The Government should be encouraging Britain's philanthropists
Speakers included leading donors such as John Caudwell, Fran Perrin and John Studzinski, as well as Government Minister Stephanie Peacock. As part of the Summit, Dragons' Den star Deborah Meaden and TV personality Robert Rinder 'closed' the market, bringing trading on the London market to an end on a day celebrating philanthropy in the UK.
The Summit provides an opportune moment to reflect on the state of giving in the UK and what more we can do to enhance it. The UK is a very generous nation, with over £15 billion given to charity last year. Large-scale public campaigns such as those run by Comic Relief and Children in Need engage a broad section of the public. At the higher end, there are fantastic 'big givers'; the philanthropists who topped this year's Giving List compiled by CAF and published in May, Suneil Setiya and Greg Skinner (founders of Quadrature Capital) gave away a staggering £134.9 million each last year.
The UK has a fantastic history of charitable giving. As the UK and the rest of Europe recovered from the Black Death (1347-1450), the volume of charity increased. In London the resources devoted to charity increased 50 per cent in real terms between 1573 and 1597. Philanthropists started looking for solutions to social problems, whether social housing, education or help to start businesses.
One of the leading lights was Dick Whittington (c. 1354–1423), a four-time Lord Mayor of London, who used his fortune to fund a wide range of charitable and civic projects. He financed the rebuilding of the Guildhall, improvements to drainage systems in poor areas and helped to establish almshouses. Several hundred years later, the Victorian era saw the emergence of socially conscious businesses. The likes of Unilever provided housing to their workers and placed a premium on looking after them.
Present day Britain boasts some extremely generous philanthropists. This is a mixture of 'old money' and 'new wealth' from sectors such as property and finance. Still, large charities are reliant on the same pool of donors. Well-established multi-generational families, such as the Westons, Woolfsons, Duffields and Rothschilds, still carry too much of the burden supporting many charities.
At the same time, a disappointingly low proportion of the super-wealthy and high earners engage meaningfully in philanthropy. In new research published for the Summit, Pro Bono Economics found that between 2020-22 most donors among the UK's top 1 per cent of earners made relatively small charitable donations of only around 0.2 per cent of their gross income or £52 a month. Furthermore, the exodus of many millionaires from the UK, as a result of changes to the tax system, is likely to have a detrimental impact on philanthropy.
To unlock the UK's philanthropic potential, a number of strategic interventions are required. First, a dedicated match fund for philanthropy could dramatically increase charitable giving. Evidence shows people are 84 per cent more likely to donate when match funding is available. The UK should expand successful models like the Big Give to create targeted match funds for priority sectors. The Covid-19 Support Fund demonstrated this potential, where £20 million in government funding from the DCMS Community Match fund successfully leveraged an additional £20 million from private donors.
Second, Gift Aid represents enormous untapped potential, yet its complexity means £560 million in eligible tax relief goes unclaimed annually. Simplifying the claiming process and better promoting these incentives could unlock significant additional charitable funding while reducing administrative burden for donors and charities alike.
Third, wealth advisers serve as crucial gatekeepers to substantial philanthropic potential, yet philanthropy advice remains inconsistent and fragmented across the sector. The wealth management industry should systematically equip advisers with the knowledge and tools to effectively discuss philanthropic opportunities with their clients.
Finally, the UK needs a cultural shift in how it regards philanthropy. While American philanthropists are celebrated as social heroes, their British counterparts often face scepticism or criticism. Creating a more positive narrative around philanthropic leadership would encourage greater giving and recognise the vital role philanthropy plays in addressing social challenges.
Despite recent changes to the tax system, the UK remains an attractive destination for many international investors and philanthropists. The Trump administration's changes in the US, and its cuts in funding for the aid sector, may persuade some US philanthropists to seek a new base for their operations, and the UK is well positioned to benefit.
After a year in office, Keir Starmer's Government remains committed to its five missions, encompassing the economy, energy, the NHS, crime and opportunity for all. All of these areas could be enhanced by philanthropists working alongside the public and private sectors to improve the lives of all citizens. Former Labour Prime Minister Tony Blair once spoke of heralding a 'giving age.' With the right moves, the Government can strengthen philanthropy in the UK and help deliver on its missions.
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