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

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

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. 

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. In the image below, the four priorities are on the left in blue.

A table showing the activities needed to grow giving in the UK

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.

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.

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