How the UK government should improve philanthropy, Part 1

We recently ran a series of blog posts aimed at the new British Minister for Civil Society, Nick Hurd MP. These outlined a number of steps to improve charitable effectiveness. We hope they are being considered inside the Office for Civil Society.

In this new series of posts also aimed at Nick Hurd, the focus is on how government can help to improve philanthropy and charitable giving.

It seems to me that anyone interested in raising charitable giving in the UK needs to focus first on two problems. First, wealthy people do not give as much as they could (and perhaps should). While there has been greater focus in recent years on wealthy giving, this has not yet yielded any profound increase in levels or effectiveness of giving. Second, in the country as a whole fewer people are giving at all. The most recent figures show just 54% of people give to charities, down from almost 70% a decade earlier. The decline is equivalent to almost one in seven of the population stopping giving. It does not seem melodramatic to characterise this as a crisis in giving. (A stable level of giving as a share of income can be reconciled with this trend by the fact that the average size of donations is going up.)

One issue that exacerbates this problems is charities’ difficulty in articulating and communicating the results of their work. This makes it harder to inspire donors to give. But that was the focus of the first series of posts. Tackling low levels of giving directly requires a different, additional set of measures.

The first idea is simple and builds on existing work. In order to promote giving by wealthy people, it could be helpful if philanthropy advice was offered as part of standard financial planning, legal advice and accounting services. Such advice is already growing but could be boosted further, as NPC argued in a report The business of philanthropy. This report led to the establishment of a steering group to look for ways to improve and grow philanthropy advice. The steering group is chaired by the UK’s ambassador for philanthropy, Dame Stephanie ‘Steve’ Shirley, who was appointed by the previous government.

Currently, the Office for Civil Society provides practical, administrative support to this steering group. The Minister should bolster the support his government provides to this field by encouraging private banks, law firms and others who service wealthy people to integrate philanthropy advice into their offering.

This step was recently taken by the Irish government who announced a five point initiative to promote philanthropy. One element of this is “support the development of an infrastructure in relation to giving”. In a speech to introduce the initiative, the Irish Minister, Pat Carey, said:

“the Government is committed to ensuring that: … donors can access well informed wealth advisors and other intermediaries—including legal, accountancy, tax, banking, pension and investment professionals.”

The British government should follow the lead of the Irish government and work to push philanthropy advice into the mainstream. The means to pursue this end already exist in the steering group and its members.

We’d like to see the minister roll his sleeves up, and work in partnership with the private and charitable bodies (including NPC) already active in this sphere to explore how government can help. The collective energies and effort of everyone involved has the potential to unlock latent demand from rich people for help on their giving and, in turn, increase levels of giving.