering of those depicted, as effectively encapsulated in the term ‘disaster porn’.
So what are we to do? Use the pictures that are most likely to elicit the largest donations, or insist the dignity of potential beneficiaries is respected, even if that results in less successful fundraising?
We are exploring this tricky issue with a small study undertaken as part of our work within the ESRC Centre for Charitable Giving and Philanthropy. Our research uses focus groups to find out what people who use the services of homelessness charities think about the images of homeless people that appear in fundraising materials. The interim findings, available here, suggest that the beneficiaries are more relaxed about the use of images than might be predicted. Participants do note that fundraising adverts are often too simple, using images of atypical homeless people, many of which look “fake” or “staged”, or use images that are too generic and fail to help donors understand to the issues surrounding homelessness. Yet our focus group participants strongly viewed the maximisation of income as the most important outcome, and understood that the most powerful images may not be either educational or accurate. In the words of one young man:
“When you’re in the situation and you ain’t got no money of your own your ain’t got time to be judgemental, so if the organisations haven’t got their money in the first place to help you then the whole system breaks down, really and truly, Just get the money, hook or crook, y’know? “
Clearly there are important differences between domestic causes helping young adults, and international development charities helping the starving, including babies and children who cannot consent to the use of their images. But if the lack of effective imagery is indeed a key factor behind the slow start to the East Africa appeal, might that cause anyone to rethink their views on the dangers of using the most provocative pictures?
Wonderful to spend time at the Institute of Fundraising convention last week. I bumped into lots of great colleagues and enjoyed hearing Adrian Sargeant, Joe Saxton, Bernard Ross and Glen Fendley give provocative talks at the Growing Philanthropy Summit.
Unfortunately my visit was cut short by being taken ill – huge thanks to all who helped me, especially Amanda Delew – a few days of tests shows it’s nothing too serious and I hope to be back out at events once I’ve got the problem under control.
From the few hours I was there, the comment that stuck with me was this seemingly innocuous remark: “Fundraisers raise £10 billion every year”.
Do fundraisers raise money? Or do donors give money? Most of us see the fundraiser/donor relationship as two sides of the same coin, but recently the Institute has complained of a failure to acknowledge the role that fundraisers play in generating donations. Whether fundraisers raise funds or donors donate, is something I’ve written about in an earlier blog.Having begun my career as a fundraiser, I know that donations have to be inspired and collected as well as given. People are generous, but their altruistic impulses are often nurtured and sustained by the efforts of people working in fundraising departments.
But the philanthropy sector often forgets to acknowledge the role of the fundraising profession because donors so rarely attribute their gifts to any interventions by fundraisers. Donors describe an internal impulse to use their money to do something good. They talk about their passion for a cause, their empathy for beneficiaries and their desire to help. They don’t say “I only gave because s/he told me to”. As Alec Reed, one of the UK’s most loveable philanthropists says, in a case study in the 2009 Million Pound Donor Report, “most people prefer to buy than be sold to – a concept frequently applied in retail but almost unheard of in the charity world”.
I think Sir Alec is absolutely right. A couple of analogies that strike me: we all want double glazing in our homes but no one likes double glazing salesmen; and we’re obsessed with buying and selling houses but despise estate agents. It might be unfair and untrue to write fundraisers out of the picture, but so long as funds are raised does it really matter who gets the credit? It would be wonderful if, at the next Institute of Fundraising convention, it was acknowledged that donations are not just raised, they are given.
Today is my first day back at work after a blissful 8 months of maternity leave. I’ll miss hanging out with little Meredith but am also delighted to be back in the wonderful world of philanthropy.
Towards the end of mat leave, this bliss was slightly punctured by coming across yet another anti-philanthropy rant in my newspaper of choice, the Guardian. Columnist Zoe Williams is not a fan of rich people giving their money away to good causes. She writes that philanthropy ‘appals‘ her and that philanthropists maker her feel ‘queasy‘. But the stand-out phrase for me is when she writes: “I object to high-net-worth philanthropy in principle”. What, all of it? Every instance of someone with resources choosing to use it to help others, rather than to help themselves?
I couldn’t resist firing off this letter to the Editor which also questions her assertion that “inequality is a precondition of this kind of lavish spending”. I think of ‘lavish spending’ as being about buying jewels or a massive yacht, rather than education for poor kids, but maybe that’s just me.
The problem with this sort of column is that regular use of words like ‘unpleasant’, ‘vulgar’ and ‘obscene’ to refer to rich donors, impacts on the decisions of the wealthy about whether, and how much, to give away. As Theresa Lloyd’s study of ‘Why Rich People Give’ shows in these quotes from potential donors:
“Why are the media nasty? They don’t do good news. They are snide and they pander to jealousy. The obituaries of philanthropists are nice but during their lifetime journalists dig. There’s nothing to be done” (Lloyd 2004, p.232)
“Reforming the press is a hopeless cause. We won’t be able to change their negative approach. You need to accept from the outset that whatever you do will be rubbished in newspapers” (p.234)
Many Guardian readers will have enjoyed Williams’ rant, because in the UK many people conflate ‘philanthropist’ and ‘tax dodger’, and make assumptions that all fortunes have dubious origins. Tell that to the recipients of Anita Roddick’s massive charitable legacy, who benefited from the wealth created by her ethically-sourced peppermint foot cream.
First day back at work and I’m already drafting plans for my next research project: ‘How can the UK learn to love philanthropists?’.
I was very sad to read about the untimely death of UK philanthropist Jimi Heselden, in a tragic accident yesterday.
Mr Heselden kindly agreed to appear in a case study in the 2009 Coutts Million Pound Donors report, to talk about his path from poverty to philanthropy.
He had a fascinating story to tell of a man who was born and brought up in a poor suburb of South Leeds (which is also my home city), and who wanted to give something back when he became a successful entrepreneur. He told me, “I feel a very strong connection to those parts of that city. I’m interested in giving other people a chance to get on in life”.
He also said, “when I make a decision, I like to act fast” and was more than true to his word. Within just 4 days of meeting the chief executive of the Leeds Community Foundation, he made an initial donation of £10m, and I’ve read that his total philanthropy has since exceeded £20m.
His case study ended with these words: “What’s most important to me is knowing that so far I’ve been able to help out 61 good projects in parts of Leeds that mean something to me, and knowing that the money I’ve got banked in the Community Foundation means I can carry on giving something back by supporting many more local projects in the future”.
It’s terribly sad that Jimi Heselden won’t be around to see the difference his generosity will make, but his decision to share a big chunk of his wealth will be felt far into the future and the ongoing impact of his philanthropy will hopefully bring some comfort to the loved ones he has left behind.
Good news over the weekend about John Sainsbury’s £25 million gift to the British museum. That is a seriously large donation by UK standards, from a man who has already committed many millions to good causes over the years.
Perhaps unsurprisingly, given the climate of cuts, a common media angle has been to ask whether this type of philanthropy is about replacing or enhancing government spending. Today’s Guardian coverage quotes culture secretary Jeremy Hunt making a rather contradictory statement about the proper role of philanthropic donations. On the one hand Hunt, “insisted the government was not relying on private generosity to fill the gap left by cuts of more than 25% to the culture budget”. Yet in the same breath, “he said he wanted more philanthropists like John Sainsbury, 82, to bankroll institutions.”
No one can blame ministers – and indeed charity chief executives – for hoping that private donors will step up to plug the gaps created by the massive cuts to public spending that are soon to be announced. But the trouble with this hope is that it doesn’t square with how donors view the purpose of their donations. Donors have no interest in plugging gaps. They want their contribution to make something extra happen, something special that wouldn’t otherwise have been possible without their generosity. To end up millions of pounds worse off, only for the thing you fund to be maintained rather than enhanced, is not exactly a tempting offer for potential donors.
This point is further proved by the fact that John Sainsbury hasn’t given £25m to help with running costs. He is funding a new and exciting facility at the British Museum: an exhibition space and conservation centre designed by Lord Rogers. Fundraisers know that donors like to fund innovative and high profile projects that they can feel proud of being associated with. If government has even the vaguest hope that philanthropy is the answer to their prayers then they need to think again about who will pay the utility bills, the staff salaries and all the other expensive annual ‘core costs’ required to keep these organisations going.
In today’s news we learn that Harry Potter author JK Rowling is giving £10 million to the University of Edinburgh to fund a new research clinic investigating Multiple Sclerosis (MS) as well as other degenerative neurological conditions, such as Alzheimer’s, Parkinson’s disease, Huntington’s disease and Motor Neurone Disease.
The clinic is to be named after her mother – The Anne Rowling Regenerative Neurology Clinic – who died from complications relating to MS at the age of 45. Interestingly, JK Rowling herself turns 45 this year, proving yet again that our philanthropic choices are directly linked to our autobiographies. As our recent research on How Donors Choose Charities illustrates, it is donors’ personal experiences, rather than objective assessments of needs, that are the prime drivers of giving and philanthropy in contemporary UK society.
It’s also interesting that this donation has been given to a university rather than to one of the MS charities. Our annual study of charitable donations worth £1m or more, finds that Higher Education Institutions are by far and away the most popular destination for these largest of gifts. Universities receive around 40% of the total value of ‘million pound donations’, a far larger slice of the philanthropic pie than any other type of beneficiary: the arts and culture sector receives just under 30%, international aid and development receive around 13% and no other cause is on the receiving end of more than 10% of the total value of £1m+ gifts.
