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Cath Dovey

Beacon Impact Forum: Convening charities, government, the private sector and the philanthropy sector to grow giving and charities

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An image of participants at the Beacon Forum sitting talking at tables in the Guildhall in London

On 29 February, The Beacon Collaborative hosted the fourth Beacon Philanthropy & Impact Forum at the Guildhall in London. The invite-only event brought together 251 participants from across the philanthropy and impact communities and included philanthropists, impact investors, sector leaders, charity leaders, policy makers, academics, think tanks, regulators and media.

The purpose of the day was to bring together cross-disciplinary expertise to answer the question: What will it take to grow giving and impact in the UK?

During the day, attendees heard presentations and panel discussions from:

  • The Rt Hon Stuart Andrew MP — Parliamentary Under Secretary of State for Sport, Gambling and Civil Society
  • Thangam Debbonaire MP — Shadow Secretary of State for Digital, Culture, Media and Sport in the United Kingdom
  • Sacha Sadan — Director of ESG at the Financial Conduct Authority
  • Rory Brooks CBE — Philanthropist and trustee at The Charity Commission
  • James Broderick — Chair of the Impact Investing Institute
  • Ajaz Ahmed — Philanthropist, Ajaz.org
  • Patricia Hamzahee — Advisor, impact investor and philanthropist
  • Zaki Cooper — Founder of Integra Group
  • Jeremy Rogers — Manager of the Schroder BSC Social Impact Trust and Chief Investment Officer at Big Society Capital
  • Giles Shilson — Chair of City Bridge Foundation
  • Cath Dovey CBE — Co-founder of The Beacon Collaborative

Participants also took part in 60 lively roundtable discussions during which they swapped experiences, insights and wisdom as they tried to examine how we can break down the silos between the impact community and financial community.

Key themes captured

During the roundtables, the points of discussion were captured and the key findings extracted and formulated into the following themes:

  • Nurturing and supporting generosity and social impact requires long-term investment and would benefit from a national strategy for philanthropy
  • We need to continue building tools to support personalised philanthropy strategies
  • Sustainable investment strategies are moving from ESG towards impact investment, but more will be needed from policy makers and regulators

  • The challenge of effective impact measurement is nuanced with different needs and motivations in the philanthropy and impact investment sectors.


Each of these themes have been expanded and can be found in the Beacon Forum summary document.

The document summarises the themes that emerged from our keynote speakers and panel discussions and includes comprehensive notes, insights, quotes and questions collated from the roundtable discussions.

As a summary of key current issues, we hope it will be helpful to inform your ongoing work.

Download the Forum summary document

 

Perspectives and input were so valuable

This year’s Forum was an inspiring day that saw a rich exchange of ideas, dynamic discussions, valuable networking and potential future collaborations from experienced leaders from across the impact community.

We would like to thank all participants for their insightful contributions and range of perspectives and ideas. These will be valuable as we continue working towards advancing the philanthropy and impact agenda.

Thank you

The Forum could not have happened without our volunteer facilitators, note-takers and our wonderfully generous sponsors, supporters and partners:

  • Schroders
  • Barclays Private Bank
  • Redington
  • City Bridge Foundation
  • Charities Aid Foundation
  • Owen James Events

We’re making good progress — but what should come next?

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In March 2024, at the Beacon Philanthropy and Impact Forum, Cath Dovey gave a summary of the key learnings from Beacon’s five-year programme.

Cath Dovey stands at a lectern in front of screen showing a graph about growing philanthropy

I am often asked two questions. One: why do I focus my time on philanthropy? And two: what will it take to grow giving?

The answer to ‘Why philanthropy?’ is simple.

Philanthropy drives social innovation, environmental innovation and sustainable innovation. But its purest intention is to find ways of making the world a better place by supporting those who can drive change.

On the second question, ‘What will it take to grow giving?, I have spent six years looking for answers. And it boils down to one idea, if we want to grow giving, then we need proper systems in place to engage, enable and encourage those with financial resources to give and give well.

We are all part of that system and we can all improve it.

The Beacon Collaborative was set up to begin that process of change.

Our hypothesis was a simple one: that philanthropy would grow if we had a better system supporting it. And that if donors are properly engaged and enabled in their giving journeys then we would see philanthropy increase over time. 

Our 25 activities were intentionally catalytic – delivered with the organisations already active in the philanthropy ecosystem, and aimed at accelerating the development of philanthropy in the UK. This year, we have completed that plan. 

Philanthropy drives social innovation, environmental innovation and sustainable innovation. But its purest intention is to find ways of making the world a better place by supporting those who can drive change.

Here are just a few examples of the remarkable progress we’ve made over the last five years.

A few years ago conversations in the sector identified the key activities and priorities that could transform our landscape for giving.

Appointing a Philanthropy Champion within government

Government is an essential partner in growing  philanthropy. The sector can do a lot, but it cannot influence the national conversation alone, nor can it change our culture of generosity without a strong partnership with government.

There are practical reasons for this: policy and regulatory changes are needed to smooth the path for philanthropy. Many of these changes are minor: a change in tone, a change in emphasis, a tweak here and a nudge there.

With intentional support from government to overcome the points of friction in the system, our sector can stop finding workarounds and start focusing on delivering scalable growth.

Political support will also raise philanthropy up the national agenda, and with that will come greater awareness and media interest – moving philanthropy out of the fringes (where stories are either feel-good or focus on failure) and bring it closer to the mainstream where awareness can grow.

And there are governance reasons that we need political support. If philanthropy is going to have a legitimate place in civil society, then its role and accountability need to be considered and managed at a policy level. Individual donors cannot be left to justify the legitimacy of their contributions.

In simple terms, if we want to change our culture of philanthropy, then we need support from the top.

Engage the FCA to mandate training on philanthropy and impact for wealth advisers

Decisions about giving or investing for impact are fundamentally financial in nature. Individuals who are making those decisions need to know what they can afford to give within the context of their wider commitments and liabilities. And they need support to get their money where it can do most good.

These are wealth decisions, and are set within the context of an individual or a family’s values and objectives. If wealth advisers cannot talk to their clients about their social and environmental impact goals, then they are not fully meeting the wealth needs of their clients.

The issue here is that wealth advice is a highly regulated activity – so much so that wealth management firms will not go beyond the guard-rails of what the regulations say. And so, if philanthropy is not squarely on the regulatory agenda, then it is not on the agenda of boards and management teams sitting in wealth management firms.

So we need, at the very least, a training regime that puts philanthropy and impact on the regulatory agenda. Firms need to be confident that their advisers are trained to provide this kind of advice, and that it is sanctioned by the regulators, and advisers need to feel confident to start these conversations with their clients.

The regulations are starting to move in this direction with the new Sustainability Disclosure Requirements regime.

Encourage government to support match funding and blended finance

Once advisers can engage donors in conversation on philanthropy and impact, the next question is: what are they going to do with their money? What needs to happen to get it where it is needed most?

The remaining two actions address this challenge. I’ll start with match funding and blended finance. These are mechanisms that collectivise funding to meet a clear and targeted need.

In the case of match funding, the offer of a match from government, or other funders, provides a powerful incentive to bring smaller donors together around an identified need.  If your £5,000 is matched to make £10,000 then smaller donors can start to feel they are making a difference.

If that donation can go to a pre-screened, specific charity that is part of a wider programme, then the  individual donor is not only directly engaged, they are confidently engaged in contributing to larger purpose.

