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#GivingTuesday: More money isn’t the (only) answer

By George Hoare 1 December 2015

Private giving to charities added up to £10.6bn last year. This has been pretty consistent year on year for a while now—even through the darkest days of the recession, the amount the British public gave away to good causes stayed remarkably stable.

So we head into Giving Tuesday with charity giving in seemingly good form. Which is welcome, naturally, but it also misses the point a little.

Getting more money into the charity sector might be a nice idea, but it isn’t an end in itself. (Indeed, some of the sector’s recent fundraising problems might be seen to flow from forgetting this fact). What matters above all is how the cash is then used. An extra million pounds invested into doing social good sounds great, but if it’s used unwisely, or even wasted, then it doesn’t actually add up to much at all.

This is how we get into impact, the topic closest to NPC’s heart. If you want to give money, how can you make sure it does as much good as it can? Our work with major UK philanthropists, some of them looking to donate millions to causes they care about, shows us that this is no easy task. Finding charities which can absorb and use big donations can be a challenge in itself. But there are a few novel approaches that seek to address the challenge of giving for impact:

  1. ‘Philanthropy school’. One new worldwide trend in philanthropy is to make it part of education. In the UK this takes the form of the new Marshall Institute at the London School of Economics, which from 2017 will teach an MBA-style course for individuals who want to learn about smart charitable giving. As my colleague Sarah Hedley told the Guardian: ‘Lots of philanthropists—especially the new generation who have built successful businesses—want to apply the same kind of thinking to their philanthropy as they do in their business life.
  2. ‘Effective altruism’. This philosophically-inclined movement has one of its main centres in Oxford at the Centre for Effective Altruism. Effective altruism updates for the twenty-first century the nineteenth century moral philosophy of utilitarianism—broadly, the idea that the best moral action is the one with the best outcomes for the most number of people. One of the areas in which effective altruism applies this doctrine is individual career choice: its 80,000 Hours project advises the curious on how to plan their career for the optimal social impact. Interestingly, the claim here is that maximising impact may involve taking a highly paid job in the financial services industry and giving a proportion of your income away, rather than working directly for your favourite charity.
  3. Philanthropy theory of change. At NPC, we are trying to understand better what makes philanthropists give away their money, and how that giving can be more effective. The final goal is more and better philanthropy. Along the way we’re helping influence different donors on a journey from the simplest charitable giving to a strategic focus on their impact.

All three take different and, in some cases, controversial approaches to the issue of impact. And it remains to be seen just how well such attempts will really change the field of philanthropy towards more effective giving. What matters is the attempt to encourage philanthropists to think more about how they can make a real impact on important social issues.