In the 2009 edition of the report, we quote Joanna Motion from CASE (Council for the Advancement and Support of Education) who explains why universities are so popular amongst the richest donors. She says, “donors see universities as the places where we have the best chance of tackling the big challenges facing society… They are robust, here for the long haul and used to managing large and complex projects”.
It appears that universities have the edge on charities in attracting the biggest donations because donors have more faith that their money will be well managed, well spent and result in meaningful impact. And that’s a magic combination for any type of donor, not just Harry Potter’s creator.
Jane Thomas, the author of the NPC blog post, raises an interesting question about what that finding means for fundraisers. She asks: “Does it mean that fundraisers should be putting more focus on tapping into donors’ personal preferences in their fundraising material, rather than pushing the message on ‘needs’? It ultimately raises the question of whether fundraisers should be looking to change behaviour, (ie, by getting donors to think more about need), or should be catering for existing behaviour (ie, focusing on donor’s passions and personal interests).”
My answer to her question is that it means the latter because the job of the fundraiser is to raise as much money as possible for their cause. Bringing about behavioural change amongst donors – and indeed the wider public – is important, but cannot be the responsibility of those charged with raising the funds to keep the charity going. When I worked as a fundraiser my targets were all financial, not behavioural. I don’t think the charity chief exec would have been overly impressed if I’d said, “sorry not to have raised enough money to cover our outgoings, but you’ll be glad to hear our supporters are thinking much more clearly about need”.
The next research project I’m working on is looking at another dimension of this problem. We’ve been running focus groups with charity users to ask their opinion on whether fundraising literature ought to use the most accurate and authentic images of beneficiaries, or ought to use the images most likely to raise the largest sums of money. On the whole, charity users seem to take a pragmatic approach. A typical comment being: “The money’s the main thing… If the organisations haven’t got their money in the first place to help you then the whole system breaks down… Just get the money, by hook or by crook”.
We’ll be presenting the interim findings of this research at the NCVO/VSSN conference, which takes place on the 6th & 7th September in Leeds. Further info about the conference is online here.
Summers are meant to be quiet times in universities but the pace of my work seems to have increased these past weeks. Two big reports are occupying my waking hours: Firstly, the 2010 edition of the Coutts Million Pound Donor report should be our best yet, not least because we have got more – and more substantial – case studies of those who give and receive donations worth £1m or more. Secondly, I’m working on a a study of university fundraising across all 27 members of the European Union. The deadline is the end of October and as my second baby is due in November, that deadline is pretty immovable!
I’m also still busy disseminating the findings from a recently-completed project on ‘How Donors Choose Charities’. The report is available online here and I wrote the briefest of summaries of the findings in a recent edition of Third Sector magazine – trying to condense over a year’s worth of research into a 300 word article is no mean feat.
I’ll be presenting the research in person on the 7th October at the Institute of Fundraising South East conference, which is being held at the Burford Bridge Hotel near Dorking. Further info and bookings can be made by emailing email@example.com
Last Friday I launched the final report from the first project I’ve been undertaking within the new ESRC Centre for Giving and Philanthropy, How Donors Choose Charities.
Having interviewed 60 committed donors about how they make their giving decisions, I found that most people tend to support organisations that promote their own preferences, help people they feel some affinity with and support causes that relate to their own life experiences. These non-needs-based drivers exist despite widespread beliefs that charities exist primarily to help the needy,
Other key findings include:
- Donors find it difficult to make choices between the vast number of potential beneficiaries; the overwhelming amount of choice makes it impossible to rationally assess all possible alternative destinations for donations
- Donors create their own classifications and ‘mental maps’ to try and cope with the complexity of the charity sector – for example making binary distinctions between ‘animal’ and ‘people’ charities, or automatically excluding certain types of causes
- Donors’ personal backgrounds are a key criteria behind gifts; people draw on their personal and professional experiences and use their ‘philanthropic autobiographies’ to shape their giving decisions
- Donors often base their judgements on how efficiently charities spend their money by evaluating the quantity and quality of direct mail appeals, rather than by accessing information such as annual reports and accounts
- Donors are motivated by a desire to ‘personally make a difference’ and are keen to avoid their donations becoming a substitute for government spending
Given the voluntary nature of charitable activity, it’s not so surprising that giving is more accurately characterised as ‘taste-based’ rather than ‘needs-based’. The freedom to support things that people care most deeply about is what differentiates charitable giving from paying tax. Donors value the control they have over their charitable giving decisions, and expect to distribute their money according to their judgements about what is important and worthwhile.
But the findings do raise a timely question about the extent to which governments can realistically expect donations to replace public spending cuts on charitable activity, as people have far higher hopes for their donations than simply plugging gaps in government spending.
I hope this report is useful to charities and their fundraising staff, and would be happy to hear what you think.
I haven’t blogged in a while as life, work and (finally) summer have got in the way. But I can’t resist writing about today’s news story that proposals are on the table to create financial incentives for organ donors.
It is tragic that so many people die waiting for a transplant, and I entirely support the suggestion that donating become ‘opt-out’ rather than ‘opt-in’, which enables people to retain control over their body parts whilst ensuring that the majority, who are quite happy to see their organs used by someone else after death, are not foiled by having not got round to joining the donor register. But I’m not at all sure about the impact, or effectiveness, of offering inducements to nudge people towards making the decision to donate organs.
I got started studying charitable giving as a result of reading a wonderful book by Richard Titmuss called ‘The Gift Relationship: from human blood to social policy’. Published in 1971, Titmuss compares the blood donor system in the UK, where donors make a ‘free gift’ of their blood, with the system in the US, where donors are paid to donate. He concludes that the UK system produces healthier blood, as people are not incentivised to cheat by making excessive numbers of donations or attempting to sell infected blood. But, perhaps more crucially in the context of those of us trying to encourage charitable giving, he wrote that the importance of a voluntary national blood service lies in the fact that very few opportunities exist in modern, technical, large-scale organised societies for ordinary people to act altruistically outside their own networks of family and friends. He therefore concludes that we must maintain a voluntary, rather than incentivised system for donating blood (and, by extension, for donating organs) because it is important to create and support structures in our society that allow and encourage people to demonstrate generosity to strangers.
The voluntary giving of blood and organs is part of a wider set of norms regarding the exchange of significant gifts between strangers that fundraisers rely upon. We draw upon that tradition every time we ask someone to give away some of their private wealth to support the public good. I do hope that any changes to encourage organ donation do not end up threatening the concept of free gifts in our society.
Having worked as a fundraiser, and now as a philanthropy researcher, I’ve done a fair bit of asking, and an awful lot of thinking about asking. But as I’m not wealthy myself, I’m never on the receiving end of a personal, direct ask. So it’s been fascinating to find myself in the shoes of the asked not just once but twice in recent weeks. And both experiences gave me tiny insights into what it must be like to be courted by causes wanting your cash, and how easy it is to get the asking wrong.
The first experience was a result of mistaken identity. I was visiting a major charity to present some research and my host – a senior member of the fundraising team – very kindly offered to give a me a tour of the building. Presumably this person would usually be giving tours to well-heeled potential donors or senior decision-makers from charitable foundations, so it’s not surprising that her colleagues assumed I had access to big bucks (though my shabby shoes ought to have given me away as a decidedly poorly-heeled academic). Towards the end of the tour I spotted something on the wall that I wanted to ask about, yet suddenly found myself being lectured, at length, about an aspect of their work that she thought I wanted to know about. Time stood still as the long-winded explanation went on and on, and I began to appreciate visiting dignitaries’ ability to feign interest in things they never expressed any desire to know. Suddenly our time was up and I was bustled out of the room, slightly annoyed and no wiser about my unasked question. As I am not a potential mega-donor no harm was done, but I wonder how often we talk at, rather than to, potential donors, and make unwarranted assumptions about what will inspire them.
The second experience concerned an acquaintance who phoned out of the blue and asked me to join a committee to help a cause that she cares passionately about. As it happens I don’t share her interest in this cause, but have often shared what knowledge I have about charities and fundraising with people I know who are committed to things that don’t rock my boat. But the speed at which this ask came and the lack of groundwork in warming me up for an ask – albeit for a contribution of time and knowledge rather than money – was another case study in how not to inspire and motivate a potential donor. What’s worse, I felt terrible for saying no as I felt judged for my lack of interest in the cause.
Being a student of philanthropy is the best job in the world. It’s a subject I find endlessly fascinating and hopefully the findings will do some good at some point. But I’ve always been aware that my life experience is so very far removed from those I try to study. Thanks to an over-enthusiastic staffer and a clumsy request for help, I’ve had a tiny taste of what it must be like to be have something that other people want, and a tiny insight into why the answer might be no.
- they think the cause is important
- they feel good about supporting a particular charity
- they trust the leaders of the charities they support
- they are passionate about making something happen
- they want to be part of a charity they admire
- they enjoy meeting other donors
- they couldn’t live with themselves if they didn’t
So it’s not really about how much money you have or don’t have. Whether rich, poor or even UHNW, it’s about knowing what needs exist, being asked properly to help, believing the donation can make a difference and being able to enhance our own lives at the same time as trying to improve the lot of others.