There have already been a number of match funding partnerships between government, philanthropy and civil society  – I am thinking particularly of those that were run during Covid.

The next step is to bring these to the widest possible donor base and on a much more consistent basis. As a sector we have been building our collective knowledge, capacity and experience through a number of thematic match funds.

I am thinking of:

  • The Environmental Funders Network pioneering the Green Match Fund, which has raised a total of £9 million across three years.
  • The Childhood Trust has raised £8.2 million over two years through the Big Give powering 100 charities in London to fight child poverty.
  • The Women and Girls Match Fund, thanks to support from the DCMS Tampon Tax fund, achieved a total of £4.1 million which went to 162 women’s charities across the UK.
  • And, the first Arts for Impact Match Fund which goes live in March 2024 with a target of £2.5 million.

These specific match-funding programmes have raised about £20 million over the last three years and will be scaled again this year thanks to an increasing number of philanthropists and funders realising the value of these collective opportunities.

They have connected charities with new supporters, including corporate funders, trusts and foundations, major donors and the general public by providing an easy way to take positive action on specific issues.

Building on this experience, we are ready, as a sector, to run more of these programmes. Partnership with government would not only offer the opportunity to build greater scale, but also to align programmes in a more targeted way against national needs.

Building better data measures on philanthropy

Better data about all aspects of philanthropy and the charity sector will be essential for growing giving and getting that money where it is needed most.

In Beacon’s programme of activity, we focused on one aspect of the larger data conundrum. We sought to answer the question: how much philanthropy is taking place in the UK today?

I was privileged last year to work with Cathy Pharoah, from Bayes Business School and Tom McKenzie from Cologne International Business School, and a working group of experts on philanthropy, economics and data. We took the first steps into this challenge.

We built a test model using extensive survey data that suggests at least
£7.8 billion was given by high-net-worths in 2022 – a new insight into how much the UK’s wealthy are contributing to good causes

Why is this important?

Because if we are serious about growing giving, we need to know how much is given now, and by whom, and the potential for growth. Only with that information can we put the right resources behind the growth effort.

£7.8 billion is a significant contribution. Putting it into context, it is £1.2 billion more than the total income of health charities last year.

It suggests many of the rich are pulling their weight. Let’s celebrate their contribution so that we can encourage others to get started.

We are not stepping out, but we going to step back a little to make sure our future programme of work remains additive to the wider sector. What kind of organisation Beacon needs to be to sustain the progress we have made?

Beacon going forward

Beacon’s work over the last five years has brought different parts of the philanthropy sector together to get under the skin of these challenges and to try to find sector-based solutions.

We launched in 2019 with a workplan and two promises: we would catalyse change and we would be time-limited in our activity. The completion of our workplan this year means we have now completed that original mandate.

So the question we have been asking ourselves at Beacon is, what next?

From next month, we are going to reduce our external activity in order to take stock.

We are going to look at what has changed in the sector, revisit our mission and re-examine what are the critical things that need to be done to drive the next phase growth and development in philanthropy.

But we cannot do this in isolation.

So from April we will be reaching out widely to the philanthropy sector to get their views on how the sector has evolved and where it still has development and capacity gaps that could be usefully filled by Beacon.

We are not stepping out, but we going to step back a little to make sure our future programme of work remains additive to the wider sector. What kind of organisation Beacon needs to be to sustain the progress we have made?

Inevitably, while we go through this exercise it will mean less external activity.

So, as Beacon moves into our new phase, I’d like to thank all those who have supported our mission to grow philanthropy and impact so far. Our funders, our partners, our boards and councils, colleagues and the wider sector.

It has been an incredible journey over the last five years, and I can’t think of a more rewarding experience than working to shape the vision for this sector to drive the future of impact in the UK.

Thank you to everyone who has given their time and support over the last five years to help drive the change and the growth we have seen in our sector. It is testimony to your work that there are now strong foundations to build on.

Scoping the high net worth philanthropy market

Author(s)

Cathy Pharoah, Cath Dovey, Tom McKenzie, Vivek Thaker

Year

2023

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Cath Dovey CBE

Cath Dovey

Co-founder, The Beacon Collaborative

Formerly a co-founder of Scorpio Partnership, the global wealth management strategy and research firm, Cath led the firm’s high-net-worth and strategy research capabilities for two decades. In the field of philanthropy, she headed Scorpio Partnership’s global research work with major donors, family givers and family foundations. Cath chairs Rosa, the UK fund for women and girls, and is a trustee of Philanthropy Impact.

Beacon co-founder Cath Dovey awarded a CBE in New Year Honours List 2024

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We are delighted that Beacon Collaborative co-founder Cath Dovey has been awarded a CBE for services to philanthropy, women and girls, the arts and the economy, in this year’s New Years Honours List.

Here Cath writes about the motivations that have guided and shaped her career.

Cath Dovey CBE

I am honoured to have been awarded a CBE in the Kings New Year Honours List for services to philanthropy, women and girls, the arts and the economy.

Throughout my life I have been motivated by issues of equality, knowing how fortunate I was in my own early years and believing the pathway to progress comes from harnessing the talents and resources of all in service of the common good.

For more than 20 years, I co-founded and built an international strategy consultancy focused on the issues of responsible wealth management, ensuring the voices and values of individuals were heard by the financial and professional services community.

As thought leaders with a global reach, our work highlighted that stewarding wealth with purpose, not privilege, was the principal goal for those who had made or inherited fortunes that exceeded societal norms.

A special opportunity to support the common good

Moving from entrepreneurship to social entrepreneurship, since 2016 I have been working to grow philanthropy and impact-led activity among the UK’s wealthy population by ensuring donors and social investors are fully supported on their impact journeys.

As a former chair and serving trustee of Philanthropy Impact, and as co-founder of the Beacon Collaborative, much of my works focuses on building the UK’s capacity to connect individual wealth with communities, and with social and environmental need.

Philanthropy is a unique form of capital that can work alongside the public and private sector to support and enable civil society.

Community groups, arts and culture venues, charities, educational establishments, health and welfare organisations: this is civil society, the beating heart of our communities. It supports those who are unwell or overlooked and creates common ground where we can live, learn and laugh together.

With purpose and humility, those with financial means have a special opportunity to support this common good.

Pursuing equality for women and girls

I have been honoured to serve as the chair of Rosa for the last six years. The UK’s fund for women and girls works to ensure women and girls can live lives that are safe, healthy and equal.

All steps toward gender equality over the last two hundred years have been achieved by women who have fought for, won and sustained progress through collective effort.

The UK needs specialist women’s organisations, yet there remains a persistent lack of funding for women’s and girls’ rights – particularly for those from black and minoritised communities.

Rosa works to redress these imbalances by drawing in and distributing funds to women’s and girls’ organisations, and supporting them to raise their voices in pursuit of equality.

Charities show such resilience in a challenging climate

It is also my privilege to serve as a trustee of First Star UK, which seeks to improve the lives of looked-after young people by ensuring they have the academic, life skills and adult support to transition successfully to higher education and adulthood.

As a trustee of frontline charities and of those working to build the capacity to drive change, I have witnessed the extraordinary challenges faced by the charity sector in the current economic climate.

I am humbled by the skill, care and resilience of the professionals in each of these organisations. I would like to express my gratitude to them for their commitment to the individuals and communities they serve.

