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Growing Giving

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.

Raising the stakes — researching the scale and potential of high net worth philanthropy

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By Cathy Pharoah, Visiting Professor of Charity Funding, Bayes Business School

Policy makers, charities, and practitioners are increasingly recognising the important role played by wealthy people in giving to good causes of all kinds, from local community needs to national arts and science facilities.

Efforts to increase this focus, and indeed to increase giving from the wealthiest, will be a very hard ask without better evidence on what the wealthy already contribute, and the potential scale for growth. New research has indicated that we have poor understanding of giving by High Net Worth (HNW) and ultra-HNW (UHNW) individuals in the UK, and that its level and scope are being significantly under-estimated. This leaves a weak evidence base for policies that sustain and grow HNW giving.

The research concluded that this gap in our knowledge was left by existing giving surveys which do not collect data on donor wealth, seriously under-represent the very wealthy, and vary widely in features such as types of donor included, timescales, kinds of beneficiaries included and what is measured (eg tax relief, size or type of gift). The outcome is a fragmented and discontinuous picture of giving in the UK, with existing research methodologies producing only a partial view of the total picture of HNW giving, sometimes with conflicting results.

To address these gaps, and demonstrate the potential of better data on HNW giving, our study trialled a test model based on survey data in which donors were selected by their wealth level, and data was boosted to include UHNW giving. Its results suggests that total giving by the HNW and UHNW population in the UK could be worth around £7.76 billion, and possibly much more [1]. This figure is largely missing from current estimates of giving in the UK.

A unique data-set was compiled from pooling responses to targeted questions on the level of giving among UK millionaires in 2020, 2021, 2022 placed quarterly by Beacon Collaborative in Savanta’s MillionnaireVue survey. This quarterly survey targets 300-500 individuals with investable wealth of >£1 million (ie. excluding property). For the test model, the data was boosted with figures on UHNW giving in the Sunday Times Giving List, where the top six highest donations are worth more than 40% of total STRL giving in each year.

In addition to the new estimate of £7.76bn for HNW giving, the results of the research show a 91% participation rate in giving by people with wealth of >£1 million. And importantly, in spite of some limits to the wealth data collected in the survey, results also indicate a moderately strong relationship between investable wealth and giving.

The finding that the more wealth people have, the more they tend to give is clearly significant for strategy at fundraising and policy levels. The finding suggests many HNW and UHNW individuals are giving based on their level of wealth, not their income. In turn, this suggests it is the asset base of an individual that provides the financial security which prompts the decision and capacity to give larger amounts.

A targeted survey with more extensive wealth data could test the strength and nature of the relationship between wealth and giving, and indicate, for example, which wealth thresholds are the most significant for changes in giving decisions, and how.

In addition to better financial insights into HNW giving, a targeted survey which could provide more models of giving behaviours would be particularly useful to those targeting or supporting HNW and UHNW donors. The patterns which have been found to characterise lower level giving in the general population cannot simply be extrapolated to this very different group of donors, who are likely to be influenced by factors such as wealth advice, business and professional interests, and global trends.

Areas for further research could also include the causes and institutions they support, the effect of changes in personal circumstances on donor decision-making, the ways in which HNW give including through legacies, foundations and gift funds, involvement in social investment, the numbers of charities supported and gifts made.

Based on this review of existing data, it was concluded that a new survey was needed, whose key features would primarily include:

  • inclusion of data on wealth, so that HNW giving could be studied in relation to HNW wealth
  • boosting data on hard-to-access UHNWs, to ensure all giving was included in final estimates
  • a sufficiently large sample of wealthy people to cover the whole wealth spectrum
  • asking donors themselves directly about their giving amounts and behaviours.

Despite the huge financial and social value of the philanthropy of the UK’s wealthiest people, very little giving research has a focus on high net worth (HNW) giving. This is particularly surprising given the distinct nature of HNW philanthropy, and its specialised professional fundraising and wealth advisory approaches.

It leaves the philanthropy sector hamstrung in its ability to advocate effectively with policy makers. The lack of clarity and coherence in data significantly hampers our ability to grow and develop HNW giving. We cannot call for regulatory changes, tax incentives, strategic investment or match funds if we cannot pinpoint the size of the potential prize.

Without the data to build a clear business case fundraising organisations cannot attract investment to develop their capabilities and capacity to work with major and HNW donors. Last but not least, the data gap leaves the door open for media narratives that the rich are not pulling their weight, which we cannot challenge. This is only likely to demotivate potential donors.

The results of this new HNW philanthropy market sizing project more than demonstrate the case for investment in a better study of HNW giving.

[1] Confidence limits were calculated to range between £6.45 billion and £11.99 billion

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Scoping the high net worth philanthropy market

Author(s)

Cathy Pharoah, Cath Dovey, Tom McKenzie, Vivek Thaker

Year

2023

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The work was funded by Arts Council England and City Bridge Foundation

The research survey was carried out and analysed by Savanta, through questions included in their MillionaireVue omnibus survey, commissioned by Beacon Collaborative. Savanta provided access to additional economic and demographic data.

Authors

  • Cathy Pharoah is a Visiting Professor of Charity Funding, Bayes Business School
  • Cath Dovey is Co-Founder, Beacon Collaborative
  • Tom McKenzie is Professor of Economics, CBS International Business School
  • Vivek Thaker is Associate Director, Savanta

Cultivating Generosity: The money coach: Shifting your wealth from worry to wellbeing

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Iris Brilliant is an anti-capitalist money coach who guides wealthy people who are confused about what to do with their money. She offers a compassionate space for people to address their shame and anxiety about money. Using her expertise in social justice philanthropy and investing she helps them create a plan for their wealth, lead values-aligned lives and help fund social justice.