The philanthropy research centre where I work publishes an annual report on ‘Million Pound Donors’ which collates and analyses data on charitable gifts worth £1m or more. Media coverage (for example in the FT and the Times) tends to focus on how many donors give at this level, and whether the value of these mega-gifts is going up or down. But when I discuss the findings with wealthy donors, it’s not the question of quantities that most interests them. The finding that catches their eye is the one that counts how many organisations are on the receiving end of gifts of this size – they are all amazed to learn how few charities have donors giving at this level.
In both the years that this study has taken place, less than 160 charities were found to be on the receiving end of donations of this size, and the vast majority of these ‘million pound recipients’ received only one 7-figure donation. Of the 159 recipients in 2006/07, 141 only got the one; of the 153 in 2007/08, 133 only got the one. Therefore in each year, only around 20 organisations got more than one donation worth £1m or more.
It may seem unrealistic, even greedy, to expect to have more than one supporter who is willing and able to give at this level. But a large number of charities have fundraising targets that require them to raise many millions of pounds each year. According to the Charity Market Monitor 2009, 8 UK charities raised £100m or more, a further 51 raised more than £50m and a total of 116 charities raised more than £10m. As the vast majority of these organisations have either one or no million pound donors, then these impressive targets are being hit as a result of the collective value of a huge number of smaller sums.
A headline in a recent edition of Civil Society media attests to this fact, as it carries news that the Make-A-Wish Foundation – which raised £4m last year – has received its largest-ever single donation of £702,158. This big donation is great news, yet the ability of charities to raise multi-million pound sums, year on year, in the absence of a major benefactor is surely one of the great, untold stories in UK fundraising. Many more examples abound. I recently met with fundraisers from two well-known charities – both amongst the 50 most popular fundraising charities – neither of which had had a donor giving £1m or more for many years.
Millionaire donors are genuinely – and quite rightly- shocked to learn that they are probably the only person giving at that level to their favourite cause. Knowing for sure they are the charity’s only 7-figure donor is empowering as it gives them permission to approach their friends, who they now know are not concealing a similarly-large donation through modesty. Being honest about the rarity of these gifts is also a powerful tool for retaining support as – assuming the million pound donor is pleased with how their money has been spent- they are more likely to renew once they appreciate the unique significance of their gift.
Yet fundraisers appear reluctant to come clean about the size of their charity’s million pound supporter club. Perhaps they think it’s a sign of weakness to have attracted so few, or implies they cannot cope with donations of this size?
But the gasps of genuine surprise from millionaire donors tells a different story. They’ve been given a false impression that ‘people like them’ keep charities going, and are shocked that the burden of funding good causes is not in fact falling on the wealthiest shoulders. It’s time for fundraisers to swallow their pride and admit that major donors are rarer than four leaf clovers. It could help these exceptional donors to become a little less of an exception.
Have you heard that this year’s beneficiary of the X Factor charity single is an organisation working with parents in prison, and that they were chosen after narrowly edging out competition from a befriending scheme for asylum seekers and a project that provides protection for female sex workers? No, of course you haven’t heard any such thing because it’s not true. This year’s X Factor charity single will raise funds for the Great Ormond Street Hospital (GOSH), the 150 year old London-based children’s hospital that provides world-class care for young patients and their families. GOSH is a great charity, it meets important needs and its successful fundraising is admired by many, including me. But isn’t there something wearily predictable about it being chosen as the beneficiary of this Autumn’s blockbusting celebrity fundraiser? What about other causes in greater need of a boost in funds and raised profile, including those that meet more complicated needs and can’t offer such appealing photo shoots?
Of course, the X Factor is not the only corporate behemoth to pick a less-than challenging recipient for its fundraising efforts. Many organisations look for charity partners that offer a ‘halo effect’ in which their positive connotations are transferred to the company, their staff and customers. But this approach results in the exclusion of many excellent charities from such fundraising opportunities because their ‘face’ does not fit the corporate image, their beneficiaries do not command widespread appeal or they fail to evoke a ‘feel good’ factor.
Particular obstacles lie in the way of charities whose clients are perceived to be in some way responsible for their situation. Research shows that donors tend to favour charities whose beneficiaries are perceived to be disadvantaged for reasons outside their control: the more ‘innocent’ the victim, the stronger our desire to help. So what chance do charities working with prisoners, substance abusers or other ‘unpopular’ causes have, when pitched against fluffy puppies and sick kids in head to head popularity contests?
There are tens of thousands of charities doing good work across the UK, helping all kinds of people and doing great work to support a much wider range of causes beyond the typical focus on ‘kids, kittens and cancer’. Wouldn’t it be nice if Simon Cowell and co recognised they also have the X Factor?
It’s said that becoming rich means never eating another bad meal and never telling another unfunny joke. On the back of my experience this week, at an event with 2,000 fundraisers and a handful of rich philanthropists, I’d suggest it also means never being asked another decent question.
The star turn at this year’s ‘Raising Funds from the Rich’ conference, held in London on the 14th October, was Sir Richard Branson, founder of the Virgin business empire and a man with his thumbs in a lot of philanthropic pies. His current charitable interests range from climate change to health and education in Africa to ‘The Elders’ initiative, which harnesses the moral authority of global statespeople like Nelson Mandela, Kofi Annan and Mary Robinson to intervene in intractable conflicts.
By the time Branson arrived to give his speech, delegates had heard from a range of speakers addressing the central question: How to raise funds from the rich. The advice was pretty consistent and covered the same 3 good points: (1) do your research to identify people who are wealthy enough to give big sums and have an interest in your cause, (2) take your time to build mutually respectful relationships, and (3) don’t make the ask until the donor is engaged with your cause. Unfortunately, this advice was ignored by delegates during the Q&A following Branson’s speech, whose ‘questions’ were almost all variations on the theme of: “Please give my charity some money”.
In answer to the riddle posed at the top of this post: it’s clearly a bad idea to ask a billionaire for a donation when your only qualification for doing so is that you happen to have grabbed the microphone. But reader, they did. Three days later I am still utterly perplexed as to why anyone could have thought it a good idea to make a pitch for funds rather than seize the chance to ask a more searching question about Branson’s philanthropic journey. Wouldn’t it have been interesting to learn what got him started? how he decides what to support? how he decides how much to give? what’s been his biggest philanthropic mistake?
But worse than this missed opportunity is the terrible impression we must have made on a man who has the ability to pump, literally, billions into our sector should he follow the lead of Bill Gates and Warren Buffett by transferring almost all his fortune into philanthropy. We know that one barrier to giving is donors’ fears (however misplaced) that charities lack the nous to spend their money wisely. This fear is especially prevalent amongst businesspeople who suspect our sector of being full of nice-but-ineffective people. I doubt that Branson left that event impressed by what he heard or thinking he’d spent time with people who could be entrusted with his money.
Of course it’s in every fundraiser’s bones to seize opportunities to promote their cause. But I think we also have a responsibility to advance the reputation of the charity sector as a whole. Asking for money in this setting was not just unlikely to succeed, toe-curling to listen to and a missed opportunity to ask decent questions. It may even have spoilt the chance of encouraging Branson to gear up from being a good philanthropist to a great one.
It sounds like a rhetorical – or even facetious – question, but I’ve been thinking recently about the role that fundraisers play in raising funds for good causes. I started my career as a fundraiser and I think it’s a fantastic profession full of dynamic, inspiring and hardworking people who are doing their best, often on minimal budgets, to keep great organisations afloat.But in my current role as a researcher I’ve been interviewing donors about why they choose to support charities, and they rarely mention any interventions by fundraisers. The stories donors tell about what attracted them to a cause and their reasons for sticking with it usually centre on internal impulses – their own passions, concerns, empathy etc – or the urging of loved ones and associates to make a donation.
Yesterday I was reminded of this disparity between the official role of fundraisers as the expediters of donations and donors’ accounts that write fundraisers out of the picture. I went online to make a donation to the emergency response to the recent series of disasters in the Asia Pacific region . At one stage in the donation process I was asked to select from a list of 16 options to conclude the statement ‘I am making this donation because…’. I looked in vain for an option that related to my vague desire to ‘do something’ in response to the scenes of misery filling the TV news. But 12 of the 16 options that appeared in the drop down list were variations on the theme of being asked by a fundraiser (eg. ‘I saw an advert’, ‘I read a leaflet’, ‘I spoke to a fundraiser’) and none of the other 4 options were accurate (I wasn’t memorialising a loved one/celebrating a birthday/participating in a workplace scheme).
It is clearly unfair and untrue to write fundraisers out of the picture, yet this list assumed that funds are only raised as a result of such prompts.
Perhaps it doesn’t matter much; so long as funds are raised who cares who gets the credit? But if we are serious about creating a culture of asking to complement our culture of giving, then I suspect the fundraising profession needs to take two seemingly contrary steps. Firstly, it needs to remind donors that their impulses are often inspired, nurtured and sustained by the efforts of people working in fundraising departments. And secondly, it needs to recognise that people can make a decision to give without having been on the receiving end of any specific appeal.
Hard to believe it is now July. The aspiration to submit my PhD thesis (on ‘More than Money: the social meaning of philanthropy in contemporary UK society’) by 31st July is looking increasingly daunting. So – much as I love being part of the online community discussing philanthropy and charitable giving – I’m going to have to cut out blogging and cut down on tweeting until the ‘big one’ is done.
But I am pleased to use this last (for now) post to share news of a very exciting development in the world of understanding charity and giving. Next March the first edition of a new UK-based academic journal, Voluntary Sector Review, will be published and the the call for papers is now open.