It is wonderful to be recognised in this way, but I feel incredibly lucky and proud to work alongside many talented professionals who are committed to social change.

Foundation Practice Rating: philanthropy and public accountability

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When donors transfer money or shares into a foundation or donor advised fund, they are doing more than tax planning. They are making a commitment to using those funds for public benefit.

Tax reliefs for giving are offered precisely to encourage donors to make this transfer of wealth to civil society. This contract with the tax man raises interesting questions about how donors can best serve public benefit with the wealth they have ring-fenced for this purpose.

On one level, it is very simple. Any subsequent gift to a registered charity meets the tests of public benefit.

On another level, the processes that go into that funding decision also should also consider public accountability.

The larger the gift, the more important that decisions are taken with thought given to whether those decisions are open to public scrutiny and meet the needs of communities and wider society.

Unless there is an accountability framework in place, how does a donor know that their decisions are truly meeting the needs of the public good?

Tracking transparency, accountability and diversity

It is this line of thinking that led to the Foundation Practice Rating report, which saw its second annual report released today.

The FPR tracks the performance of 100 UK foundations according to their efforts on transparency, accountability and diversity. For true accountability, decisions have to be open to scrutiny and made with fair representation. The rating is based on 77 underlying questions.

The project is led by Friends Provident Foundation and supported by 12 other leading foundations, including Barrow Cadbury Trust, Esmée Fairbairn Foundation, The Joseph Rowntree Charitable Trust and City Bridge Trust. 

The sample group includes the 13 foundations that fund the research and the UK’s five largest foundations by grant budget. The other 82 are a stratified random sample from the rest of the foundation market, drawn from among the community foundation and those listed in the Foundation Giving Trends report.

The methodology makes it difficult to compare results across years because the bulk of the sample has changed between years one and two (although the team does check comparability using statistical measures).

Overall, seven foundations received an A grade this year, compared to three last year. The average score overall was up 7%. Transparency is the strongest pillar with 57% scoring an A grade.

A window into a foundation’s practice

Even so, 22 foundations in the sample did not have a website. The report argues that having a website is an essential pillar of transparency, enabling grantees and the wider public to gain a window into a foundation’s practice. No foundation without a website scored above a D.

The report also notes that organisations with fewer than five staff were more likely to gain a D grade. It suggests that having too few staff to develop policy and disclose information could impede both performance and impact.

However, the weakest pillar in both years has been diversity, with 48% scoring a D grade. The report notes that many organisations have diversity commitments, but no evidence of plans or targets.

It is important to note that the rating does not include measures of impact, which it states would be too complex. Instead, it seeks evidence from public sources about whether foundations are transparent about their effectiveness.

The rating is therefore not a measure of how successful a foundation is in delivering its mission, but rather how accountable it is publicly to the communities it serves in the process.

Striking a balance between governance and engagement

The report raises interesting questions for individual and family foundations whose resources are directed primarily at their mission about the level of governance needed to achieve an appropriate level of public accountability.

How can individuals, or families, bring external voices to decision making? What are the opportunities for transparency and openness? And how can they ensure they effectively connect with the needs of grantees and applicants when deciding what and how to fund? 

For founder-led foundations, there is also a critical balance to be struck between governance and engagement. Being present in the work of the foundation, being able to take risks in pursuit of higher social gains, and to feel the psychological rewards from that action, are important motivating factors for many philanthropists. There is an inherent tension between this entrepreneurial spirit of founder philanthropy and the processes that come with greater professionalisation.

The report does not grapple with these issues. Its goal is simply to highlight that all foundations, regardless of size or resourcing, should consider themselves to be on a journey towards a high standard of accountability.

Its approach offers a robust checklist for anyone who might want to consider their next step. 

Cath Dovey CBE

Cath Dovey

Co-founder, The Beacon Collaborative

Formerly a co-founder of Scorpio Partnership, the global wealth management strategy and research firm, Cath led the firm’s high-net-worth and strategy research capabilities for two decades. In the field of philanthropy, she headed Scorpio Partnership’s global research work with major donors, family givers and family foundations. Cath chairs Rosa, the UK fund for women and girls, and is a trustee of Philanthropy Impact.

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Related Pages

Beacon releases two reports mapping the path to growth

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In a week when Beacon was involved in the launch of two reports, a pertinent comment from one of Beacon’s close friends came to mind: “Do we need all these reports being produced by the philanthropy and social investment sectors? Is this a good use of philanthropic resource? Don’t we really need more action?”

These are fair points, especially as the mission of many of the organisations producing these reports is “to increase philanthropy and social investment by….doing something”.

While one could dismiss it as a post-Covid flurry, however, I would argue there is something more significant happening here. 

R&D matters

In 2019, the public and private sectors in the UK spent £38.5 billion on research and development, or 1.7% of GDP. 

R&D is usually defined as “…creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge.”

Furthering humankind might be in the definition, but this is no philanthropic act. R&D drives innovation and it drives value – so much so, the government has set a target that 2.4% of total GDP should be spent on R&D by 2027. 

If the philanthropy sector were going toe-to-toe with the public and private sectors, even on current spend there would be £85 million spent per year on R&D to support the estimated £5 billion of philanthropic value annually contributed to public benefit organisations. 

Now there’s a thought. 

While the philanthropy and social investment sectors have an excellent track record on bootstrapping innovation, it is hard not to think of Henry Kissinger’s most famous plagiarism: “If you don’t know where you are going, every road will get you nowhere.”

Research identifies opportunity, it de-risks action and it enables progress to be measured.  

If there is a common goal, there must also be one agreed critical path

In the absence of deep R&D budgets, the philanthropy and social investment sectors have become adept at sharing.

Knowledge, ideas and insights have been shared and woven through a number of recent reports, in many cases intentionally, as different organisations build on earlier work. 

If each iteration drives cohesion around a common agenda, this is not duplication but an increasingly refined analysis of the critical path toward a shared goal.

If each organisation brings a different perspective and a fresh set of insights, this enriches the map and helps to chart the best route through tricky terrain. 

Without advocacy, we are nowhere

Philanthropy occupies a space that sits between the public and private spheres. It, therefore, relies on actions from both sides in order to thrive.

Philanthropy and social investment will only grow when policymakers are clear about their role in the public agenda and when regulators provide a targeted framework, thus enabling private sector players, as well as the charity, philanthropy and social investment sectors themselves, to professionalise their support for end donors and investors. 

This value chain isn’t functioning well in the UK.

In the absence of a clear narrative on the role of philanthropy and social investment from the government, and with regulators unable to provide targeted guidance for socially-driven action, private sector providers are left in the unsustainable position of trying to drive donor engagement through meaningful experiences in an incoherent marketplace.

To grow philanthropy and social investment, we need policies from the government that can enable the work of the sector.

Policymakers are more likely to champion the needs of the philanthropy and social investment sectors if they can offer refined, evidence-based, and agreed proposals. This kind of high-quality advocacy requires a shared platform of research. 

Unlocking private assets for public benefit

With this preamble, it will come as no surprise that the reports we launched last week included vital contributions from partners across the philanthropy and social investment sectors. 

Unlocking Private Assets for Impact is a summary of the work of the 12-month Individual Impact Investing Commission, which was co-led by the Beacon Collaborative and Big Society Capital.

Eleven commissioners, representing investors, impact investment firms and sector organisations, shone a forensic light on the barriers that prevent more private individuals from putting their capital to work in impact investment opportunities. 

