Should a Labour government care about philanthropy?

Centre-left politics is about doing what one can to give everyone a fair chance. In this context, philanthropy—rich people giving away money—is usually not of much concern. The usual progressive response to such largesse from the rich is to tax their wealth more fairly. But while that strand of thinking will always be present, with some high-net-worth individuals actively campaigning for it themselves (such as  Patriotic Millionaires UK), it should not be all that Labour thinks.   

One way or another, philanthropy provides the funds for many things that a Labour government would want to fund but find difficult to do so—and that is not just because money will be tight.   

Firstly, a thriving civil society is the backbone of many communities, delivering social capital, supporting those who fall between the cracks in the system, and contributing greatly to the nations wellbeing. It is better in many ways at delivering certain services, especially to vulnerable people who find it hard to trust people in positions of authority (such as social workers, teachers, and police officers). In short, a properly funded civil society would help Labour to deliver on many of its 5 Missions.  

One of these missions is about achieving good growth in all parts of the country—what the current government calls the Levelling Up agenda. Place-based philanthropy can greatly help in delivering spatial equality, surely a major aim for a Labour government.  

In the UK, we have fewer rich people giving back to the (often pretty poor) towns that they came from, when compared to countries like the USA, but we do have some. And local community foundations often do a great job of directing this type of philanthropy, linking up funding support with local councils and other actors . Labour should encourage them and think about how we can facilitate successful community foundations in areas where they do not exist or function as well as they could. 

Civil society organisations need funding. Sure, more funding could (and should) come from the state, either directly from Westminster (or Edinburgh or Cardiff), or via local authorities, health bodies, and contracts (ideally ones that actually pay the full costs). But even if the money were available, and civil society organisations were all funded by the state, it would not be the fiercely independent sector that it is and that any progressive should want— even if governments are never 100% enthusiastic about that! Some charities can raise money directly from the public, but most cannot, relying largely or partly on donations from philanthropists, independent grant-makers and so on.  

Secondly, philanthropy can often take risks that those in charge of public spending feel unable to. We can argue as to whether the public sector is too risk averse and the reasons for that, but I don’t see that changing much. So, if you want to try a new method of helping kids at school, dealing with mental health, or reducing re-offending rates, then getting initiatives funded by philanthropy to test their effectiveness makes a lot of sense. 

Thirdly, the state will always have an endless list of competing priorities to fund and not enough money to go around. Philanthropy can fill the gap. And, yes, that does include funding art exhibitions and buying paintings for the nation, but also supporting niche services for particularly vulnerable groups. 

So, Labour should not shun philanthropy or ignore it. That does not mean that it needs to give more tax breaks to encourage such philanthropy—issue of fairness aside, it is not clear whether it really works, because the costs of the tax break is often not outweighed by the extra money given. But to give some attention to philanthropy, for instance to have a ‘champion’ in a key role (not hidden away in international trade), makes sense. If a Labour government shows it is not against philanthropy, and in fact actively encourages it, a lot could be achieved.