The new journal is an initiative from the friendliest group of academics that I know: the Voluntary Sector Studies Network. When I made my first tentative steps from fundraiser to researcher, the VSSN was a great source of information, contacts and encouragement and the value of membership continues to increase as I settle into my new career.
The academic study of charity and giving in the UK has enjoyed a lot of boosts recently – the launch of two research centres devoted to the Third Sector and to Giving and Philanthropy, the associated job opportunities for researchers wanting to specialise in these fields and a greater number of events and online forums for the exchange and dissemination of ideas (foremost amongst which is also a VSSN initiative – the annual conference, which is being held at the University of Warwick on 7-8 September 2009).
But an academic community needs more than research centres, job openings and meetings – it needs somewhere to publish peer-reviewed work. I really hope there’s a big response to the call for papers and I can’t wait to read the first edition next Spring.
This weekend I found myself having a row with someone I’ve never met, in front of hundreds of people that I don’t know. The row occurred on Twitter with an American who disagreed with my take on some new research about whether or not Brits lie about their charitable giving.
Last Friday, the Chronicle of Philanthropy (@Philanthropy) tweeted a provocative message: ’Almost Half of Britons Have Lied About Giving’. As a Brit, and as someone whose job it is to understand giving, I was personally and professionally compelled to find out more. The story behind the tweet can be found here on the Chronicle website, which itself contains a link to the original story posted here on the Channel 4 website, reporting on the findings of a survey of 2,000 Brits. Here’s the crucial extract that led to the inflammatory headline:
Almost half (47%) confessed they had lied about having change to donate
Ah, the relief of reading the story behind the headline. Half my fellow citizens are not going around pretending to have made donations when they haven’t, they’re just telling white lies when confronted with unprompted ‘asks’, to save the egos of all involved. That’s not deceit, that’s good manners!
I’m a big fan of face-to-face fundraising, it’s a tough and important job and I know it succeeds in recruiting new supporters who don’t respond to other fundraising techniques such as direct mail. But the rise of face-to-face, in addition to ubiquitous street collections, means that many of us are encountering more asks than ever before. We can’t respond to every ask with a donation, but nor do we wish to seem ungenerous to the cause or unkind to the person doing the asking.
Let’s assume my philanthropic preference is for tackling global poverty, that I make regular donations to a few international aid charities and am willing to hear more about charities working in that field. So when I emerge from the tube and walk straight into someone shaking a tin for ‘Save the Pet’ or hoping to sign me up for a direct debit to ‘Ballet for All’, how do I disengage with minimal time and fuss without causing offence to the fundraiser or their cause? Trapped by politeness, I excuse myself with a pragmatic rationale: “Sorry I’ve got no change” or “Sorry I’m in a rush, no time to talk”, and we go our separate ways, with everyone’s ego and sense of purpose in life still intact.
So let’s have no more intemperate headlines about duplicitous Brits. We’re not tight, we’re just well brought up.
Something odd happened after my last blog about my ‘best books’ on philanthropy. An American academic, whose work I admire, criticised my taste for being too sugar-coated. As someone who tends to fly home from philanthropy gatherings in the US feeling like a hard-nosed, cynical European amidst a sea of positive, high 5-ing Yanks, I rather enjoyed the compliment.
But to dispel the saccharine-taste left by my choices, I should point out this fuller Reading List that I maintain for Philanthropy UK, and I’d like to share the fave philanthropy-related books sent in by others in reply to my last blog:
1. Pink Ribbons, Inc.: Breast Cancer and the Politics of Philanthropy, by Samantha King
2. Dead Aid, by Dambisa Moyo
3. The Life You can Save, by Peter Singer
4. The Pollyanna Principles: Reinventing ‘Nonprofit Organisations’ to Create the Future of Our World, by Hildy Gottlieb
5. Sweet Charity? Emergency Food and the End of Entitlement, by Janet Poppendieck
6. What’s Love Got To Do With It? A Critical Look at American Charity, by David Wagner.
My former colleague at Kent University, Sarah Moore, wrote a similar book to King’s called: ‘Ribbon Culture: Charity, Compassion & Public Awareness’, which makes an interesting argument about the efficacy of symbolic acts such as ribbon wearing. I must admit the Singer and Moyo books are in my ‘to read’ pile and I wasn’t aware of Gottlieb and Poppendieck, but they’re now on my ‘to buy’ list.
But I must disagree about the Wagner book. It’s been a number of years since I read it but just a glimpse of the spine on my bookshelf brings back vivid recollections of the negativity contained within. The clue, of course, is in the title: What’s love got to do with it? is unlikely to be answered with a resounding “Lots!” and in the cover image, which is a sea of peanuts (subtle, huh?). Wagner is on a mission to reveal the selfish, guilt-ridden instincts that lie behind apparently innocent, compassionate acts and to prove that philanthropy is a big cover-up for the harshness of America’s free-market capitalism.
I’m a sociologist rather than a psychologist and I don’t pretend to know why people do what they do, but it seems as implausible to argue that philanthropy is entirely cynical and selfish as it is to argue that philanthropy is entirely selfless.
I think the ‘best books’ I chose in my last blog tread the line between these two extremes, acknowledging that one of the most distinctive features of philanthropy is its ability to meet the needs of both donors and recipients. Reductionist approaches that see philanthropy in black in white, the realm of only goodies or baddies, are misleading and harmful.
Ian Wilhelm of the Chronicle of Philanthropy also joined the debate about ‘best books’ and I fully concur with one of his choices – The Foundation: A Great American Secret by Joel Fleishman, which includes a great riposte to the cynics’ position:
“Large-scale charitable giving is not primarily the province of the robber barons racked by personal guilt over their depradations, no matter what amateur psychologists or historians with an anti-capitalist bent might assume”.
Hear hear, from both sides of the Atlantic.
I like being asked my opinion and I like books about philanthropy, so my day was well and truly made when the marvellous Martin Brooks of New Philanthropy Capital asked me to recommend some good books about philanthropy.
I like being asked this question so much that I actually have an online reading list which contains more information than even the pointiest headed of philanthropy wonks could possibly want. So here’s the diluted version of my top 3 essential reads about philanthropy, in ascending order:
3. Peter Frumkin (2006) ‘Strategic Giving: the art and science of philanthropy’. Frumkin sets out the functions of philanthropy and how to go about doing it well. Full review here (though you need to scroll down to the 5th book).
2. Robert Payton & Michael Moody (2008) ‘Understanding Philanthropy: It’s meaning and mission’. This book makes a strong argument that philanthropy is an important and interesting subject that deserves greater attention. Full review here
1. Matthew Bishop & Michael Green (2008) ‘Philanthropcapitalism‘. Despite the misleading title, this book is about so much more than an argument for a certain type of modern philanthropy that the authors have labelled ‘philanthrocapitalism’, it is an excellent review of the whole landscape. If you only read one book, this is the one to go for. Full review here and more on their own website
I reckon anyone reading these 3 books will gain a good understanding of the history and contemporary nature of philanthropy around the world, though if you want to dig deeper beyond UK/US experiences, I’d also suggest Warren Ilchman’s edited volume on ‘Philanthropy in the World’s Traditions’ (1998).
If you decide to take up these suggestions I’d love to know what you think of them, and if you disagree with my picks then do please suggest some alternatives
About 10 years ago I was asked to contribute to a London radio discussion about whether or not people who play the National Lottery should get any say in which charities benefit from lottery money. It was an interesting debate to be part of, because my natural instincts in favour of ‘people power’ conflict with a fear that going down that path would unfavourably affect charities that work with ‘unpopular’ causes and beneficiaries. Who would vote for organisations that work with prisoners or asylum seekers or do research into medical issues that affect only a tiny percentage of people, but are in no less need of lottery funds than more popular causes like animal welfare, children and cancer research? We chewed over the pros and cons of this approach on air, but the wind was already blowing in the direction of public participation.
In the subsequent years, a portion of lottery money has indeed been influenced by public votes, including funds for heritage causes allocated via the TV programme ‘Restoration’ and funds allocated to regional organisations as a result of the ‘Peoples Millions’ scheme, which has so far distributed £18 million.
Another type of fundraising that sometimes uses popularity contests to pick recipients is corporate ‘Charity of the Year’ partnerships. There are 3 reasons this is a sensible approach:
(1) The staff and customers will be asked to get involved in fundraising so it is reasonable that they help to choose the cause that will benefit from their efforts, rather than it being selected by the chairman or a director.
(2) A good ’fit’ is a pre-requisite for success in corporate partnerships; they rely on a natural empathy between the charity and company. Employees and customers are more likely to be enthusiastic and generous to a cause they have chosen.
(3) Voting has benefits for the employer as it can engage staff and enhance customer loyalty, and it has benefits for the short-listed charities who may pick up new supporters during the pitching process, even if they are not ultimately chosen.
But I still have doubts about using democratic procedures to decide which charities get support. What about those excellent organisations that are effectively excluded because their face doesn’t fit the corporate image, their beneficiaries don’t appeal to a majority of the electorate or they fail to evoke a ‘feel good’ factor amongst enough customers? I’ve written more about this in the current edition of Professional Fundraising magazine which you can access here
What do you think? Is it right to introduce democracy into fundraising or is ballot box benevolence fatally flawed?