The report puts the needs of high-net-worth investors in the context of the wider growth and development of the impact investing sector. It concludes that private capital flows are being choked at source due to a lack of effective intermediation between opportunities and investors.

This partly reflects the lack of maturity in the impact investment marketplace, and partly the lack of responsiveness among wealth advisers to support their clients to invest across the values-based spectrum. 

It makes 12 recommendations, supported by a detailed action plan, showing how different actors within the sector can contribute to change. 

During the same week, the All-Party Parliamentary Group held its second meeting in Westminster to launch Unleashing the Potential of Philanthropy and Social Investment.

The report offers a 10-point plan setting out how government can help the philanthropy and social investment sectors to be more effective.

This action plan is based on insights and recommendations from organisations across both sectors. It highlights the essential role that government needs to play in order to enable more private capital to flow toward social impact.

Outlining a common agenda, highlighting innovation and advocating for government support, these reports aim to encourage all those with the capacity to drive change to play their part in unlocking more private assets for public benefit in the UK.  

We, therefore, invite any colleagues to take forward the ideas outlined in these reports and to share with us actions they are already undertaking on these themes.

At its best, philanthropy is a shared endeavour. Growing philanthropy too will be an act of partnership, driven by a common goal and shared understanding.

Unlocking private assets for impact

Author(s)

The Beacon Collaborative, The Individual Impact Investing Commission (IIIC)

Year

2022

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Unleashing the potential of philanthropy and social investment

Author(s)

The All Party Parliamentary Group on Philanthropy and Social Investment

Year

2022

View

Social equity in philanthropy – management or measurement?

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Over the last few weeks, I have had personal conversations with two individual major donors who both identified the same challenge: though they give with compassion, diligence and care, both had recently been made to feel their giving was inadequate in light of changing grantmaking practices. 

I mention this not to discourage, but to highlight what can happen when management practices get out of step with our ability to measure (and therefore value) what works. 

The problem is that best practice depends on the kind of donor you are.”

In recent years, the foundation sector has strengthened practices and standards of accessibility, participation, accountability, transparency and diversity. Most recently, the launch of the Foundation Practice Rating measures the quality of grantmaking according to 35 criteria of accountability, transparency and diversity.

These standards drive towards promoting best practices, especially by creating greater alignment between the fundraising organisations that drive social change and the practices of the funding sector. This is an excellent goal.  

The problem is that best practice depends on the kind of donor you are. Different funders adopt different strategies to maximise their philanthropic resources. 

Individual donors and small family foundations rarely have websites that are actively maintained because they would rather spend their money on the causes they care about than on communications.

Many are drawn to trust-based giving practices because they want to work closely with a small number of organisations rather than soliciting applications (which are open and transparent, but also create work for charities that may come to nothing if the application cannot be funded). Their policies will reflect the kind of funder they are. 

Questions around best practice have come to the fore in the wake of Covid and the aftermath of George Floyd’s murder in the US. Both shone a harsh light on the inequities in our society, including the failure of certain grantmaking practices to tackle those inequities proactively – and the consequent tacit maintenance of the status quo.  

If you want social equity – or fairness – funders have to go the extra mile.”

Grant funders have come to acknowledge that equality and equity are not the same: you can treat people (and organisations) equally but still not get equal outcomes because of systemic and structural barriers. If you want social equity – or fairness – funders have to go the extra mile.

Those with fewer resources or less capacity may choose a lighter touch, or a different path altogether, but does that negate their actions toward a more equitable society? In the absence of a measurement yardstick, can we say for sure that the work of any one donor is better or worse than another? 

If social equity is the sine qua non of the funding community, then it needs a common measurement framework around which to align its practices. 

Currently, we seem to be moving in a different direction: managing our way toward consistent best practices without deep understanding of the consequent gains, or the role played by different funders in a wider system. 

To draw a parallel, the financial markets coalesce around the principle of financial risk. All investors want to make a financial return and they all do so by managing their exposure to risk. Some look for investments that are undervalued; others look for innovation and opportunity. These many strategies result in a thriving market where companies of all sizes and in all sectors can access capital. 

If the goal of grant funders is to manage inequity to increase social returns, then it follows that we need to be able to measure what puts social equity at risk in order to understand the multitude of interventions that can mitigate it.

Better management should logically produce better outcomes, but by focusing our effort on standardising the practices of equitable funding and not the measurement of gains and losses in social equity, we run a very real risk of squeezing out a significant segment of funders whose essential complementarity in the system is neither fully understood nor valued.

By proactively managing inequity, we are very likely to generate higher social returns.”

As philanthropic funders, we may not be able to, or may not wish to, adopt standard management practices. What we can all do is bring an intentional awareness of inequity to our funding decisions, knowing that by proactively managing inequity, we are very likely to generate higher social returns. 

This will hold even in fields where social justice is not the primary concern. Environmental funders, for example, would become more conscious of the impacts of climate change and environmental degradation on the most disadvantaged. Arts and culture funders would become more aware of the community outreach of the organisations they support, and so on. 

Embedding a social equity lens into all funding practice will increase the opportunities for measurement of social gains, from which learnings about best practices can be developed – ideally in ways that are relevant and proportionate to funders and the organisations they support.

Cath Dovey CBE

Cath Dovey

Co-founder, The Beacon Collaborative

Formerly a co-founder of Scorpio Partnership, the global wealth management strategy and research firm, Cath led the firm’s high-net-worth and strategy research capabilities for two decades. In the field of philanthropy, she headed Scorpio Partnership’s global research work with major donors, family givers and family foundations. Cath chairs Rosa, the UK fund for women and girls, and is a trustee of Philanthropy Impact.

How many potential philanthropists are there in the UK?

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wealthy philanthropists header

 

Growing the UK donor pool – Quantity, quantum and quality.

Beacon co-founder Cath Dovey tackles the task of quantifying the high-net-worth philanthropy market in the UK. With only a finite number of individuals in this demographic, she underscores the importance of strong organisation/donor relationships for growing wealthy philanthropy.

I have been spending a lot of time looking at numbers recently  – too much, my colleagues would say. I have been trying to find sources to answer the question: how many potential philanthropists are there in the UK?

On one level, the answer is like the proverbial piece of string. Everyone with the willingness to build a committed relationship with the organisations they support, including time, talent and treasure, could be counted as a potential philanthropist.

But for the purposes of strategic planning, organisations need to know who is willing and able to make gifts of four and more figures.

Before digging into the data, it is important to flag a crucial insight from recent research on barriers to giving: Even among wealthy people, one of the biggest barriers to giving is financial insecurity.

“Even among wealthy people, one of the biggest barriers to giving is financial insecurity.”

While this may sound perverse, let’s remember making money is a risky business. Taking on financial risk in business means many wealthy people guard their personal wealth to protect against future shocks. They are often stretched and worry deeply about having enough for the future.

So, when figuring out how many people have the capacity to give, we can’t just consider how many wealthy people there are, we also need to think about the point at which financial security kicks in.

Exactly how many wealthy individuals are there?

…and how many might be willing to give regularly?

On the quantity question, CapGemini’s World Wealth Report 2021 estimates there are around 573,000 dollar millionaires in the UK. That is people who have $1 million once you exclude their property and any non-liquid assets. It’s a lot of money, but a million dollars (£750,000) in ready cash isn’t what it used to be.