Iris Brilliant

Here she talks to Beacon’s Philanthropy Network Director Sarah Hughes…

Sarah:  I’m interested in the idea that money can make you unwell, or cause a lot of anxiety, including when you are wealthy. What is your experience of this and how does  anxiety manifest among the rich?

Iris: The moment we receive something good, we start grasping onto it and are afraid of losing it. That’s what I see happening with my clients when they inherit wealth or quickly earn more money than they’re accustomed to. There’s this very human reaction of immediately being afraid of losing it and grasping on tightly. As we grasp on, we don’t realise how much stress we’re putting in our body; how exhausting it is to suddenly be so afraid of losing something. Something that’s meant to be a gift and a privilege becomes a kind of burden.

When that occurs, a great deal of suffering immediately happens both to the individual and  to their sense of self in the world and their relationships. My work starts there, by helping my clients notice the tension they’re holding in their body and emotionally.

It really doesn’t matter how much money people have. They could inherit half a million, they could inherit 20 million. The stress is still the same. I try to help my clients recognise those stresses and unpack them. What are our fears of what will happen if we lose or give away some of this money? Or consider not investing the money in super lucrative extractive investments just to get richer?

Supporting people to really examine what those fears are helps them make an active choice: how much stress they want to take on when it comes to the tension between protecting versus softening the grip around their money.

Sarah: Iris, can you explain what a money coach is and why you became (an anti-capitalist) one?

Iris: Broadly speaking, money coaches come from an industry of all kinds of professionals, some of whom want to help you make more money, while others want to help you work on your relationship with money and so on. It’s a broad term, but there is a small group of us in the US who work with wealthy people on wealth redistribution commitments. It’s a very small subset.

I’m an anti-capitalist money coach, which means everything I do is played out in the wider context that we’re living in corporate capitalism and we’re functioning in an economy that is not sustainable, that isn’t working for the majority of people and that really relies on exploitation to function properly.

So I take the stance that may be controversial, which is that I don’t believe there’s such a thing as moral capitalism. I don’t believe there’s such a thing as capitalism being reformed to work better for people. My belief is we need a new economy that’s going to actually support the well being of the majority of the world and of the planet.

So I’m an anti-capitalist money coach who specifically works with wealthy people who want to do the opposite of what they were told to do! That is to redistribute wealth, to divest from extractive investments, to have the audacity to talk about money and to disclose their finances for the sake of being transparent in their lives. To dare to consider giving up unearned power and moving towards a life of more humility and closeness with others.

And to also just dare to feel and explore all of the emotions that we have that are connected to wealth and our money stories and our family’s money stories.

Shifting from worry to wellness: Getting real, personal beliefs systems, family stories, big picture commitments

Sarah: Are there any clear steps or stages that a wealthy person can move through to shift from money worry to money wellbeing?

Iris: There’s a very clear formula. Everyone’s a bit different, but for the most part, there’s a kind of predictable arc I take clients through to experience a lot more ease in their relationship with money and wealth.

The first is getting clear on how much money you have, which might sound simple, but I would say 90% of my clients are inaccurate in how much money they think they have, until we really go through and add up their bank accounts and their assets. I would say 99% of the time my clients are richer than they thought.

Then we explore people’s default beliefs about money, and it never ceases to amaze me just how many different and opposing beliefs we carry about money that we’ve just inherited from society and from our family. So we really unpack our different moral beliefs about money and power and our different emotional experiences and early lived experiences connected to money.

I often tell my clients that my first memory of money was my Dad taking me shopping, and he was too embarrassed to come into the girls clothing area, so he sent me off by myself with a $100 bill. I was nine or ten. I don’t know why he decided to do that. I lost the money while I was trying on clothes, and I just had this horrible sinking feeling that I was going to get in a lot of trouble and that I was spoiled and bad for losing this money. And I did get in trouble. As a result, I used to carry a lot of shame and fear. The idea that I’m bad at money and if I make a mistake with money, I’ll get in really big trouble comes directly from that first experience.

Additionally, we will explore legacy and family messages around money because a lot of us carry instinctive money reflexes that we’re not sure of the origins for. However, we know trauma gets passed down intergenerationally. So there’s always trauma in a family lineage that is in some way connected to safety and survival. For those of us who are raised wealthy and have wealth today, demystifying that can help us understand why we have so much fear about our security.

And then we will look at values we have that are bigger than any feeling or emotion about money. An example could be someone setting out that they want to commit to climate justice and to feeling proud of what they did in their lifetime to support different ecosystems to flourish. That becomes their guiding principle and is set as something that matters more to them than their individual comfort. This allows them to create a long term vision for what they want in their lives.

Finally, when we have those commitments laid down as part of a vision for the life they want to lead, we identify the measurable, courageous steps they’re going to take to move towards that long term vision, both for themselves and for the world they want to see. That always includes setting a concrete giving goal that feels more brave than ones they’ve had before.

And then the coaching shifts into offering accountability and support to ensure they’re making progress on their goals and supporting them when they get stuck, which often happens when we have ambitious goals.

Sarah: Do you include all the different ways they can use their capital for good in your coaching? Would you talk about impact investing and if so, does that surprise any of your clients?

Iris: All of my clients here in the US are very interested in impact investing and divestment and all the different aspects of the burgeoning ‘just economy’. So no one is surprised to look at leveraging all their actions and resources.