Yesterday I blogged about the key conclusions of ’Natural Philanthropists’, the new report I’ve written on family business philanthropy. But as someone who started out as a fundraiser, I’m most excited about sharing the section of the report that contains ‘lessons for charities’ seeking support from this sector. Here’s a summary of what we found, for more details do have a look at the full report
1. Family business owners may be more ‘naturally philanthropic’ than non-family owners, but they are busy people, so do check the criteria to avoid a wasted application and ensure your proposition doesn’t make unreasonable expectations on their time.
2. Family businesses respond positively to impressive individuals, they buy into the charity leadership as much as the charity’s mission.
3. Family businesses look for well-run charities that can prove their impact. The ‘ask’ needs to go beyond telling good stories to include evidence that the funds make a difference.
4. Do your research – family business owners have more discretion over philanthropic spending than non-family business, so look for family connections that enhance your appeal.
5. Family businesses often support local sports teams, which combine doing good in the local community with publicity, for example by including company logos on kits; charities should think about ways they can offer similar promotional benefits.
6. Family businesses are predominantly small, and they have a tendency to work with similarly sized charities, preferably those that focus on the community in which the business is located.
7. However, larger family businesses with increasingly globalised business arrangements may contribute to more strategic philanthropic approaches that disburse funds beyond the local community, as such businesses may feel less ‘rooted’ in their local neighbourhood and may feel less of an urge to ‘give something back’ to their community.
8. Much family business decision making is informal – it happens around the kitchen table rather than at board meetings – so personal relationships with significant family members matter more than formal presentations to senior executives.
And finally – the family business owners who contributed to this research were clear that fundraisers should not be pessimistic about the impact of the recession: many family businesses would rather cut dividends than cut their charity budget and will avoid reneging on pledges, not least because of the reputational impact.
One told us: “Despite the current economic climate we will always see giving as a priority, none of the family members would think it was right to do less”
And another said: “I’m not saying our giving is untouchable but I can’t contemplate standing in front of close family members and saying ‘we’ll increase the dividend but we’re going to slash the charitable funds”.
But fundraisers should expect to change their approach during the economic downturn, for example glamorous fundraising dinners are not attractive in this climate. As one owner said:
“The froth will be off, like taking a table at a glitzy, high-profile fundraising dinner that everybody’s got to bid daft prices for daft holidays, we’ll be avoiding those sorts of things”.
In conclusion, seeking support from family businesses involves a slightly different approach to traditional corporate fundraising – it’s more personal and a bit harder to get access to the decision makers. But the defining features of family businesses – values in the workplace and a commitment to stewardship – means that these firms are ‘naturally’ philanthropic and prefer continuity in their philanthropic acts. It may be harder to attract their initial support but the pay-off is a productive, meaningful, long-term relationship.
I’ve just written a report on philanthropy in family businesses, it’s called ‘Natural Philanthropists’ and is free to download here
The report is based on focus groups and interviews with family business owners, and it argues that the unique features of family businesses – especially the presence of family values in the workplace, commitment to long-term stewardship and the necessity to transmit values to the next generation – all help to support a strong philanthropic culture within family firms.
I’ll blog another time about the lessons for charities who want to get support from family businesses and the overall recommendations addressed to government, charities and the family business sector itself. But here are the key conclusions:
1. Family business owners are ‘natural philanthropists’. The presence of family values in the business setting appears to encourage a more responsible or ethical approach to business and creates an environment that encourages philanthropy. In family businesses there’s no distinction between an owner’s ‘real self’ and their ‘work self’, so values don’t get “checked at the door”.
2. Family businesses are largely local heroes. They often tend to have strong roots in local areas and want to be (and be seen to be) a good neighbour. They also have a strong desire to give back to the communities in which their staff, suppliers and customers live, in recognition of the role they played in generating their wealth.
3. Informality is the rule but some degree of formality is the ideal. Philanthropic activity in family businesses tends to be informal and ad hoc, particularly in smaller organisations. But those family businesses that take a more strategic and systematic approach, without letting bureaucracy squeeze out family values, appear to make more effective and impactful contributions.
4. Philanthropy strengthens family businesses and strengthens business families. Not all family members want to play a day-to-day role in the running of the business, but do want to be involved in some way with the family firm. Grant-making and other types of community involvement creates opportunities for family members to engage with non-operational aspects of the business. It also raises morale within the company, helps to recruit and retain the best staff and meets the need of those employees who demand more from the workplace than the pursuit of profit.
5. The following factors can increase the chance of family business philanthropy being an effective and enjoyable experience:
· Being clear about family and business values
· Identifying experienced leadership within the family and the company
· Seeking external advice from philanthropic advisers and intermediaries
· Setting up proportionate governance arrangements
· Involving teenagers, retirees & those not involved in running the business
There’s a lot more information and in this report, so do have a look at the full version here
The newly released figures on charitable giving in the USA during 2008 make very interesting reading. The full press release from Giving USA is available here
Despite the onset of a well-heralded recession, giving only slipped from $314 billion to $307 billion, and the decline is dragged down by larger decreases in corporate and legacy giving – individuals only slipped by 2.7%.
I have long been arguing that there is no reason to assume that philanthropy will be dramatically affected by the economic crisis. Charitable giving is a very complex and personal decision that is not driven solely by how much spare money someone has.
On the whole, people don’t think: “I’ve got money so I can give” or “I’ve got less money so I can’t give”. If the main reason that people made donations was because they could afford to, then every rich person would be a philanthropist, and every fundraiser who met a rich person would walk away with a big cheque. And if there were a direct, straightforward link between having money and making donations then people on low incomes would not be so generous, yet we know that the poorest 10% actually give away more as a percentage of their income than do the richest 10%
So, giving is not just a function of our capacity to give. The fundraisers know it and the research shows it. What a few decades of research into philanthropy shows is that people give:
• because they think the cause is important and their money can make a difference.
• because they feel good about supporting that cause or charity.
• because they care about others and the wider world.
• because they’ve been brought up to believe they have a duty to give something back.
• because they want to be part of a charity that they admire.
• because their family and friends support that charity, so they want to as well.
• because their religion encourages them to give away some of their wealth.
• because they enjoy attending the fundraising events and meeting new and interesting people.
• because they couldn’t live with themselves if they didn’t.
• because in so many different ways – and in different proportions depending on each individual donor – supporting charity enhances their life.
So I’m relieved to see that the Giving USA figures do not show a terrible slump in donations, as many people predicted. And given that UK giving has consistently been less than half of that found in the US (usually below 1% of GDP versus over 2% in the US) let’s hope any decline we have is similarly halved. In fact, given the low starting point for our giving, let’s not assume it has to decline at all.
Just back at work after a lovely break in North Yorkshire. Today I’m on my way to attend an ESRC seminar at Newcastle University on newly emerging roles and relationships between the VCS (voluntary & community sector), communities and the local state. I’m looking forward to hearing the papers and getting my brain back into gear.
But I did get some philanthropic food for thought during my hols. We visited Rievaulx Abbey, a Cistercian monastery founded in 1132 which at its peak housed 650 monks & lay brothers and was one of England’s wealthiest monasteries. The abbey’s income came from philanthropy and from trading: the monks received donations of land from patrons, money from visiting pilgrims and earnt income by mining lead and iron, rearing sheep and selling wool to buyers from all over Europe.
Henry VIII usually gets the blame for closing down these allegedly thriving centres, which also provided some health and welfare services to the local poor population, but in fact by the time of the Dissolution only a handful of monks and brothers were left. From being a thriving and rich community in the mid 12th century, Rievaulx’s fortunes fell dramatically as a result of bad management (debt incurred on building projects), bad luck (the Black Death and sheep scab) and changing social norms (rising individualism and declining attractiveness of monastic life).
The moral of the story? Organisations that rely on philanthropy and volunteering can only continue to exist if they are well-managed, have some luck and chime with the mood of the times. Every organisation that struggles to survive in 2009 will blame the recession, but like the monks blaming Henry VIII, that won’t necessarily be the whole story.
A number of different news outlets are reporting that a group of the most prominent US philanthropists met in secret earlier this month. The meeting was allegedly convened by Bill Gates and Warren Buffet, and attendees are repoted to have included pretty much all the top names in US philanthropy, including Ted Turner (the first billanthropist) George Soros, Oprha Winfrey, Michael Bloomberg and David Rockefeller. According to the Chronicle of Philanthropy, the attendees have collectively given away over $72 billion since 1996.
Everything about this meeting is fascinating for philanthropy-watchers. What ideas did they share? Might it lead to new collaborations? Might it lead to new recession-busting donations? And for UK based philanthropoids, the questions also include – could this happen here? Who’d attend? What would their collective donations amount to?
Perhaps the government’s new Philanthropy Ambassador, Dame Stephanie Shirley, is the woman who could repeat this exercise in the UK? Mind you, the US meeting was kept secret for weeks, wouldn’t it be nice if similar secrets were about to be spilled on this side of the pond?
Just read a nice story on the BBC News website about Northumberland millionaire Brian Burnie’s decision to sell his country pile and give all the proceeds to charity. Describing his decision to divest himself of his biggest asset whilst he and his wife still need a place to live, he says: “We won’t exactly be selling the Big Issue but we will be downsizing.”
Burnie clearly understands the attractions of giving it all away whilst you’re alive rather than waiting ’til you’re dead and doing it in a legacy. He’s right of course, it’s more meaningful to donate whilst you’re still around and it’s more fun – charities can’t be nice to dead donors or show them what difference their support made. (Though as the Chair of the first organisation that I fundraised for pointed out, you rarely get dissatisfied legacy donors!). But perhaps most crucially – and as others have pointed out – a charitable gift made in a legacy is really a gift from the descendants not the donor, who has no further use for that money.