We know from our own research that the giving patterns of millionaires are not that different from the wider population. It is only when we get to the next level of wealth that we start to see generous behaviours emerge.

CapGemini’s research identifies a segment of mid-tier millionaires, those with wealth above $5 million (£3.75 million). With more money, we can expect higher levels of financial security. Globally, 10% of dollar millionaires fit this category, or just over 50,000 wealthy individuals in the UK.

“We know from our own research that the giving patterns of millionaires are not that different from the wider population.”

ONS data, meanwhile, identifies the top 1% of income tax payers to be a group of around 300,000. This group has income greater than £162,000 per year. Again, it is a lot of money, but is it enough for these individuals to feel they have financial security?

Probably not – and here is my reasoning…

HMRC data on giving shows that it is only individuals in the income bracket above £250,000 who have increased their giving in recent years. In this category, total giving has gone up from £1.22 billion in 2015 to £1.98 billion in 2020 – an increase of 62% over five years. But for all other high-income groups, the level of giving has flatlined.

If it takes an income of £250,000 to feel financially secure enough to make regular major gifts, we need to question how many people fit into this bracket. According to the ONS, it is approximately 150,000 people (0.5% of income tax payers).

Taking these findings together suggests that among the UK’s high-net-worth population of around 500,000 we can expect 50,000 – 150,000 to be able and willing to give regularly in large amounts.

“We can expect 50,000 – 150,000 [HNW individuals] to be able and willing to give regularly in large amounts.”

So, where does this leave us?

It is a sobering thought that this number means there are fewer potential regular major donors than there are registered charities in the UK.

Yet it also highlights the critical importance for charities to engage well with their major givers. Wealthy donors typically give to six or seven charities, and it won’t take those individuals long to feel stretched or to switch funding to new charities if the relationship with an organisation isn’t a meaningful one.

“There is, of course, potential for all high-net-worth individuals to give more…”

Non-profit organisations also need to think about how to grow the major donor pool, recognising that just because someone is rich, that does not necessarily make them financially secure enough to make a major gift initially.

There is, of course, potential for all high-net-worth individuals to give more, but given their trepidation, giving may be sporadic until their circumstances change. Maybe they sell their business, or retire, or inherit.

Financial security happens by many means and it is only by getting to know your donors personally, that a fundraiser can anticipate when these magic moment might emerge. When they are ready, a good donor journey can see an individual’s giving increase tenfold.

“When they are ready, a good donor journey can see an individual’s giving increase tenfold.”

Lastly, it is a reminder that philanthropy is a precious resource. Major donors can unlock the capacity for organisations to innovate, to advocate and to grow, but there will always be more opportunities than donors, so thinking about how to present opportunities to them is vital. A case for support is only as good as the relationship behind it.

Knowing how many people have the capacity for major donor giving is one thing, unlocking that potential is more complex and patient work. We need to think as much about the quality of relationships, as we do about quantity or quantum of giving.

Cath Dovey CBE

Cath Dovey

Co-founder, The Beacon Collaborative

Formerly a co-founder of Scorpio Partnership, the global wealth management strategy and research firm, Cath led the firm’s high-net-worth and strategy research capabilities for two decades. In the field of philanthropy, she headed Scorpio Partnership’s global research work with major donors, family givers and family foundations. Cath chairs Rosa, the UK fund for women and girls, and is a trustee of Philanthropy Impact.

Elite philanthropy – academic study vs real world practice

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giving by the super-rich

Elite Philanthropy – academic study vs real world practice

A response to “Giving by the super-rich could be perpetuating social inequality, academics conclude”

On March 2021, Stephen Delahunty published an article in Third Sector entitled ‘Giving by the super-rich could be perpetuating social inequality, academic conclude.‘ The article is based on new research published by academics from the University of Bath School of Management and Newcastle University Business School.  

The study – Elite Philanthropy in the United States and the United Kingdom in the New Age of Inequalities – is based on a literature review of 263 studies, from Carnegie in 1889 to the present day, and focuses on multi-millionaire and billionaire philanthropy. It concludes elite philanthropy has received insufficient academic attention and more quantitative and qualitative research is required to understand the interplay between entrepreneurship, wealth and philanthropy. We would support this.

The study is an important and comprehensive literature review. However, the exclusive reliance on academic sources, which the authors acknowledge does not provide a thorough explanation of the dynamics we observe in philanthropy, means the analysis lacks the context of real-world practice. It infers motive from academic observation; it includes no direct analysis of the actions of philanthropists; and, it fails to take account of the role played by non-academics in the philanthropy sector who work to promote best practice considering ethics, power and accountability.

In this article, we seek to address the principal misconceptions that have been drawn out from the paper in Stephen Delahunty’s article. You can find other articles on this theme here, by Paul Vallely, and here, by Dr Beth Breeze.

Read the original study

The article begins by asserting that “large-scale giving by the super-rich has done almost nothing to redistribute wealth from rich to poor”. This statement makes a fundamental assumption that it is the intention of philanthropists to redistribute wealth. Philanthropy reflects the personal desire of individuals to contribute to positive social or environmental outcomes. Wealth redistribution is a matter for economic policy.

Similarly, the article asserts that “giving by wealthy individuals [has] helped to preserve social inequalities.” Once again, this suggests philanthropy has both the mandate and the capacity to upend social inequality. While it is true that some experienced philanthropists work towards systemic transformations, the majority of giving is focused on alleviating suffering and needs that are the result of pre-existing social inequalities.

It goes on “giving by the super-wealthy had failed to significantly benefit poor countries in the developing world.” Not only does this statement again assume philanthropists have the capacity to enable transformative economic development in poor countries – even where governments have failed to do so – it also fails to acknowledge the enormous challenges involved in giving money to non-profits in developing countries, as Beacon highlighted in research published last month. As a consequence, philanthropists who wish to contribute to international aid and development often do so via multinational NGOs, and the methodology of the research will not take account of such practical challenges.

Despite these failures, the article says “considerable dividends [are paid] to donors in the form of privilege and influence in society and politics” with “the super-rich able to pursue personal and political agendas through major charitable foundations”.

Firstly, assuming that the motives of philanthropists are not altruistic (which the study does as a central premise), there are regulations in place in the UK designed specifically to check such transgressions of power. All charitable foundations in the UK, even those funded by the super-rich, are bound by Charity Commission regulations, which require campaigning activity to be aligned with the foundation’s purpose and, in turn, must serve the public benefit. Secondly, there are rules governing party political campaigns, with strict limits on how much candidates and parties can spend. These rules are specifically designed to impede the capacity to “buy” political influence in the UK by philanthropic or any other means.

The ultimate expression of the disproportionate “social and cultural capital” received by philanthropists, the article suggests, is in the form of UK honours. On this point, it is worth noting that in the New Year’s Honours List only 4 of the 1,239 honours were given explicitly for philanthropy. One presumes the other 1,235 honourees were “amassing … social and cultural capital” in different walks of life.

Next the article argues that efforts to reform tax incentives, such as the cap on tax relief for donations, failed because “because philanthropists … almost universally opposed any changes to the system”.

Here, it is important to note that tax incentives are offered to encourage more giving for the benefit of civil society, not for the benefit of philanthropists. The majority of the tax relief goes to the charity in the form of GiftAid. Furthermore, the campaign against the tax cap on charitable donations in 2012 was, in fact, spearheaded by NCVO, not by philanthropists, on the basis that it would choke the flow of money to civil society.