I find it a tricky topic, however. I recently read Marjorie Kelly’s book “Wealth Supremacy: How the Extractive Economy and the Biased Rules of Capitalism Drive Today’s Crises” and I recommend it. It’s an incredible book.

One of the things she talks about is capital bias, which is a bias towards maximum increase of capital, no matter what, which is ultimately to benefit the wealth holders and the shareholders at the expense of workers, the economy and the planet.

I worked at a wealth management firm that does social impact investing. And in working there and studying different types of socially responsible investing, I’ve learned we have to be really careful to look under the hood of where our money is being invested. There will always be marketing that tells us that it’s impact-oriented or more socially aware than other forms of investments, which it might very well be. The bottom line is, when we are making more profit than inflation rates from our investments, we’re always extracting.

Marjorie has a great expression in the book: “There’s a dream world of wealth. The fiction that financial gains somehow fall from the sky pristine and unblemished.”

And that’s exactly the myth we’re taught. You see this little number on your computer screen that’s invested somewhere. You don’t know where it is. It magically grows as it’s supposed to, and all is well and good. But underneath that number on your screen are human beings who are working and being barely paid for their efforts. They don’t get to have any agency in the company. And the profits go to us, those who aren’t doing anything.

So part of what I do is help clients develop more discernment around which types of investments truly are centred on social justice and which ones are just a little bit less bad than being invested in oil companies.

The wealthy white family has firm rules

Sarah: Iris, you’ve written about the “rules of the white wealthy family”. Can you summarise them for us and why wealthy white people, or all who are wealthy, should understand and resist them?

Iris: I think this article series is relevant to all wealthy people, although not every message will resonate as deeply with families of colour or immigrants who have different family and community values. But some of them certainly still will, because these are general rules of wealth.

In the ten years I have been doing this work I have seen two things hundreds of times over that make me very curious.

I’ll be coaching people on increasing their giving and I’ll find that a lot of the people who come to me are only giving away 1% or 2% of their money annually and want to increase this and will happily increase a little bit. But when we explore the possibility of greater giving from the principal or corpus, there’s this full body shutdown. Again, it doesn’t matter how big the corpus is, there’s an intense fear that I see on my clients’ faces. This total block that it is not okay to spend down, it is not okay for the next generation of your family to have less money than you.

The second contradiction is with clients who are very committed to community, perhaps they live more in a community and they have a really strong network of relationships, but they are terrified to share money with people they know. They can give to nonprofits, but they are scared and overwhelmed at the concept of giving money to people in their lives who deeply need money.

These two contradictions led me to a lot of research and then to this article series which made total sense to write because I see so much of it.

The first article is my best attempt to examine the unconscious beliefs that we were taught about family and money. Beliefs that serve to preserve wealth in wealthy families and not have us share money with anyone else, through the guise of it being just. This is how family is and is intended to be.

The first rule is that the nuclear family is the only legitimate form of family. And I know it very much lives in my body that in order to have a good or successful life, I need a spouse and I need to have kids. I think a lot of us feel that pressure and there’s a lot of reasons why. But one of them is because the nuclear family is one way to preserve wealth within a wealthy family and to make the lines of inheritance extremely clear.

The next, which goes with the first rule, is that you can’t share money outside the family. The only new person you can bring in is someone that you will marry. Beyond that, it’s inappropriate, it’s rude, it’s simply not done. To share money with your friends, employees, neighbours; it’s inconceivable for us and another thing that serves to preserve wealth within wealthy families.

That’s two of the rules, the next three cover why anything goes in the name of family, secrecy and the strict behaviour code that traps us all.

I really encourage your readers to dig into the article, and I would add another read that I think they might appreciate. This one is about the conditionings in philanthropy and finance around perpetuity legacy with the default assumption that we need to preserve wealth for future generations and that generations should only get wealthier over time. This is core to what I want your readers to consider questioning.

It’s natural and normal for parents to want to feel reassured that their children will be okay when they die. That’s just such a natural and loving instinct and a really beautiful thing. I want people to avoid taking it to the extreme though.

Because when you give your kids enough money to live off of indefinitely without having to work, let alone when you create trust funds for your grandchildren or your unborn grandchildren — which people can do and my clients parents often do so — you are actually setting up your children to be really disempowered in their lives.

Rather than a gift, you are opening them up to a huge world of existential turmoil, insecurity around their ability to work, separation and alienation from others, potential  entitlement, and a lot of mental struggles and mental health issues at the expense of keeping more resources that really the rest of the world desperately needs.

So I encourage anyone concerned about releasing capital and letting their descendants down to reconsider, as leaving massive inheritance might not be the gift that you hope it would be.

I meet a lot of clients who would much prefer quality time with their parents over all the material luxury. It’s kind of tragic because I believe the parents were working really hard with the belief they were taking care of their kids but then were unintentionally neglecting them and having their children just basically be raised by other people.

And so most children just want quality time and emotional nurturing from their parents and they want that more than toys and they want that more than money.

That’s really at the core of where we get stuck around wealth redistribution is around parenting and around family. I encourage your readers to just reflect on what type of legacy you really want to leave behind and if that can really be achieved through inheritance.

Exploring generosity

Sarah: I’d love to know what generosity means for you personally, how it either shows up in your life or work, or how you get to tap into your own generosity.

Iris: For me, generosity is doing something that is difficult to do. I don’t feel particularly generous if I buy lunch for someone. It’s a nice thing to do – a gesture. But I more feel generous when I do something that’s genuinely hard. So, for example, my friend went through a really traumatic experience when they got robbed and they didn’t want to sleep alone in their home. So I loaned them my dog. My dog is my emotional support animal. I love her so much.