‘Giving whilst living’ is a phrase you hear quite often in the US, but only a few UK donors have spoken openly about doing this, foremost amongst them being David Sainsbury, whose efforts to spend out the entire balance of his Gatsby Foundation have seen him become the UK’s first billanthropist
So well done to Brian Burnie, here’s hoping he inspires other UK donors to follow suit.
Yesterday I got away from campus to visit Save the Children to share some of our latest research and find out what people on the front line of fundraising are thinking about. It was an excellent trip, Save has a very impressive set-up – over 100 fundraisers in a big open plan office, energetic people as far as the eye could see.
The main point of my talk was to share the findings of our first wave of research into Million Pound Donors, which is available online
But it’s impossible to talk about major donor fundraising these days without acknowledging the elephant in the room that is the recession, so I spent a good bit of time debunking some of the more hysterical media headlines about ‘black holes’ in charity income and setting out my opinion that philanthropy can still thrive in a recession. Here’s why I think that:
(1) There’s no straightforward relationship between having wealth and giving it away. As anyone who’s tried to raise funds knows – the capacity to give is not the same thing at all as the desire to give.
(2) People don’t make donations just because they can afford to. If that were true then every rich person would be a philanthropist, and unfortunately, they’re not. Therefore, we make a mistake in assuming that the ups and downs of the wider economy will be directly translated into the ups and downs in giving.
(3) We shouldn’t under-estimate donors’ commitment to the causes they care about. All spending decisions involve prioritising and people can (and often do) choose to cut other things out of their budget before they touch their donations.
(4) There’s a danger in publicly panicking about potential falls in donations because it could become a self-fulfilling prophecy. We know that social norms matter - a lot of time and effort has been spent encouraging the British public that it’s ‘normal’ to give – and now we risk undoing that by giving the impression that everyone else is dropping their giving, so they should too!
Save staff seemed to concur with much of what I said, including the risk of us talking ourselves into a giving recession, and I gather their income is holding up despite the economic crisis. (In fact, I’ve yet to meet a fundraiser who says their voluntary income is collapsing – it’s either stable or projected to rise, in one case as steeply as 30%!)
A lot of people liked the sentiment in my last slide, so I said I’d put it in my blog. It’s from a book by Jerold Panas called Mega Gifts: Who gives them, who gets them?, and it has always inspired me when I’ve been trying to raise funds:
“Mega givers are captivated by the opportunity, the challenge, the magic of being able to do something special, something others may not be in a position to do… There is no such thing as a shortage of major donors. There is only a shortage of great ideas to raise money. A desperate need for visions and dreams”.
Since the Budget announcement that higher rate tax is rising to 50%, those of us who research giving have been bent over calculators trying to work out the implications for donors.
There’s been 2 types of response. Pessimists say, “people will feel poorer and pissed off at paying more tax so will donate less, aggravating any recessionary effect”. Optimists say, “giving just got cheaper – higher tax means higher tax relief, which could counter any recessionary effect.“
So who’s right? In my experience – as both a fundraiser and a researcher – tax issues are not deal-makers or deal-breakers, but they are awfully handy for post-hoc rationalisations. Non-donors often say “I pay enough tax and have nothing to spare”, or “My tax is my donation to the greater good”. Some even blame the tax system for being too complicated:“I’d give more if I understood how the tax reliefs work”.
I used to have no sympathy with that ‘tax breaks are complicated’ view. Under the Gift Aid scheme, so long as you’ve paid enough tax that year, all your donations are eligible for full relief. How complex is that? This proposition was once beautifully illustrated by an animal charity that sent supporters a leaflet showing a basket of 3 kittens that had benefited from their donation. The donor lifted a flap to reveal a 4th kitten which the donor could help simply by signing a Gift Aid form. But post-Budget, the depths of my innumeracy have been revealed and I too have struggled to calculate exactly how many kittens, or parts of kittens, will benefit when tax rates rise by 5 or 10%.
So I turned to the most financially astute person that I know, Professor Gareth Morgan of Sheffield Hallam University, who supplied these calculations and agreed I could share them:
Standard position for a 50% taxpayer - A £1000 net donation is worth £1250 to the charity with basic rate tax reclaimed but £1282 including the gift supplement (until 2011). The gross value of the gift is £1250 and the donor on 50% tax thus get an extra 30% personal relief = £375 (50% – 20%) . So the net cost to donor is £1000 – £375 = £625. So a gift which costs the donor £625 is worth £1282 to the charity – ie. the value to the charity is 205% of what it costs the donor!! Or conversely a donor who wants to fund a major item for a charity only has to sacrifice 48.75% of the final cost – i.e. £1m to the charity can be given at a cost of £487K to the donor.
Gareth concludes: This must be the best charity giving tax break anywhere in the world!
And if those figures didn’t make you dizzy enough, he adds:
If the donor is clobbered by the tax relief on pension contributions being limited to 20%, a donation to charity is much more tax efficient than a pension contribution – this is a completely new phenomenon. Also, however, the a large gift aid donation may have the effect of keeping the donor’s net taxable earnings closer to £150K and hence they may still get better relief on pension contribs than otherwise. Also for donors just over £100K taxable income in the band where the personal allowance is lost (£100K to £112K) the benefits of gift aid are phenominal. The person is effectively on a marginal tax rate of 60% but a decent gift aid donation could keep them out of that.
Is it time to put the calculator back in the drawer and start spreading the good news to donors that pay higher rate tax?
There’s a new twist on the ‘what happens to giving in a recession’ debate, which is usually framed in terms of donations staying constant or declining. (Incidentally, I’ve yet to hear any commentator suggest they’ll go up, though I keep meeting fundraisers whose internal figures include projected increases – some as steep as 30%).
New data from the US suggests that recessionary impacts are not just about quantities but also about style. It makes sense that donors might be less keen on attending glitzy flash-the-cash gala dinners and more keen to write a simple cheque, but the Center on Philanthropy at Indiana University have found a 5-fold increase in anonymous giving, which they attribute to the current economic crisis. Ostentatious giving is clearly not a good look when friends, neighbours, employees and customers are finding it tough to pay the mortgage. But the rise in anonymous gifts has other drivers too. For example, a donor might not want previously favoured charities that have been given the chop to know that s/he still has money to give elsewhere. Or they might have sent their first ever cheque to a cause that is working on the front-line dealing with the fallout of the recession – like a homeless shelter or financial advice centre – and not wish to raise expectations that such a gift will be repeated.
Whatever the reasons behind this trend, it’s a good opportunity to raise the question of whether anonymous giving is a good or a bad thing. I tend to the latter view, partly because (as a former fundraiser) I know that identifiable donors are the backbone of fundraisers’ prospecting work, but more importantly, how can we build a culture of giving without identifiable role models?
After a break away over the Bank Holiday, I’ve been immersed in reading up on social justice philanthropy (SJP). There’s a lot of interest in this topic, but not a lot of agreement on exactly what it means. It’s too early for me to offer any definitive thoughts, but I have been struck by two polemic contributions to this debate:
Some argue that SJP is a contradiction in terms – philanthropy being (in their terms) a by-product of an unjust system or, as one critic defines it, “people getting credit for giving back what their ancestors should never have taken in the first place”.
Others suggest that philanthropy is, by definition, about social justice because it redistributes resources from rich to poor and seeks to promote the public benefit.
Like most things, I suspect the truth lies somewhere in the middle, and I’m looking forward to continuing my education in SJP, and to working out how our research centre can help promote theory and practice in this important area.
I’m just finishing a paper I’m writing with Dr Pamala Wiepking, an expert on charitable giving who works at Vrije University, Amsterdam. Our paper is called ‘Feeling Poor, Acting Stingy’ and is a study of how people’s feelings about money can affect their charitable giving. We had access to a survey that asked people about both their money beliefs and their giving behaviours and we found that people who have insecurities about their wealth – who feel they don’t have enough or are worried about losing what they have – make smaller donations than those who are confident about their money.
I think it’s fascinating that people who have exactly the same amount of wealth can either be relaxed and feel they have enough to spare to give a nice chunk away, or can feel uptight and worried about letting go of any of it. Of course how much money you think you need depends on a lot of factors, like how many dependants you have or the size of regular outgoings like mortgages. But an interesting study called ‘A Bit Rich’, written in 2002 by Laura Edwards and published by IPPR, contains quotes from rich Brits who felt totally strapped for cash and with ‘nothing to spare’. Memorably, one said,
“Wealthy? It’s £50 million and upwards as far as I’m concerned. £50 million is the point at which you don’t have to panic anymore”
And another claimed,
“I think I’d need to have something like £4 million in the bank to feel wealthy”
(both quotes from p.35 of the report, which is free to download)
Our paper concludes that people’s own perceptions of their wealth – however objectively curious – need to be taken into account in fundraising activities, because someone being targeted may not agree they have much to spare.
But we also suggest that under-giving by the rich might be due to a lack of empathy, rather than meanness or financial illiteracy. As Rousseau suggested nearly three centuries ago, the lives of the rich are so far removed from the lives of the poor that they lack any common fount of shared experience:
“Why are kings without pity for their subjects? It is because they count on never being human beings. Why are the rich so harsh to the poor? It is because they do not have fear of becoming poor.”
