Philanthropy Review’s call to action for UK giving

Philanthropy Review’s call to action for UK giving

Thomas Hughes-Hallet and Rowena Lewis provide analysis of the Philanthropy Review’s recent report on giving in the UK, and offer some suggestions for building a stronger giving culture


On Tuesday, 21st June 2011, the Philanthropy Review issued a call to action to encourage more people to give, and to give more. Here we share our journey, our learning and our proposals to build a stronger UK culture of giving.

In November 2010, a group of philanthropists, business leaders and leaders from the charity sector came together with a shared objective – to grow the overall levels of giving in the UK. Our aim was to help build a stronger culture of philanthropy that will support charities at the forefront of delivering vital services and driving social change.

In the past few months, over 200 individuals and organisations have shared their experiences and ideas with us. We have heard from those who give and those who fundraise; those who advise the wealthy on their giving; and business leaders with the power to foster giving workplaces.

 

What we found

As fundraisers, it will come as no surprise to hear the first learning point was that ours is already a generous nation, founded on a rich heritage of philanthropy. Last year alone, individuals in the UK gave nearly £11bn to charitable causes due in no small part to the exceptional work of the fundraising community.

But so much more can be done to encourage people to give more. Ours is an action-orientated initiative. Keen to engage others in our work, we have published our report A call to action: to encourage more people to give and people to give more as an invitation to all those with the power to make more giving happen to join us in taking action in the following areas.

 

1. Making it easier for people to give

Fifty-six per cent of adults give to charity in an average month, but what about the others? If we want to encourage more people to give we will need to offer more opportunities to integrate giving into people’s daily lives. While the Giving White Paper is rich with new opportunities for people to make frequent and spontaneous gifts – for example, through giving at cash machines and ‘round pound’ schemes – we also need more opportunities for people to make regular and considered gifts.

We believe that payroll giving and the integration of charity bank accounts with mainstream personal banking are two ways that we could encourage more people to make regular considered gifts as part of their day-to-day lives.

When payroll giving was first introduced in 1987, it presented a unique opportunity for people in work to make regular gifts to charity in a simple, tax-effective way. But 30 years on, payroll giving is so under used it’s embarrassing. Less than one per cent of employers offer a scheme. Fewer than 800,000 people choose to give in this way and just £100m comes to charity through payroll giving each year, which is less than some of the major charities turnover in a year. Meanwhile in the US some 35 per cent of the working population gives via payroll. If we could achieve the same giving levels in the UK that would mean just under a billion pounds coming to charity each year.

Key to harnessing the potential of payroll giving is leadership, but so few chief executives know about these schemes. So, we have challenged leaders from the world of business, the public sector and charities to take the first step by signing up for payroll giving themselves, ensuring schemes are available in the workplace and promoting payroll giving to their employees. Leadership is just one piece of the jigsaw when it comes to making payroll giving work. Therefore it is so important that others, including the Institute of Fundraising and government, continue to address other barriers to success.

Right now in the UK there are 150,000 tax-effective charity accounts managed by specialist providers such as the Charities Aid Foundation, and £190m each year is given to charity through these accounts. But what if each of the high street banks offered their clients a charity bank account alongside their current and savings accounts? This small change could revolutionise the way people donate by making giving to charity much more a part of an individual or a family’s daily personal financial management.

 

2. Harmonising tax relief to encourage giving

We believe that those who earn less give more of their income to charity than those who earn more Only £2 of every £1,000 earned by those on salaries of £200,000 per year goes to charity, whereas the comparable figure in the US is £90. But it is these individuals who have the greatest capacity to change the fortunes of our society.

The number of higher and additional rate taxpayers will increase by 18 per to four million people in the UK in 2011/12. This means that the need for simple, harmonised fiscal incentives to encourage tax-effective giving is now more important than ever.

However, it is currently more tax-effective to give shares rather than cash, and more tax-effective to give in death than in life. The donor benefits of Gift Aid are also widely misunderstood. We found that 26 pr cent of those with over £100,000 of investable assets are not even aware that they can claim a tax rebate on charitable donations.

The government can and should do more to harmonise tax relief so that families can make substantial gifts in their lifetime, through a living legacy model. This will also enable charity fundraisers to build stronger relationships with high value donors and access their circles of influence. They will have the means to know for sure when a legacy will be left to their charity and to benefit from a regular income from these assets during the donor’s lifetime. The asset rich will be incentivised to give assets of value to any charity; and there will be more incentive for the wealthy to make significant cash gifts.

 

3. Changing the culture of giving

There is a very real possibility that we are facing a decline in the giving population. Our concern that giving might be becoming a minority sport is reinforced by a recent study, which suggests that fewer people are giving today than thirty years ago. If the number of people giving to charity really is on the decline then this is the time to take action not only to preserve, but to build our giving culture, by celebrating and normalising giving in the UK.

Where better to start than with the children and young people of today who will be the givers of tomorrow? Right now in the UK, over a quarter of a million children and young people are engaged with charity and are provided with ‘giving education’ programmes at school. These programmes are already showing positive outcomes with 69 per cent of pupils taking part in the Youth and Philanthropy Initiative feeling better equipped to make a real difference in their local community. We want to see all children and young people involved in these programmes, learning about the difference a gift to charity can make. So we were pleased to see that the Government has announced a new match fund for giving education in the Giving White Paper and now the onus lies on philanthropists and on foundations to match this investment in the next generation of donors.

But what about today? Fundraisers are under increasing pressure to source funds for charities feeling the squeeze, at a time when they are most needed. We believe more can be done to celebrate our status as a giving nation and to encourage those who can to give more at a time when charities need it most. For this reason we are committed to backing a national ‘Give More’ campaign. This will launch later this year to encourage people from across society to act as giving champions and to give more to their chosen causes if they can. As several charities have already suggested, this could present an opportunity for fundraisers across the UK to use the campaign as an uplift ask to their donors.

If action were taken to enact each of our proposals today, an extra £2bn of additional charitable income could be generated annually from as early as 2015. Now the work begins in earnest. We want to preserve and strengthen the UK giving culture; to introduce new mechanisms to make it easier to give; and to harmonise tax incentives so that more people (particularly those with the means) are encouraged to give more.

Members of the Philanthropy Review Board have committed to pursuing these goals and we invite you to join us. The Institute of Fundraising will shortly launch an online community at www.institute-of-fundraising.org.uk for fundraisers to share their views on philanthropy including the Philanthropy Review’s call to action.

 


Thomas Hughes-Hallet is chief executive at Marie Curie Cancer and chair of the Philanthropy Review.

Rowena Lewis is project lead for the Philanthropy Review.

This article first appeared in The Fundraiser magazine, Issue 7, July 2011

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