The concept of voluntarily giving something to help others may be as old as civilisation itself. The later development of the concepts of the ‘common good’ and philanthropy help to underpin shared notions of identity and self-worth and to define the way we see ourselves as a modern society.
One only has to recall the acts of charity that arose during and as a result of the Covid-19 pandemic for recent evidence of the essential link between concepts of generosity and the British idea of identity and community. We have a sense that we are a generous country.
Yet the stories we tell ourselves do not always match the stories others tell about us. This year’s Charities Aid Foundation’s World Giving Index, charting global trends in generosity, has found that the United Kingdom has fallen out of the top 20 most generous countries towards charities for the second time since the index was first compiled in 2009. Given the importance of the charity sector to the UK economy and in wider civil society, particularly at a time of strain on the public purse, one could be forgiven for thinking that there is cause for concern.
Despite the apparent gloom, a report published last month by the charity Pro Bono Economics signals room for hope. Its research reveals that the wealthiest people in the UK in fact have wealth to spare and that they may be willing to give an extra £2.8bn to good causes each year.
The catch? Those potential donors need advice, which they rarely if ever receive. Philanthropy, as we now understand it, has lain at the heart of civil society for hundreds of years but the concept of advising on it is comparatively new. Nowadays the practice of advising on philanthropy is growing, and a recognised discipline is emerging, influenced in part by trends emanating from the United States.
On the other side of the Atlantic, vast networks of public-private partnerships, foundations, charitable trusts, donor-advised funds, sophisticated private donors, and other community-specific organisations have a longer history of filling the gaps in civic life where the state does not venture. If those with wealth in the UK could be encouraged to leverage their wealth in the most appropriate ways for their circumstances by their advisers, the report concludes, the total contribution to Britain’s third sector could substantially increase.
Solicitors, wealth managers and accountants should have the knowledge to be able to guide their clients as potential donors, helping them to decide on the right way to give, based on what suits them and the causes they want to support. That group of advisers, often working together, can help them further to identify financial incentives to giving if appropriate, such as the UK Gift Aid Scheme which allows both the registered charity recipient and some donors to claim money back from HMRC for direct cash donations.
In the 2020-2021 tax year, Charity Finance Group estimated that a quarter of all eligible donors neglected to claim Gift Aid, leaving approximately half a billion pounds in unclaimed charity revenue. Given the untapped potential of a single scheme already in place, consider the possibilities of developing a creative, informed, and advised future for UK philanthropy.
Donors, their advisers, and charities need a framework and the support of those in power to do this. Several prominent think-tanks have recently suggested the introduction of a national philanthropy strategy. This might involve the appointment of officials responsible for encouraging philanthropy; the expansion of the regulatory framework, perhaps through the introduction of compulsory training for professionals; and the possible further incentivisation of giving through the tax system. There may be much else about which we can be pessimistic, but, with the right support and advice, we can take action to enrich civil society as the generous nation we always have been.