If accusations of lack of empathy seem harsh, a more sympathetic approach suggests that genuine money anxieties are evenly distributed across the spectrum of wealth. A psychological study of motivation by Dr Terri Apter of Cambridge University found it is not uncommon for even very rich donors to feel anxious each time they give. She writes,
‘Typically there’s the man who has a sinking feeling in his stomach every time he makes a large donation… It’s the split between the reality of being rich now – but still having that self-image or those impulses that a not-rich person has. [They think], “Maybe tomorrow, given the markets and the exchange rates and property prices, this is going to look very stupid.”‘
Given the current economic crisis, perhaps we can sympathise somewhat more convincingly with anxious billionaires, even whilst we use this research to shore up our efforts to encourage them to start, or expand, their philanthropic activities.
Today’s newly published Sunday Times Rich List 2009 is getting lots of press interest for all the wrong reasons. Widespread schadenfreude at the news that the 1,000 members have collectively lost £155 billion in the last year means there’s been no media space left to talk about what really matters: that despite the dramatic falls in wealth, the amount they are giving away continues to rise. To be precise, the 37.5% fall in wealth of the list members was accompanied by an 8% rise in giving.
Now admittedly there’s one methodological glitch in the otherwise admirable Giving List, which is the annual account of the philanthropic activities of our society’s richest members. For some reason, the compilers include pledges as well as donations that have been actually made. So, in 2008, Tom Hunter found himself at 3rd place on the Giving List due to his pledge to give away £1 billion in his lifetime. The figure £1,050,000,000 even appeared in the ‘recent donations’ column of the Giving List table – but that pre credit-crunch pledge means it’ll take an awful lot longer to hit the admirable £1 billion target.
So it seemed reasonable to anticipate the Rich List compilers would have quietly changed tack and not counted pledges anymore, when this one blew up so quickly. But in the new list, there in the no. 2 spot, is Lord Ashcroft, on the basis that he has pledged to leave 80% of his £1.1 billion fortune to charity upon his death. At least Hunter is still planning to give away his billion during his lifetime. Making your biggest financial donation after your death is surely more of a gift from your descendants than one that affects your own lifestyle?
But, without the Giving List we’d know next to nothing about the charitable acts of the wealthiest, so it is still very much three cheers for compiler Alastair McCall. It’s just a shame we’re more interested in luxury lifestyles and falling fortunes than in generous givers.
Today’s Financial Times carries a letter from me , responding to a column they published last weekend, expressing a pessimistic outlook for philanthropy in the recession. So of course I’m momentarily biased. But for as long as I’ve paid attention to these things, I reckon the FT has provided the most extensive and thoughtful coverage of philanthropic issues.
It pains me to say that, because I’m a Guardian girl myself, but my favourite paper lets me down in this respect. They either assume philanthropy is a necessary evil due to an under-funded welfare state or is a plaything of ego-centric millionaires, both views being regularly espoused by star columnist Polly Toynbee. Indeed, in her book ‘Unjust Rewards’ (co-written with David Walker) philanthropy is described as ‘mere ostentation’, ‘a passport to the in-crowd’ and ‘another way of exerting power and control’.
The most jaw-dropping example of negative media coverage also appeared in the Guardian, courtesy of columnist Michelle Hanson who responded to the news that Bill Gates had committed over $30 billion to tackle global health problems, by writing on 28/11/06:
“Bill Gates is giving millions to charity. So? Why not? What else could he possibly do with all his money except coat himself in treacle and roll in banknotes?”
One of the reasons I’m drawn to studying philanthropy is because of this gulf between public opinion and donors’ own account of their actions. In essence, it seems that, whilst philanthropists tend to emphasise the altruistic, selfless and public nature of their acts, the media tend to emphasise the egoistic, self-serving and private benefits of their acts.
But this weekend – which brings news that David Sainsbury is the first Brit to donate £1 billion to good causes – wouldn’t it be nice if both the left-wing and right-wing press could focus on the positives, that people are willing to use their private wealth to fund public goods, and leave the negative stereotypes behind for once?
Inevitably – it being the day after the Budget – we’re now fielding calls from journalists asking what difference it all makes to donors. One common question is: “will the new 50% tax rate attract or deter rich people from making donations?”.
The reason it could be construed as attractive is because all donations are eligible for tax relief, so the more tax you pay the ‘cheaper’ it becomes to give. A non-tax payer has to spend £1 to give £1, a standard rate payer only needs to give 80p for their chosen charity to receive £1 (the donation + the 20% tax relief), and the new highest rate tax payers will only have to pay 50p to give £1. In effect, the public purse will match-fund the donations of the richest.
The reason it could be construed as a deterrent is that someone paying 50p in the pound on tax, may feel they’ve contributed enough to the common good and be less willing to consider giving away a portion of what they have left.
The research says that neither outcome is inevitable, because tax relief is not a particularly significant factor in people’s decision to give, though it can affect how much they give. Hearing that it is now 5% cheaper to make a donation, will not turn a scrooge into Mother Theresa overnight. But when donors understand the tax breaks that are on offer, it can encourage them to raise the value of their gift. Someone planning to donate a few hundred thousand pounds might be tempted to go as high as £500k once they understand it could turn into £1m with a flick of the chancellor’s wand.
But the key finding from the research is that people give in order to make something that they think is important happen, to get satisfaction and enjoyment, to bring meaning and significance to their life, and to create a lasting impact and legacy that they and their loved ones can be proud of. So any fundraiser thinking that 5% here or there is going to suddenly attract or repel hordes of donors is probably mistaken – but offering a vision that is 5% more exciting, or promising 5% better outcomes, might well do the trick.
One of the projects I’m doing for the new ESRC Centre for Charitable Giving and Philanthropy involves interviewing donors about how they select charities to support. Even though I don’t ask any questions about the fundraising techniques they encounter, almost every interviewee makes unprompted complaints about the methods that charities use in their appeals. Top amongst the grumbles is the use of ‘free gifts’ to prompt donations – you know the kind of thing: a pen, a set of peronalised address lables, even big freebies like umbrellas get sent out to potential donors.
So I was intrigued to read a defence of this technique, in the latest newsletter produced by the direct fundraising company csdm. You have to sign up for their newsletter (FR Strategy at www.csdm.co.uk) to read the article, but in essence it reports that the principle of reciprocity (giving-taking-giving back) remains a powerful force that can be harnessed to increase response rates. Anthropologists have long documented gift giving processes in non-Western societies – the exchange of shells, beads, cattle etc being a kind of currency to conduct economic and social relationships. And some sociologists argue that gift-giving propels life in Western societies too. Witness the power of being bought a drink in a pub – social norms make it almost impossible to head home without returning the gesture. And the nature of the tit-for-tat exchange takes no account of the monetary value, what matters is standing your round, not whether the coke someone bought you costs less than the G&T they ask for in return.
csdm reckon that gift enclosures can raise response rates by 100-200%, which is quite a claim. As I blogged on 21 April:
I wonder if there’s any way of factoring in the negative affect on those who are put off by such methods, and really object to receiving gifts from charities who, they feel, should be spending their money on the beneficiaries not on prospective donors?
Media coverage of philanthropy matters because it sends a message that the topic is important and worthy of national debate. The Financial Times has long been one of the best papers to cover philanthropy, and last Saturday they had a piece cheerfully entitled: ‘Even in a recession, giving can go up as well as down’:
But the piece goes on to describe 3 different types of motivation: ‘pure altruism’, social pressure and those who do it to feel good and get a ‘warm glow’ – and argues that only altruistic givers will increase their donations during a recession. Despite the cheery headline, it gloomily concludes, “All the economists I spoke to were pessimistic about the outlook for charitable giving in a recession”.
Glad as I was to see the piece in print, it seems to me the FT focuses on individual donor motivations at the expense of recognising other significant factors, especially the norms that we hold as a society about giving. Since the year 2000, a huge amount of effort and public money has been spent on building a ‘culture of giving’ in the UK. The central thrust of government policy is encouraging people to think of supporting charity as a perfectly normal, even obligatory, part of life, as it is in the USA. Living in a society in which giving is “what everyone does” and is a simple, routine habit, can counter-balance, or even outweigh individual motivations.
But the opposite is also true – a society that’s pessimistic about the outlook for charitable giving and insists that donations will inevitably decline risks promote the opposite norm: “everyone else is cutting their donations, so I will too”.
As I’ve said before, the current economic situation is clearly dire, but publicly panicking risks creating a self-fulfilling prophecy and even talking ourselves into a giving recession.
Of course charities worry about not having the resources they need to do their good work. But the research shows that there isn’t a straightforward relationship between economic conditions and the amount of philanthropic spending that takes place. People don’t make donations just because they can afford to do so; if they did then every rich person would be a philanthropist, and unfortunately they’re not!
Contrary to the reductionist approach taken by many economists, as depicted in the FT, philanthropy is not simply a financial transaction. It is first and foremost a social act that enables individuals to create and communicate a positive identity, whilst meeting their own need to live a successful, significant and meaningful life that is affirmed by others.
Despite the tough times we are in, people still have a need to look good, feel good and do good, so there is no reason to assume that the new age of philanthropy will not persist.
I worked as an in-house fundraiser before moving into researching giving, so never had much to do with fundraising agencies, though I was aware of the big names and gurus that populate that world. One agency I just can’t seem to avoid these days is Bluefrog – good name, sticks in the memory – and they also seem to have a very energetic staff team who pop up everywhere.