We would suggest there is an alternative narrative that urgently needs academic examination, which is that financial success itself creates social privilege and political influence. In the act of becoming a philanthropist a wealthy individual acknowledges this privilege. When practiced well, philanthropists consciously defer this power to the causes and individuals they support and through this act of deference can challenge the status quo.

While there may be several zeros on the cheque, philanthropy is not a major economic force with the power to right social wrongs. Rather, it is a reagent within a wider system with the role to agitate and activate the messy process of positive social change.

Overcoming personal barriers to giving

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Overcoming personal barriers to giving

There have been a number of reports looking at the barriers to giving among wealthy people in the UK in recent months. They provide a great deal of insight into what the wider philanthropy sector could do better to support individual donors, but what can an individual philanthropist learn from them to make their own first step into giving a good one?

When you first decide that the time has come to make a sizeable gift to a charity, you might be surprised by the mixed feelings that come with that decision. 

What are the barriers of fear that stop wealthy people giving money away?

So, let’s be clear: it is normal to worry about how giving money away now might impact your life choices later on in life. It is normal to wonder if other people are giving more or less. It is normal to think about whether you want to talk about your choices and what your family and friends might think about the causes you have chosen to give to. It is normal to question whether giving money to charity is the best way to tackle an issue – couldn’t the government be doing more?

For most people who lead busy lives these questions can start to feel like hard work. You might even be tempted to stick with the direct debits you have in place and may just nudge them up a £100 or so. 

But, if you really want to make that first step into philanthropy, you will probably find that this isn’t a satisfying way forward. The question, “how can I make a difference?” will just keep resurfacing.

So, how do you overcome your fears?

First of all, make it a personal goal to make a meaningful gift within a year. For you, that gift might be £1,000, £5,000, £10,000 or more. Be clear with yourself about the amount with which you are comfortable to make this first step. 

Then consider what will make this gift meaningful to you. If you have had a personal or family tragedy in the past, perhaps that will make it a meaningful gift. Alternatively, many people get drawn to causes, like the environment, education or human rights because they want to feel to be part of the solution to bigger issues. Others are drawn to local activities where they can be involved. 

You need to identify something that really matters to you. 

After that, it is time to do some homework. There are 168,000 charitable organisations in the UK and because they focus their resources on their charitable mission, very few have a good public profile. 

The good news is that there are a growing number of resources to help you find out more. There are donor networks, like The Funding Network, the Environmental Funders Network or Ariadne. There are Community Foundations operating regionally across the UK. There are specialist philanthropy advisers or, if you have a wealth management relationship, there may be someone on their team who can help. There are also a number of online resources designed to help donors filter down to the charities where there is a good match, CharityBase, SoGive and Maanch, to name a few. 

It is worth spending time to find an organisation that can help you to have the meaningful experience you are looking for. Remember, you have given yourself a year. 

By the way, you should also congratulate yourself on getting this far. Most people don’t conquer their fears to get to this point. 

What are the barriers of trust that stop wealthy people from giving money away?

Wealthy people are money-focused, so it shouldn’t come as a surprise that you will have lots of questions for the organisations you are considering supporting. You are used to kicking the tyres on organisations with which you do business and you will probably want to do the same to the charities you support. 

Just prepare yourself that many charitable organisations might not be ready for the kind of questions that you routinely ask in business. Very few have the resources to put together a brochure or even a good annual report. They may also spend very little time with their donors, focusing their efforts instead on the work that they do. 

It is absolutely right to ask the organisation about its financial position, to find out about its people and to ask questions so you understand its work. You have to feel confident that your gift is going to be a meaningful one. Just be prepared that the responses to these questions might not be as polished as you are used to.

Ultimately, you will have to decide if you like what they are doing, if you believe the people are passionate about their work, if you think their work can make a difference and how you are going to judge that. If you think they can make a difference, then it is time to make that bank transfer. 

Just remember before you hit the “confirm transaction” button that if the problems they are working on were easy to fix, then they would have been fixed by now. With your big gift, you might not see immediate results, but you have automatically become part of the solution – and hopefully it’s a good feeling.

Building a relationship

Over the coming weeks and months you’ll want to feel more connected to the organisation. You’ll want to find out more about its work and how your gift is contributing to making a difference. 

Keep in mind that the focus of the organisation is on its work. It is important to let them get on with that work. Your role is as a supporter. 

That said, hopefully the organisation you have picked will recognise that your first gift was a big deal for you. They will keep in touch and share more about their work and the difference that it is making. You may also discover there are ways you can help the organisation apart from giving money, perhaps through introductions or volunteering your time and skills.

Over time, with more knowledge, with a deeper relationship and with an understanding of the results the organisation is delivering, you might find you want to give more. 

Equally, you may decide a different approach or a different organisation will suit you better. Take stock. You have overcome the personal barriers that were holding you back. You have already made a difference and you have a better idea of what meaningful giving means to you. Starting small has given you the foundations on which to build. 

Lastly, it is worth remembering that overcoming the barriers to giving is a two-way street. Charitable organisations and the philanthropy sector are working hard to find ways to make sure your experience of giving is a meaningful one, but they are on a journey too. They can try to build your confidence, but only you can overcome your fears. 

Read next: What is the threshold for generosity in the UK today?

See more resources for philanthropists in our resource hub

What is the threshold for generosity in the UK today?

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What is the threshold for generosity in the UK today?

When you start on your giving journey, one of the hardest questions to answer is: “how much is generous?”

Giving is so personal, and traditionally so private, that there are not really any benchmarks for generosity. Talk to friends and neighbours and you may discover you are doing more than most. Look in the media and you will find so many examples of big philanthropy that you might start to wonder if you are generous at all. 

The lack of a shared understanding of what it might mean to be generous in a UK context has resulted in levels of giving that vary hugely among wealthy people – by which we mean from a few hundred pounds to several million. Naturally, everyone feels their own level of giving is generous. 

This may be good for the conscience, but is it helpful?

 

Would it be helpful to have shared understanding of generosity?

In practical terms, an agreed understanding of what it means to be generous might have some real benefits. 

Let’s start with the organisations that are receiving gifts from wealthy individuals. When you give, let’s say, £5,000 to a charity you care about, it might feel like a lot of money to you. Of course, it is in absolute terms. Yet a gift of this size might only keep a very small charity running for a few weeks or months. In a large charity, it will be barely more than a rounding error. 

This can lead to a mismatch of expectations. Thinly-resourced charities don’t have much time to follow up with donors at the best of times and a donation of this size might not even result in a thank you note. That is not a great feeling for you. It might even seem like bad manners under the circumstances and it is certainly no way to start on a giving journey. 

There is a similar problem if you want to get advice or support to make sure your gift does as much good as possible. Gifts at the £5,000 level are not generally big enough to merit much quality time. 

An objective measure of what generous giving looks like would be helpful all round to setting and managing expectations to make sure your giving journey gets off on the right foot.

 

Why does generosity vary so much among the wealthy?

Over the last couple of years we have been working on various data sets to try to answer the question: how much is generous for the UK’s wealthy?

It has not been easy, partly because we have to work with those significant fluctuations of giving within wealth bands. Partly also because, on average, those who are affluent give more as a proportion of their assets than those who are wealthy or very wealthy, which means the only way to construct a generosity threshold is on a continuum for different wealth bands. There is no one-size-fits-all when it comes to generosity. 