At the time I was really struggling with my mental health and I really didn’t want to do it. I didn’t want to be away from my dog. But I knew it was important to do. To me, that is being generous — more than doing things that externally look or seem generous. I feel the same way about receiving.

If somebody comes and they’re super busy and stressed but they still make the time to show up for me and to offer me emotional support or to spend time with me, even if it’s challenging for them, I really feel the generosity of that.

I think that that’s what’s hard about what it means to be generous.

When you have $20 million, at what level would you have to give for it to really challenge your life and affect your life? That’s going to be quite a big number, right? And so I think that’s where giving can sometimes get confusing when we’re working with such unfathomably high numbers, because it’s just difficult to give at a level that will actually reflect some type of sacrifice on your end.

Sarah: Your dog example is incredibly generous. When you did such a thing, did you enjoy it? Did you allow yourself to feel the halo of generosity? Because you’re allowed to feel warm and fuzzy.

Iris: I absolutely believe that. I believe in taking in the moment. I usually encourage clients to pause after they donate and just notice what they feel in their body. I have them imagine the communities they’re supporting. With the dog story, if I’m honest, I think I felt a mixture of relief for my friend who I knew was sleeping better, and felt reassured, but I also felt sadness because I missed my dog. But then I got her back. It wasn’t that big of a deal.

Recommended reading

Where next?

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

View

Unleashing the potential of philanthropy and social investment

Author(s)

The All Party Parliamentary Group on Philanthropy and Social Investment

Year

2022

View

Philanthropy Right Now: Stimulating Intergenerational Dialogue

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‘Philanthropy Right Now’ is a monthly opinion column for Beacon Collaborative. It features commentary and thought-pieces from experts working in UK philanthropy. In this month’s column, Marie-Louise Gourlay – Managing Director of Europe at The Philanthropy Workshop – implores us to increase dialogue between older and younger philanthropists in order to achieve real change.

It feels, at least from where I sit, that everything comes back to community.

Those groups that hold you, support you, advocate for you. Yet, a community needs room to pulse, to evolve, to tackle conflict. It needs the opportunity to develop new and better ways forward.

A community naturally comprises multiple identities; it’s those differences, combined with common values, that create discussion and the potential for shared progression.

“You need to know the rules to break them.”

We use frameworks and roadmaps within the philanthropy community to provide a path forward. And, as important as they are, those very same frameworks need to be picked apart. They should act as a springboard for people to build on, as well as to deviate from.

After all, you need to know the rules to break them.

As with any status quo, challenges within philanthropy come in many forms. One of those is the generational line: deep chasms are felt between generations on the issues philanthropy should prioritise, and the approaches & tools that can be deployed.

We’re starting to see new, younger generations of wealth stewards focusing on social change as the ultimate goal. These generations also report being the champions of impact investing within their families, coupled with a drive towards aligning their values and principles across their entire portfolio, from traditional grant-making to for-profit investing.

“We’re starting to see new, younger generations of wealth stewards focusing on social change as the ultimate goal.”

The intergenerational wealth transfer which is already underway (estimated at $3trillion), is now throwing a light on the lack of authentic discussion between younger and older philanthropists.

In our society, there are limited spaces where genuine intergenerational discussion can take place without age playing a role in who is listened to and who is ignored.

Families are often subject to generational power dynamics, with greater respect given to the wisdom (real or perceived) of family members whose lives span more decades than our own. In professional environments, we also experience these hierarchies. Unspoken rules that dictate whose ideas may be taken forward, irrespective of credibility or relevance.

In speaking with funders across a spectrum of ages, I see this issue daily. Some feel that younger family members lack the maturity to see the full picture, that they don’t have necessary experience to make decisions.

And whilst cultures differ from East to West, there is a general acceptance that length of time on our planet can be an indicator of wisdom, prompting the older generation to have the final say.

But younger generations provide invaluable guidance to these discussions. From digital skills to professional nous, younger philanthropists have the abilities and desires that are essential to solve many of our current social issues. Their voice needs to be welcomed into the philanthropy community.

But this social change will not happen overnight. Can we really afford to wait for intergenerational dialogue to reach a level where it’s on an equal footing? Where the voices and perspectives of the next generation can sit alongside those of earlier generations, to reach agreement about how to deploy resources for greatest impact?

“Creating intergenerational parity will be a bumpy (and at times difficult) road, but a road with a shared destination.”

We need to ask ourselves whether we can instead focus on what each generation (and each individual) brings to the table – lived experience, practice and knowledge, coupled with new ideas, bold thinking and a shared desire to do good with our resources.

To make this work, we need to approach conversations in a forgiving way. In a way which understands that creating intergenerational parity will be a bumpy (and at times difficult) road, but a road with a shared destination.

The sector should consider moving away from intellectualising discussions and towards open, vulnerable, humble discussions where the voices of different generations can sit side by side, focusing on pooling our perspectives, not dividing our opinions.

We need bold approaches, and fast. These won’t come from continuing to do things in the same way.

marylou gourlay

Marie-Louise Gourlay

Marie-Louise Gourlay is the Managing Director of Europe for The Philanthropy Workshop. Find out more about The Philanthropy Workshop’s activity here.

Philanthropy Right Now: Agreeing to disagree

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Can we agree to disagree when it comes to philanthropy?

‘Philanthropy Right Now’ is a monthly opinion column for Beacon Collaborative. It features commentary and though-pieces from experts working in UK philanthropy. In this month’s column, Rhodri Davies (Philanthropy Expert in Residence at Pears Foundation) highlights the necessity of introducing nuance into today’s binary philanthropy debates.

