Spending your jackpot wisely
23 February 2011
Everyone dreams of winning the lottery. I, for one, am well practised in spending my jackpot. If (when) I win, I’ll buy a few luxuries, I’ll give some to friends and family and I’ll give a sizeable amount to charity.
It turns out most people think like me. Research completed by Ipsos Mori in 2002 finds that, amongst those winning £1m or more, their first purchase is usually a car, and their biggest purchase is usually a house. But here’s the interesting bit: “two thirds give up to 10% to charity”. Since the Lottery has given out a dizzying £37bn in prizes since its launch, that’s up to £2.4bn since 1994, or an average of £152m each year. Daydreams aside, when suddenly faced with a fortune, how many of these new millionaires will have made their donations without research, without advice and without careful consideration of the impact that a donation would (or could) have? As we at NPC well know, it’s not unusual for charitable donations to be made uninformed. But for this particular segment of the population, there is a unique opportunity to suggest a different way of doing things.
Camelot, the National Lottery operator, could take a lead in this. As their website attests, they already provide a range of advice services to winners. Anyone winning more than £50,000 receives an advice booklet on financial and legal matters. At £350,000, you are offered the services of an independent financial or legal adviser, and if you’ve won more than £500,000, Camelot will even arrange a meeting with an independent advisory panel of financial and legal experts. Philanthropy doesn’t get a mention. As NPC have found through our work with private wealth advisors, they can’t always be relied upon to provide incisive advice on giving. So, adding philanthropy to the portfolio of advice that Camelot offers could have a significant impact upon a not-insignificant amount of individual giving.
It needn’t take much effort. A few lines added to their existing booklet could inform low-level winners on how to find charities working in areas that interest them, and access annual accounts for those charities. NPC’s Little Blue Book would help winners to understand the sorts of things they should be looking at to make sure their chosen charities were effective. For bigger wins, offering access to philanthropy advice would raise the question of effective giving where it may otherwise go unasked.
It’s commendable that the number of lottery winners give the amount they do to charities. Now, it’s time for Camelot to do their part in making sure that those lucky few make the most of their philanthropy.