This giving continuum happens for two reasons. Firstly, people give from their income. Wealthy people may have a lot of money invested, but they will typically only draw down the money they need to cover their lifestyle costs. For most wealthy people, this means they have much more tied up in investments than they have in their bank account and consequently the amount they give may be a high portion of their income, but will be a much smaller proportion of their overall assets.

Secondly, people generally think in absolute terms and not in percentages. So, when an individual considers giving £1,000 it sounds like a reasonable amount, but when someone considers giving £100,000 it sounds like a lot. It doesn’t matter if the person has £100,000 or £10 million in the bank and these gifts would represent 1% of assets respectively, the larger number has a perceived higher risk. This is due to an effect called ratio bias and it means people have a tendency to attribute a bigger risk or reward to a bigger absolute number, even if the ratio is the same.

 

Is it possible to develop an objective standard for generosity?

Yet, in spite of these challenges – or more accurately because these biases and behaviours are so commonplace among people – it is possible to construct a model showing what it means to be generous for each wealth band. 

Expressing the values both as a percentage of wealth and in absolute terms, the model shows that someone with between £250,000 and £1 million of investable assets should consider a gift of 1% of assets to be generous. Depending on the level of wealth, this will equate to between £2,500 and £10,000 of giving each year. 

For those with investable assets between £1 million and £5 million, the percentage is 1.1%, or between £11,000 and £55,000. 

Someone with between £5 million and £10 million of assets should aim to give 1.2% of their assets each year, or between £60,000 and £120,000, and so on. 

Wealth level (£)  

Generosity threshold

% of assets given to be considered generous

 Amount of annual giving (£)
£100,000 0.9% £900
£250,000 1.0% £2,500
£500,000 1.0% £5,000
£1,000,000 1.1% £11,000
£5,000,000 1.2% £60,000
£10,000,000 1.2% £120,000
£100,000,000 1.4% £1,400,000
£1,000,000,000 1.7% £17,000,000
£10,000,000,000 2.0% £200,000,000

Figure 1: The UK’s Generosity Threshold – Source: Beacon Collaborative

The model is based on data from a survey on giving habits that we conducted in 2019 among 1,300 wealthy individuals. We combined this with supplementary data from the Sunday Times Giving List and the Coutts Million Pound Donors Report to ensure we were capturing data from individuals whose giving is known to be generous.

We then used statistical methods to determine objectively what it means to be “generous” at each level of wealth.

 

Why do we need a starting point for generosity?

It is important to note that these values are the threshold for generosity. In other words, this amount is the starting point for what might be considered to be generous. Within each wealth band there will be individuals who give well above this level for family, religious, cultural or other reasons. 

For most wealthy people, however, these thresholds will be a significant stretch from their current levels of giving. In 2019’s survey, the median level of giving among wealthy people was £4,000. This means around half of the UK’s millionaires would have multiply their giving by 4x or even 40x for it to reach the generosity threshold, depending of course on how rich they are. 

We don’t expect this will happen overnight. It will take time for wealthy people to gain confidence, build relationships and access the support they need to move forward on their giving journeys. 

Equally, we don’t want these threshold values to be seen as an expectation or judgement. Giving is a voluntary act and it is important that people are free to give at the levels that are right for their own circumstances, values and beliefs. 

Rather, for those starting on their giving journey, we hope the threshold may become an aspiration. For experienced givers, it may be a benchmark that they long-since have surpassed. 

For the wider philanthropy sector, however, we hope it creates a shared understanding of what serious giving looks like and feels like for individuals in different wealth bands. 

Fundraisers, take note that a £5,000 gift from someone with £500,000 in assets is not to be sneezed at. Wealth advisers should beware that when a client with £5 million considers a gift of £60,000, they will greatly value your support, because this is a big deal relative to their wealth. 

And for the philanthropy sector as a whole, if we can give more wealthy people the confidence to donate at these levels, it will be a measure of our success in enabling meaningful giving journeys. 

UK wealthy increasing giving in response to COVID-19 pandemic

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UK wealthy increasing giving in response to COVID-19 pandemic

In June this year, we commissioned Savanta to conduct quarterly research on the giving levels among the wealthy population in the UK. In part, this was a response to the COVID-19 pandemic to determine how British philanthropy was responding.

The first poll we were heartened to find 25% had given more than they had planned in the first three months of COVID-19 crisis and 19% gave less, suggesting a net increase in giving by UK millionaires during the first few weeks of the crisis. The research included 300 individuals with investable wealth >£1 million.

By September, the sense was growing that we were moving from immediate crisis to a sustained period of uncertainty. As the negative impact of this new normal began to unfold, threatening jobs and livelihoods, as well as health and wellbeing, we took a second look at giving by the UK’s millionaires to track how their patterns of giving are changing.

The most recent poll included 500 respondents and found, once again, that 26% gave more than planned in the previous quarter versus 18% who gave less.

These results suggest that a significant section of the UK’s wealthy population is continuing to support the non-profit sector through the COVID-19 pandemic above the level of their planned giving. This finding is borne out by the underlying giving levels being reported. In June, we found a median giving level of £200, with 25% having given more than £1,000 in the previous quarter.

In September, these figures have crept up to a median giving level of £410, with 35% having given more than £1,000. The increase in September was driven by a surge among those with investable wealth between £1 million – £5 million. The number in this group giving £1,000 – £5,000 during the quarter doubled from 10% to 20%.

Those giving gifts >£10,000 also almost doubled in this group from 5% to 9%. In parallel, we also asked philanthropists in the Beacon Collaborative network to report back on their levels of giving during the previous quarter. Among the small number of respondents, 70% had given more than they planned between June and September. The median level of giving was £11,000.

These results suggest that those at the core and on the fringes of British philanthropy are responding to the effects of the COVID-19 pandemic on wider society. As we continue to survey through the coming months, we will determine if this effort can be sustained and whether those who are currently sitting on the sidelines can be encouraged to do more.

Beacon launch trio of reports on growing giving in the UK

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New research shows British philanthropy is strengthening, but the needs created by the COVID-19 crisis highlight the potential for philanthropy to do more.

Given the overwhelming scale of the COVID-19 crisis, government cannot tackle all the extra social problems created alone. Charities are providing critical support to help communities, and vulnerable people across society, cope. Philanthropy is in a unique position to respond in a way that complements and supports the government.

Over the last few years, official statistics show that individual giving by wealthy people in the UK is increasing. Taking together HMRC data on giving by those with an income over £250,000, data on contributions to donor-advised funds and the Sunday Times Giving List suggest that among the wealthy, overall giving increased from £4.86 billion in 2017 to £5.88 billion in 2018; a 21% increase.

This growth of over £1 billion in philanthropic giving is, of course, worth celebrating. However, the global situation has changed dramatically since the research in these reports was undertaken. Estimates from the NCVO now place the loss in income for charities due to the COVID-19 pandemic at around £4 billion over the next 12 weeks.

Today The Beacon Collaborative partners release three reports focused on how to grow high-net-worth giving in the UK and improve the quality of giving. The steps that can be taken to harness more private money for public good are laid out in these reports and they are increasingly relevant for rapidly building a more effective philanthropic sector. Now, more than ever, it is clear that philanthropy and government must act as complimentary parts of the relief and rebuild effort – supporting crucial causes that needed help before the crisis, and will need more after.