Philanthropy, as I never tire of telling anyone who will listen, is a curious and complex thing. At a micro level it is all about the choices of individuals, which are deeply personal and reflect ingrained cultural and ethical values (not to mention a whole host of conscious and unconscious biases).

But at a macro level it is also a key mechanism for the redistribution of resources- alongside the state and the market – so it raises fundamental questions about liberty, justice and what we want our society to look like. 

As a result, there is always the risk of conflict when discussing philanthropy, as it can bring to light deep-seated differences in opinion and ideology. Navigating these challenges requires that we embrace nuance and are willing to at least try to see issues from other points of view.

“There is always the risk of conflict when discussing philanthropy.”

Sometimes we even need to hold multiple conflicting, and quite possibly contradictory, thoughts in our head at one time. This should not be impossible, but in an age of increasing polarisation and polemic it feels increasingly difficult. 

The culture war narratives that have taken hold in the media imagination are part of the problem. They push us to view complex issues in overly-simplistic terms and demand that we “choose sides” based on stark dividing lines, when in reality there are often large swathes of grey area.

These narratives also encourage us to “other” those who disagree with us; seeing them not as people with legitimate different points of view, but as “enemies” with whom we should not even engage. 

Social media is almost certainly another factor here. The economics of the online “attention economy” have created further incentives to simplify complex issues and present them in ways that stoke argument and division to keep us clicking.

“The tendency of social media to create filter bubbles[…] leads us to hold views more dogmatically.”

Likewise, the tendency of social media to create filter bubbles in which our own views are echoed and amplified can leads us to hold those views more dogmatically and to see anyone who disagrees with us as “the enemy”. And these problems may well get worse.

The news that Elon Musk is to buy Twitter, for instance, was greeted with dismay by many who fear that his self-proclaimed love of free speech and his own abrasive public persona herald a new era of further coarsening of the online sphere.

The challenge for philanthropy is that this all comes at a time when it is already having to adapt and evolve in the face of major social, political and technological changes; as well as growing scrutiny and critique of the influence of wealth in our society.

For those of us keen to help that evolution happen, it is more vital than ever that parties with a wide range of views about the legitimacy and role of philanthropy are able to engage productively and in good faith.

The danger otherwise is that rather than the nuanced (but probably not always easy) conversations we need to be having in order to move things forward, we instead get only empty debates that collapse into “philanthropy is good” or “philanthropy is bad”.

And that benefits no-one.

rhodri davies

Rhodri Davies

Philanthropy Expert in Residence at Pears Foundation

Rhodri Davies is a widely-respected expert and commentator on philanthropy and civil society issues. He is the author of Public Good by Private Means: How philanthropy shapes Britain, which traces the history of philanthropy in Britain and what it tells us about the modern context.

 

Following his role as Head of Policy at Charities Aid Foundation, Rhodri is now Philanthropy Expert in Residence at Pears Foundation. He is also working as a Pears Fellow in the Centre for Philanthropy at the University of Kent.

Time, Talent and Treasuring donor relationships

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Jessica Maybanks explains how enabling philanthropists to provide more holistic support of charities will lead to more impactful donor-fundraiser partnerships.

Relationship fundraising is an ever evolving concept, and broadly speaking most charities understand the critical need to engage supporters meaningfully, through a planned journey of cultivation and stewardship.

The donor journey is especially important for philanthropic supporters, who need to build their knowledge of, and trust in, an organisation before they invest at a significant level. However, over time, even the most professional fundraisers can become blinkered, focusing on a rudimentary process of relationship management that involves a conveyor belt of “box-ticking” activities such as: update reports; event invitations; project visits; periodic newsletters; and networking opportunities.

Whilst these offerings are made with good intentions, too often they are undertaken out of habit, and to make fundraisers feel they have fulfilled their end of the bargain when receiving sizeable donations. The truth is, this prescribed method of stewardship, is a generic assumption about donors’ requirements, and not always the best way of truly deepening a relationship, nor maximising value for a charity. Whilst appropriate and necessary in some instances, events can be costly and time-consuming to organise; donor reports can be an additional layer to already rigorous internal controls; and project visits can be distracting for busy field-staff.

“Effective relationships between philanthropists and charities should be based on a mutual desire to achieve set outcomes.”

At international equine welfare charity Brooke, the Philanthropy and Partnerships team has been scrutinising our traditional, planned route of stewardship, looking at ways to create bespoke partnerships that truly consider funders’ desires, but critically, that add value to the charity beyond financial support. Asking key supporters who were already giving at exceptional levels for further assistance (albeit non-financial) initially felt uncomfortable.

This was perhaps exacerbated by an entrenched, cultural belief that social return is in some way less valuable than financial return, thereby leaving the beneficiary feeling indebted. To create true partnership, inherent power imbalances need to be put aside, and social return/impact truly valued, and recognised for the critical importance it plays in effecting transformation. In summary, effective relationships between philanthropists and charities should be based on a mutual desire to achieve set outcomes, whilst exploring the most effective ways of doing so together.

“We were knocking on an open door when we embarked on conversations about how individuals could help beyond their financial contributions.”

And at Brooke, it was the fundraisers, not our philanthropic partners who needed to adapt and discard traditional ways of working. The charity operates with animals and people in some of the poorest communities in the world, and our supporters tend to mirror our own personality and values: they are compassionate, respectful and humble, and donate exclusively to make a positive difference. As such, we were knocking on an open door when we embarked on conversations about how individuals could help beyond their financial contributions. The strategy started with a comprehensive analysis of organisational needs, involving conversations with various departments.