This morning I read a blog by one Bluefrogger (http://parkeslife.blogspot.com/2009/04/from-1-pack-to-25m-legacy.html) advocating for ‘poundpacks’ – the device whereby a charity requests a tiny donation, eg £1, and then encourages the toe-dipping donor to plunge right in. Two amazing examples are given, where poundland donors left a £2.5m legacy and a £0.5m legacy, despite no other interaction with the charity between these mini and major gifts.
I’m currently doing telephone interviews with committed donors about how they choose which charities to support. Almost every interviewee makes unprompted comments on charity fundraising techniques – donors clearly worry about overheads and ‘waste’, but they also question the honesty of appeals that say “give us £2 to save the X”, and then when they respond to what sounds like an altruistic bargain, they get an immediate follow-up letter or call saying, “actually we need a lot more than £2, and on a regular basis, and can you please leave us your earthly belongings too”.
Perhaps my interviewees are atypical, and clearly they are not aware that the techniques are tested and (hopefully) cost-effective. But – as cleverer people than me have pointed out before – even a 12% response rate to an appeal means that 88% of people rejected the request, and we have no way of knowing what underlying harm is being done both by the normalisation of rejecting requests for help and to the general trust in charities when we keep shifting the goal posts for those that do respond: “Did I say give us a quid? Sorry, I meant to say a million”.
If sneak previews of the forthcoming Sunday Times Rich list are to be believed, this coming Sunday will confirm that (Lord) David Sainsbury has become the first Brit to give away a billion pounds to charity.
Ted Turner started the billanthropy ball rollling in 1997, when he pledged $1 billion to support the United Nations. Since then, the US has seen a number of billion dollar donors, notably Bill Gates and Warren Buffet who each committed over $30 billion to the mammoth Bill & Melinda Gates Foundation. So why has it taken this long for a Brit to join the billanthropy club?
It’s true that a million pounds sterling still goes a bit further than a million dollars, but once you reach this level of giving, it does seem that the idea of ‘a million’ or ‘a billion’ has a cultural significance of it’s own, that defies exchange rates. There’s some sort of resonance involved in giving those sums that £990,000 or $990,000,000 just don’t have.
This is why we decided to launch our research centre with a study of Million Pound Donors, collating and analysing data on every UK donation worth £1 million or more. That report is still available at http://www.kent.ac.uk/sspssr/cphsj/research/couttsmilliondonor.html
In the charity sector people easily understand why we picked £1m as the figure on which to base our study, but in academic circles we risk being accused of picking an arbitrary figure – “what’s the methodological defence for excluding donations of £999k and including those of £1m and 1p?”. This is a good example of ivory tower-itis (every fundraiser knows the difference between a big donor and a million pound donor), but we do have an argument up our sleeve. We are replicating the very successful ‘Million Dollar Donor’ list run by Indiana University in the US for many years. Building on established research is, apparently, more ok than building on fundraising common sense. But mention of the million dollar list reminds us that in the year covered by our first report (2006/07), when we found 193 donations worth £1m or in the UK, our colleagues in Indiana found thousands of $1m+ donations.
So we should definitely cheer the news that UK philanthropy has it’s first member of the billanthropy club, but we shouldn’t expect anyone across the pond to be especially impressed.
Made the wrong meteorological call today. As wind and rain constitute no excuse for cancelling a promised beach trip to a toddler, I waved off husband and child and settled down to catch up on some work – only for the sun to pop out minutes later and shine with continued brilliance over north Kent all afternoon.
The only bright spot I’ve enjoyed is an email from the director of Philanthropy UK, Susan Mackenzie, who sends this link to the China Philanthropy blog http://chinaphilanthropy.typepad.com/ which suggest we’re living in a ‘Chicken Little society’ that is over-egging the scale of the recessionary impact on philanthropy and charitable giving.
Citing research that first appeared in Philanthropy UK’s bi-weekly news bulletin, it notes the lack of empirical evidence for media headlines that suggest the sky is about to fall in. Indeed, one survey cited (the Skoll World Forum Quick Survey on Delegate Economic Outlook) found that only 5.3% of respondents reported feeling “vulnerable” , and 63.2% said they were “able to adapt to the downturn” .
I edit the publications section of the Philanthropy UK newsletter, and am happy to spread the word that you can subscribe for free to both the quarterly newsletter and bi-weekly newsletter at http://www.philanthropyuk.org
The China Philanthropy blog also has a post dated 14 April (‘Grrr – Giving in a Bear Market’) which makes a good point about the downturn having a more worrying effect in societies that have a much younger philanthropic market than that found in the US and the UK, where most of the research on any ‘recessionary effect’ is taking place. As they say,
“For nascent philanthropic markets like China, the effect of the downturn could significantly stilt the forward movement of NGOs already short on resources. Continued support from international and local philanthropists is imperative for the health of these organizations”.
A timely reminder for those of us working to strengthen and support the philanthropic sector to remember that our sector is global, and to bear in mind the impact of current events beyond our own doorstep.
Delighted that the Radio Devon discussion was more balanced than much media reporting of the effect of the recession on giving. The host, Pippa Quelch, gave fair airtime to both the doom ‘n’ gloom charities and the more measured approach that says, let’s not panic but keep fundraising hard and creatively. I argued strongly that we shouldn’t under-estimate donors’ commitment to their favoured causes, and that it’s a mistake to assume they’ll drop their donations before making other adjustments to their household spending.
The representative from the RSPCA was generous in her concern for the less well-known animal charities, who lack the brand recognition that her charity enjoys and – she felt -would suffer even more in a recession. But in my research I speak to many donors who prefer the smaller, local causes where they know the people involved and can see for themselves what good they’re doing. Some make a conscious decision to boycott the big brands because they assume they are particularly wasteful in terms of overheads or simply don’t need their money. So perhaps increasing goodwill towards local charitable organisations can help them keep afloat during these difficult times.
Just had a call from BBC Radio Devon asking me to join a live discussion tomorrow morning about the effect of the recession on animal charities. The famous Donkey Sanctuary is based in Devon, it employs a lot of people and brings in tourists, so it’s undoubtedly a big issue in that area.
I’ve spoken and written quite often recently about the need for charities to avoid publicly panicking, as we risk talking ourselves into a giving recession. There’s no reason to assume that donations will be the first thing to be cut when times get tough, but that becomes more likely if the sector unintentionally sends out a message that it’s perfectly normal to do so. Norms really matter in giving: we’ve spent years trying to build a ‘culture of giving’ in the UK and we risk undoing it in a matter of weeks, with careless talk of donations falling off a cliff and financial black holes in charity budgets.
Anyway, back to the animals. Earlier this week I saw some new data from the US, based on 36 million donations made to 75 of the country’s biggest charities . Interestingly the research (conducted by Target Analytics the research division of software company Blackbaud) showed that individual giving has been in decline since 2005, ie well before the current economic turmoil began. It also finds that two types of charity have bucked the trend: international relief organisations and animal welfare charities. Last year, animal charities in the US reported an increase of 3.1% in their donor base and a 5.1% increase in contributions.
Apparently the debate on Radio Devon will feature the RSPCA, the Donkey Sanctuary and a small animal shelter all describing a double whammy of increased demand and falling donations. Then it’s my job to explain that the research doesn’t necessarily fit that picture. If I’m feeling brave I’ll also make the point that brinkmanship can be a successful tool in fundraising – “if you don’t donate, we might have to close”. As a new report from NCVO and the University of Southampton shows, ‘crying wolf’ is a risky tactic. This study, written by Karl Wilding and Professor John Mohan, concludes that charitable giving remains generally constant, despite occasional economic downturns, because the underlying picture is one of long-term stability, even if there is some short-term turbulence: http://www.historyandpolicy.org/papers/policy-paper-85.html
To mark the launch of the Kent Philanthropy Centre blog, the White House has revealed details of Barack Obama’s charitable giving http://www.whitehouse.gov/blog/09/04/15/Release-of-the-President-and-Vice-Presidents-Tax-Returns/
In the last tax year, when the Obamas’ joint income was $2.7m, the president gave away $172,050. At 6.5% of his income, that’s far higher than the average American donor, who gives about 2% of their income, and nearly ten times as high as the average UK donor, who gives nearer 0.7% of their income.
But philanthropy is not just a numbers game. The spotlight on presidential giving may explain the higher amounts involved, but just like Joe & Josie Donor, Barack Obama has to pick which causes to support out of the more than a million charitable organisations in the US that would love to receive his endorsement. It turns out that 37 lucky charities won the president’s greenbacks as well as his backing. His two biggest gifts, of $25,000 each, went to global humanitarian agency CARE and to the United College Negro Fund. Interesting to see that this prominent US donor fits the pattern we identified in our ‘Million Pound Donors Report’, available at http://www.kent.ac.uk/sspssr/cphsj/research/couttsmilliondonor.html where we found that the richest givers and major donors prefer giving to higher education and international development, as well as to health causes and their own foundations. Obama’s choice of causes that bear upon his own life experience is also typical, as philanthropy research shows that (contrary to popular assumption) giving is led more by donor interests than by beneficiary needs.
Wouldn’t it be nice to know if our own political leaders fit the profile of major givers? Any chance that No.10 will tell us how much Gordon Brown gives and to which causes? I’m sure 166,000 UK charities would like to know if they receive his personal backing, as well as his regular warm words of support.