Philanthropy in United Kingdom

Much of what is now happening in the UK in philanthropy has already happened in America, where venture philanthropy and social enterprise have well-established roots.

An excerpt from the Independent article.

“The co-founder of Microsoft, Paul Allen, is planning to give most of his $13.5bn (£8.8bn) fortune to charity after his death, on top of the $1bn he has given away in the past 20 years. Mr Allen revealed his intentions in response to a call in May from fellow Microsoft founder Bill Gates and investment guru Warren Buffett, urging US billionaires to pledge to give away half their wealth.

“British philanthropy took a significant hit from the recession, with total donations down by 11 per cent last year and pledges of £1m or more falling 13 per cent. But if the Gates "giving pledge" was heeded by all of the UK's billionaires, it could yield up to £60bn.

“Even in good times, British philanthropy is a shadow of that in the US, where benefactors are both more upfront about giving, and simply do more of it. However, the situation is changing.

“Theresa Lloyd, an expert adviser on philanthropy, said: "The idea of an obligation to fellow citizens and future generations is very powerful in the US, whereas here it is not. But things are changing, and over the next 10 or 20 years will change even more."

“The character of philanthropy itself is also changing. In 1989 three-quarters of Britain's richest people had inherited their wealth; by 2009 the same proportion had made it themselves. As a result, philanthropy is moving away from traditional trusts and towards a more entrepreneurial approach.

"The division between philanthropy and business is blurring, powered by philanthropists who are self-made and have a very active approach to bringing about social change," said Cheryl Chapman, the managing editor of Philanthropy UK, a government-funded project of the Association of Charitable Foundations.

“One such case is the "Big Give", set up by the Reed Recruitment founder Alec Reed, which links donors to relevant causes and offers match-funding. Another is the Fifteen Foundation, set up by Jamie Oliver in 2002 to train other chefs from disadvantaged backgrounds. Charities themselves are approaching fund-raising with a different attitude. The disability organisation, Scope, launched Britain's first private equity-style financing for the voluntary sector last month, under which donations of £1,750 and a three-year loan of £7,000 can be ramped up to £18,000.

“An industry is also developing to help potential philanthropists ensure their donations are as effective as possible. New Philanthropy Capital, a think tank and advisory service, was set up by two former Goldman Sachs partners who spotted that the mass of data available to mainstream investors had no parallel in the third sector. And Coutts, the private bank, has recently launched an advice service for clients wanting to get involved with social enterprises.

“The rise of self-made wealth is also boosting interest in education projects, says Salvatore LaSpada, the chief executive of the Institute for Philanthropy. "Many of our great entrepreneurs came from humble backgrounds and want to use their wealth to create opportunities for people coming behind them," he said.”