Examples of sought-after opportunities included:

  1. Campaigning: Asking well-connected individuals to support the launch phase of a new campaign.
  2. Trusteeship: Utilising Board members with specialist skills for some of our international programmes.
  3. Hosting: Patrons acting as hosts for Brooke-led events, as well as opportunities to piggy-back third-party led events.
  4. Media: Help with achieving high-profile press coverage.
  5. Ambassadors: Speaking opportunities at target events, and to target audiences.
  6. Advocates: Influential figures to promote our advocacy and policy messaging.

Within a twelve month period of setting up one-to-one meetings with some of our key supporters (on Zoom or, where possible, face-to-face), all of these needs were met in some way.  Indeed there was an overwhelming enthusiasm at having been asked to act on behalf of the charity, as one of the “home team”. The briefing sessions and preparation that ensued meant that philanthropic supporters became personal champions of Brooke’s work. They shared in challenges and frustrations, but also the highs of: introductions working out; events going well; or new opportunities coming to fruition.

Whilst fundraising is undoubtedly tough, there is a joy that accompanies success, perhaps even more so in the philanthropic sphere, where positive results can be transformational in terms of what a charity can achieve. Sharing in these moments of elation with supporters who have personally invested in the outcomes has resulted in far deeper affinity with the cause, and a far superior understanding of our work than any glossy report or newsletter could ever achieve.

Jessica Maybanks

Jessica is a Philanthropy and Partnerships Advisor at Brooke.

Government, Community, Philanthropy: a three-pronged relationship for social good.

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Andrew Watt explores a three-pronged relationship for social good.

It’s hard to look at any social, political, religious or artistic initiative at any point in our history and not find that philanthropy or philanthropists have been part of it. As drivers, facilitators, partners and investors.

Yet when you read the accounts, whether historical or current, it’s hard to see that recurring theme reflected.

“Why is philanthropy so little considered?”

It’s not often that philanthropy stands alone. At its most effective it’s a partner of government and communities, without whom it could not achieve its aims. Equally, without philanthropy as a driver of ideas, many initiatives of government would simply not get off the ground.

So what does philanthropy provide so consistently that has ensured its continued role? And why is philanthropy so little considered?

Philanthropists are creative. In their personal and professional lives, they are often entrepreneurial, willing to undertake strategic risk to get things done – and accepting that failure, while possible, also brings opportunities to refine and redefine in its wake.

“The dynamism of philanthropy is part of its DNA.”

Philanthropists are driven to make change or intervene to secure impact. It’s not the process but the outcome that matters. Indeed, undue focus on process is one of the reasons that philanthropists take action or intervene. It’s the catalytic aspect of philanthropic action that can drive government and community engagement.

The dynamism of philanthropy is part of its DNA. A strong and strategic partner in government can bring long term sustainability, structured partnerships and funding to the table. Engaged community partners ensure a sense of ownership and relevance. Separately, much can be achieved: together, the impact can be transformational.

If you look around the UK it’s not hard to find examples of this. The regeneration of coastal towns such as St Ives, Folkestone and Margate; projects in Bishop Auckland, Gloucester, Nottingham and many others show the combined impact of creative philanthropy, local government investment in strategic infrastructure and delivery by communities coming together to achieve extraordinary, lasting social and economic change.

In all these cases employment, education, transport and health services have been critical. Government sponsored programmes of investment and local authority support have been essential. None of the outcomes in these areas could have been achieved without the active participation of the state. But all of them share something more – an indefinable sense of well being that derives from the human aspect brought by community engagement and philanthropy.

“Any act of philanthropy is ultimately the result of the passion, drive and perspective of an individual.”

Armenian venture philanthropist, Ruben Vardanyan, has invested in strategic aspects of the infrastructure of Armenia for many years. His intention (and that of his partners) has been to arrive at a tipping point that enables Armenia to look to a sustainable future and successful growth.

But what he has identified along that journey is that, for a community to truly thrive, its members have to have a sense of happiness and wellbeing beyond what derives from social and economic security. Indefinable, yes, but something that government programmes and state sponsored initiatives could not provide.

That human dimension is a critical aspect of philanthropy. Any act of philanthropy is ultimately the result of the passion, drive and perspective of an individual. In conjunction with members of communities (of experience, of interest, geographic or social) success derives from human qualities; intelligence, passion, pragmatism. Individuals form a critical part in driving government action and policy – but policy is not personal. It may be strategic but it’s not intended to be engaging.

“The individuals responsible for developing government policy need to have an understanding and appreciation of the power of philanthropy.”

Policy provides a framework. Strategic investment builds platforms and sustainability. And this is where government is a key partner to philanthropy. By building in conjunction with the entrepreneurialism and flexibility of philanthropic and social capital, government intervention can hope for far greater success.

For this to happen the individuals responsible for developing government policy need to have an understanding and appreciation of the power of philanthropy – and its complimentary rather than conflicting role in relation to government strategy.

Initiatives driven by social and philanthropic investment have an inherent nimbleness and flexibility that statutory programmes don’t. If changes need to be made, they can be enacted rapidly. If one approach fails, a line can be drawn, lessons learned can be applied and another developed.

As a recurring element in successful change and impact, philanthropy needs to be considered as a core driver by government. Its potential should be a factor on the table in every government strategy unit.

“If philanthropy is to be effective, government departments need to be consistent in policy and approach, understanding the wide benefits of philanthropy.”

Civil servants and politicians need familiarity with examples of philanthropic partnerships that have driven and delivered change in communities. Philanthropy is part of the bank of assets to be drawn on. Beyond familiarity, what can government do to encourage philanthropists to engage as partners? 