These reports, delayed from their initial release due to the pandemic, provide valuable insights into the philanthropic landscape in the UK today. They demonstrate ways in which philanthropists can collaborate with all stakeholders to achieve more, which, during the current crisis, is more relevant and needed than ever. Following the guidance and advice in these reports will lead the philanthropic sector towards an impactful solution to the challenges we currently face and prepare for longer-term interventions for all causes.

The reaction of British philanthropists to this crisis has already demonstrated how philanthropy is able to act with nimbly and with flexibility to support civil society. However, if it is to help meet the significant shortfall in charitable funding then individuals cannot work in isolation.

The three reports launched today by the Beacon Collaborative and its partners are:

The Beacon Collaborative is an alliance of partners across the philanthropy sector with the collective goal to support a cultural change in giving among the wealthy in the UK, adding at least £2 billion a year more in high-net worth giving. This crisis demands a united, collaborative approach between philanthropists, government and civil society to solving our most pressing challenges. Now is the time to work to embed philanthropy at the heart of this fight.

An additional £2 billion in giving every year would be equal to the income of Cancer Research, Oxfam, the British Red Cross, Macmillan, the RNLI, the RSPCC and the NSPCC combined annually. The enormous difference that this would make to those most in need and the general welfare of the population is higher than the purely financial value. Blending quantitative research, best practice examples and systemic improvements, the Beacon Collaborative partners are seeking to provide donors with the resources they need to ensure their giving is impactful and rewarding.

Matthew Bowcock, Founder of Beacon Collaborative, said:

“We believe that philanthropists can and want to be part of the solution. We are today releasing reports which demonstrate not only that there is untapped giving in UK by wealthy individuals, but also how the philanthropy and fundraising sectors can work together to encourage donors to get the most out of this rewarding way of life.

Almost all wealthy people engage in charitable giving, but they need to be supported to do more. They want to be seen as partners to the organisations they support and fundraising organisations can find ways to engage them as peers. Networks are particularly important to make sure philanthropists are not working in isolation and have access to the knowledge and best practice they need to increase their impact. Indeed, as a society we need to understand and promote philanthropy in its true context; not as the contribution of one individual, but as an outcome of strategic partnerships and collaboration.

This has never been more crucial than at this time of national need. It’s time for philanthropists to do their bit, quickly and effectively, and these findings give guidance on how to do that in the most potent way.

Philanthropists have a role to play in relief and rebuilding from this crisis but also must consider the underlying issues and ensure that the charity sector is supported as a whole so that it is still there when we need it afterwards.

This research is a springboard for the Beacon Collaborative’s next steps to strengthen the philanthropy sector and maintain the upward trend in giving by wealthy individuals in the UK.”

The Beacon Collaborative is funded by Arts Council England, City Bridge Trust, Hazelhurst Trust, Pears Foundation and Reekimlane Foundation. These organisations share the goal to achieve resilience and sustainability for the non-profit sector in an era when private donations are becoming an increasingly important source of capital for civil society.

Sir Nicholas Serota, Chair, Arts Council England emphasised the importance of Beacon’s work:

“Philanthropy is crucial for the cultural sector – it enables work that otherwise would not be possible, and helps to strengthen bonds between organisations and the communities they serve. By investing in this research we hope to develop a better understanding of what encourages people to give and stimulate more effective fundraising across the cultural and creative sectors as well as other charitable sectors.”

The partners that work with the Beacon Collaborative include the Association of Charitable Foundations, Barclays Private Bank, Big Society Capital, Charities Aid Foundation, EY, The Institute of Fundraising, New Philanthropy Capital, Philanthropy Impact, The Philanthropy Workshop and UK Community Foundations.

Emma Turner, Director of Philanthropy Services, Barclays Private Bank spoke of the launch:

“We are delighted to partner with the Beacon Collaborative to support individuals and organisations overcome major barriers to giving. The reports launched today offer an insightful view into the world of philanthropy and we believe they will help deliver real, positive change in the sector.”

Key findings from the research

Collaborating for a Cause:

  • A network should take a long-term system-wide perspective that considers the root causes of a problem, the various actors working on the issue, and the barriers and opportunities for change.
  • A network should support and increase collective impact. It should encourage the diffusion of ideas and learning and increase its resilience and adaptive capacity by ensuring equal voices to all and participation from a variety of stakeholders.
  • To create a network, founding members should consider: o What is the network’s core purpose? How can we align members around the cause? How do we stay relevant?
  • Who are the stakeholders that are needed to achieve impact?
  • How can we understand the network’s impact and improve the activities?
  • How can members be enabled to increase the effectiveness of their giving and achieving greater impact on the cause?

Katie Boswell, NPC Associate Director (Strategy & Leadership), author of the report said:

“Cause-related networks offer unique opportunities for impactful giving. By independently bringing philanthropists together around one goal, they motivate people to give more and better, strengthening people’s capabilities and creating opportunities to give. Our research found that networks are most effective when they are inclusive, trusted, and embedded in the issue they seek to solve.”

The Giving Experience:

  • Many wealthy individuals are motivated by a sense of belonging and shared purpose. They want to be part of the effort to achieve positive change. Fundraisers need to include them as partners and peers, building relationships based on mutual respect.
  • Fundraisers need to continue to encourage entry-level giving and welcome new donors to the table, recognising that trust is a complex issue built up over time and multiple interactions.
  • Fundraisers also need to recognise that wealthy people are not a homogenous group. Donor segmentation offers a powerful tool to support fundraising organisations to meet the needs of different groups of donors in more systematic and efficient ways.
  • Fundraising organisations needs to be supported by the wider context. The negative public discourse on giving and the limited availability of wealthy advice to support major donors equally contribute to a weak environment for giving among the wealthy population.

Cath Dovey, co-founder of the Beacon Collaborative and author of the report said:

“In an era of rising demand, more fundraising organisation are recognising the importance of private donations for their organisational resilience. Private capital often has fewer constraints than other sources of funding and can be less sensitive to political and economic transitions.

This research shows that wealthy people in the UK want to engage as partners and peers to support positive social and environmental outcomes. Fundraisers have a vital role to play in supporting them on that journey.”

Giving Voice to Philanthropy:

  • The value of philanthropy is not just in the contributions of one individual but, rather, in the outcomes of strategic partnerships and collaboration.
  • A network of influencers able to communicate the impact of philanthropy on communities today and its potential for the future will increase the positive image of philanthropy.
  • Coordinated educational programmes are required for philanthropists, wealth advisers, fundraisers, and leaders of civil society organisations.
  • Peer to peer networks for philanthropists are invaluable in enabling philanthropists to learn directly from the experience of others.

Andrew Watt of Third Sector Strategy, researcher and lead author of the report said:

“Talk of philanthropists inevitably defaults to one dimension – numbers of zeros; the size of gifts, rather than what philanthropic partnerships actually achieve.

With this report, we hand the voice to the philanthropists; describing what motivates them, what they feel about what they do – most particularly, what they think remains to be achieved, the tools they need and the road map to arrive there.

Philanthropists come from across our communities and in today’s world are from backgrounds as varied as the beneficiaries they serve. Their heritage, connections and experience are as important to the success of the projects they support as the financial investment they make in them.

The recommendations we make are intended to outline the platform philanthropists and their community partners say they need for success.”

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