A key is to recognise the need to harmonise government policy towards philanthropy itself. If philanthropy is to be effective, government departments need to be consistent in policy and approach, understanding the wide benefits of philanthropy. 

The proposal being made as part of the work of Pro Bono Economics (proposed in Beacon Collaborative’s 2021 research) represents a pragmatic approach to achieving a joined-up understanding of the value of philanthropy and consistency across strands of government policy and departments.

To have one individual – a “philanthropy commissioner” – working across departments and highlighting added and tangible value deriving from philanthropic and social investment could be transformational. It also has the advantage of being both affordable and sustainable.

Understanding what philanthropists need to support their engagement and helping to implement an effective regulatory platform that underpins and does not constrain philanthropy is critical. 

Philanthropic capital typically represents a relatively small percentage of total wealth in financial terms: in emotional terms, however, it represents what is most important to an individual or their family. Philanthropic capital is generally managed from the same platform as a family’s main wealth – so, in terms of self-interest, the benefits to the UK in attracting philanthropic capital and investment could also be significant.

“Partnerships between philanthropy, government and community are complex […]but have the capacity to deliver sustainable impact.”

In short, partnerships between philanthropy, government and community are complex, as are the benefits deriving from them. But, when successful, the outcomes of those partnerships are not only transformational but additionally have the capacity to deliver sustainable impact beyond the cycle of one or two successive terms of office. In some cases, over many generations.

The question, surely, is why, with so many examples of success, we can’t secure more?

Andrew Watt

Director of Third Sector Strategy

Andrew Watt is a director of Third Sector Strategy, a consultancy serving the needs of the third sector in policy, communications, strategic development, community engagement and advocacy.

 

Andrew’s career has been in the social sector for 25 years; in his professional capacity and as a volunteer. His various roles have seen him advocate for fundraising and resource mobilisation across the globe: in Westminster, Brussels, Ottawa and Washington DC., building partnerships, convening and facilitating essential debate.

Philanthropy Right Now: Frameworks for confidence

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‘Philanthropy Right Now’ is a monthly column for Beacon Collaborative by Marie-Louise Gourlay, Managing Director of Europe for The Philanthropy Workshop. In this month’s column, Marie-Louise Gourlay considers the importance of clear frameworks for donors on their philanthropic journey.

Next month we’re bringing together the TPW community for the first time in two years at our Global Summit in Toronto. It’s not been without critical decisions on how best to ensure that we can come together safely and with purpose.

As Covid-related restrictions lift, people are looking to us to provide clear instructions about how to interact, what to expect, and how their needs are going to be met. There’s a sense that failing to do this may leave people without a set of parameters to operate within.

If you don’t meet the tacit group codes and norms, a sense of belonging can be elusive, destroying the potential for a successful gathering with lasting impact.

Without mandated guidelines, it’s up to one’s own interpretation and comfort level as to how to act. As this varies from person to person, it can create a deep sense of discomfort and mistrust of those around you.

When the UK entered its third lockdown early last year, I read the book ‘The Art of Gathering: How we Meet and Why it Matters’ by Priya Parker. A lasting takeaway was the need to be intentional about how we come together – not just in terms of content, but in creating a space where everyone feels they can belong.

Parker puts forward the notion that we need to switch ‘etiquette’ for ‘rules’. Etiquette can be exclusive – if you don’t meet the tacit group codes and norms, a sense of belonging can be elusive, destroying the potential for a successful gathering with lasting impact.

Rules, however, can be clearly stated, enabling people to know what the expectations are, and setting the scene for different groups to come together meaningfully.

Providing a framework, whether for gathering, for philanthropy or for anything else, is a necessary starting point to orient anyone in a forward direction. And having established rules – even if you choose to deviate from them – gives you that starting point; a shared understanding, a springboard.

We’re often asked, “can you just give me some tools?’, or ‘where can I find online guidelines for philanthropy?’.

Often, when people are at an early stage in their philanthropic journey, there can be much trepidation, coupled with low level self-confidence. We’re often asked, “can you just give me some tools?’, or ‘where can I find online guidelines for philanthropy?’.

Whilst the desire to create impact is usually there for new donors, there’s an underestimation both of the time and the complexity of societal systems.

This can mean that some well-intentioned potential philanthropists fall at the first hurdle. It all seems too much; too long; too complicated. And that’s what we, within this sector, need to address.

There’s a journey that all individuals – irrespective of the size of their philanthropy – have to go on, to understand our own role, our personal values and what’s driving us. To explore where and when we can contribute and where and when we should step back and cede power to enable impact.

There’s a journey that all individuals – irrespective of the size of their philanthropy – have to go on.

Conterminously, the sector needs to ensure that we are creating, driving and sharing frameworks and best practice across all of our organisations.

We should be enabling people not only to have a starting point they can launch from, but continued guidance about what works throughout their philanthropic journey.

Complex theory lacking in practical examples, compounded by the jargon that we all use (coming back to tacit understandings, and a sense of exclusion if you don’t ‘speak the language’) is not going to help.

I know I do it – use words that one hopes make one sound like an expert, but in reality, we’re missing the target, building barriers where there should be bridges.

A simplification of the world of philanthropy would be very welcome, bringing an evolving & relevant understanding of how we come together and how we collaborate; one in which we can each take a seat at the table, knowing that everyone’s perspective is vital & different.

[We need to] develop frameworks and guidance which are accessible for all.

We need to step forward confidently and develop frameworks and guidance which are accessible for all. In doing so, we can make use of the multiplier effect of community and collaboration to change systems exponentially.

marylou gourlay

Marie-Louise Gourlay

Marie-Louise Gourlay is the Managing Director of Europe for The Philanthropy Workshop. Find out more about The Philanthropy Workshop’s activity here.

How many potential philanthropists are there in the UK?

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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.

Levelling-Up | Why we need to engage philanthropists.

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levelling-up and philanthropy header

In this article, James Macdonald reflects on the Levelling-Up white paper, how the flagship project will be financed, and the vital role philanthropists can play in helping to support left-behind communities.

On Wednesday, the Government unveiled its long-awaiting Levelling-Up white paper. Michael Gove – Secretary of State for Levelling-Up, Housing and Communities – introduced the paper in the House of Commons with a reality-check:

“While talent is spread equally across the United Kingdom, opportunity is not.”

Among the paper’s flagship policies are:

  • Devolution – that every town or city which wants devolved powers can have them;
  • Research & Development – a 40% increase in public funding for R&D outside the South East;
  • Transport – the development of local transport networks resembling those in London.
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“This is not about slowing down London and the South East,” claimed the Minister, “it’s about rocket-boosting every part of the UK.” He even went on to say that a more productive North would alleviate commercial pressure on the South.

For her part, Lisa Nandy – Gove’s shadow on the opposition bench – took him to task on the last 12 years of Tory rule.

She suggested that many of the issues Levelling-Up claims to address were actually caused under successive Conservative governments.

Nandy also lambasted what she saw as a homogenous approach to development: “Not every part of this country wants to be the same; we have our own identities.”

But despite political posturing on both sides, one question seemed to remain unanswered: How will it all be funded?

READ: Levelling-Up white paper

No new money?

Levelling-Up is not short of ambitious ideas. But ideas cost money, and the paper’s commitments run into the billions.

However, on release day it was reported by the Treasury that no new money would be put towards delivering the paper’s commitments. Providing clarity, Gove implored us to remember the new Levelling-Up funds allocated at the recent Spending Review 1.

His response has done little to convince economists, who argue that “without more funding to make it achievable, the 12-point mission statement outlined in the White Paper is little more than a vision.” 2

Broadening the search.

If the Spending Review allocation is insufficient to convince financial experts, where else will we find the money to Level-Up?

Well, the upcoming increase in National Insurance is set to raise an extra £12b per annum. A good start. However, this money has already been ringfenced to alleviate pressure on the NHS, in the first instance 3. We can therefore rule-out this windfall.

Beyond this, Gove’s speech implied that new money would be generated from the delivery of the project itself:

“If underperforming places were levelled-up towards the UK average, unlocking their potential, it could boost aggregate UK GDP by tens of billions of pounds each year.”

The idea of cyclical and self-generating investment is exciting. But, of course, this will only appear once the project is underway. What we need is money now.

Philanthropy – the untapped pot.

The Levelling-Up paper is 332 pages in length. For all its talk of ‘unlocking’ new opportunities (40 mentions), it makes just one passing reference to the role of philanthropy.

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Image: Levelling-Up the United Kingdom, page 24.

At Beacon, our research demonstrates that successfully engaging philanthropists can unlock an extra £2.5b per year in civil society funding. You don’t have to look far to see philanthropists already committing their time and resources to improve left-behind places:

Our Common Good: John Nickson and Paul Donovan created Our Common Good to reignite Britain’s philanthropic tradition. Its aim is to leverage the money, networks and knowledge of wealthy individuals to catalyse social change in some of the country’s most excluded communities. Pilot schemes are currently working to drive community development in Oxfordshire’s poorest areas, supporting them to become self-sufficient and to prosper. Following a successful start, the duo plans to duplicate this model in other left-behind areas throughout the country.

Law Family Commission on Civil Society: Andrew Law set up the Law Family Commission – run by Pro Bono Economics – over a decade ago. Funded philanthropically, it exists to research the development of a strong civil society in the UK, providing policy recommendations to achieve this. Last year, its research found that only 1 in 10 people wanted Levelling-Up to be shaped by the central Government – something which informed the Levelling-Up agenda. Throughout 2022, the Commission’s work will in-part consider how philanthropists can help to boost civil society in left-behind areas.

Currently, it is only a handful of trailblazing philanthropists like these who are using their private resources to rejuvenate communities. And they’re doing it of their own accord – not in response to a ‘call to action.’

As charities who successfully fundraise from major donors will attest, support from these individuals has a multiplying effect. Philanthropic money can play a complementary role in community development.

Private donations are not accountable to the public purse, meaning charities and community organisations can use them for innovation, not just service provision. Innovation which can unlock greater efficiency and effectiveness.

Additionally, we should remember the skills, resources and networks of wealthy givers – many of whom are industry leaders in business and commerce. Beacon is currently at the initial stages of a ‘diaspora project’ encouraging individuals like this to contribute their money, time and skills back to their hometowns in pursuit of community development.

The early signs from our pilot in Stoke-on-Trent are incredibly encouraging. Imagine the extra resources a concept like this could bring to Levelling-Up if promoted by the Government around the country.

To borrow Gove’s phrase, philanthropists can help to “rocket-boost” the Levelling-Up agenda. But at the moment, they’re not being engaged. If we want to see a trend of wealthy individuals using their money to support left-behind neighbourhoods, the message needs to come from the top.

The Government needs to communicate to wealthy individuals the pivotal role their money can play in levelling-up the country. If we leave wealthy, socially-conscious individuals unengaged, we might leave billions of pounds sitting in bank accounts, rather than being used for public good.