Philanthropy

Lord Janvrin Excerpts

Thursday 2nd December 2010 Lords Chamber

Moved by

[Lord Janvrin]

To call attention to the case for encouraging philanthropy; and to move for papers.

[Lord Janvrin]

My Lords, I am most grateful for the opportunity to introduce this debate today on the case for encouraging philanthropy. At the outset, I declare an interest as a trustee of the National Portrait Gallery and of the Gurkha Welfare Trust, the chair of the trustees of the Foundation of Prince William and Prince Harry and of the Entente Cordiale Scholarship Scheme, a member of the development committee of St George's Chapel, Windsor, adviser to the Parthenon Trust and deputy chairman of HSBC Private Bank (UK).

I want to use my speech to explain why I think that the need to encourage philanthropy is both relevant and timely and then set out some ideas of what could be done to achieve more giving in our society. I should preface what follows with two acknowledgements. First, I pay tribute to those many individuals, organisations and foundations who give generously and regularly to charitable causes at home and abroad. My contention is certainly not that we are a mean lot, but rather that we as a society—particularly the more wealthy among us—could give more, and now is the time to work out how best to encourage that. Secondly, I acknowledge those who lead thinking in this field—for example, New Philanthropy Capital, the Institute of Philanthropy, the Charities Aid Foundation, Philanthropy UK, and many others—who provide the research and intellectual underpinning on which I have drawn liberally and which is vital if we are to change attitudes.

Why do I think this debate important and timely? The starting point is obvious. It goes without saying that there is a real need both in our society and globally. We cannot be indifferent to the needs of others, and we—government, business, charities, media, and individuals—must all be looking for new ways to address that challenge.

Secondly, and more topically, the current public spending cuts will inevitably affect the charitable sector. Some 13 per cent of charities in the United Kingdom receive over half their income from the Government, and many more will be affected by reductions in public expenditure. In the excellent debate on the charity sector in this House on 5 October there were many references to the serious implications of this.

Thirdly, donors large and small have also inevitably been affected by the economic downturn. Figures from the National Council for Voluntary Organisations and the Charities Aid Foundation suggest that the total amount donated by individuals fell 11 per cent between 2007-08 and 2008-09. Certainly, the anecdotal evidence—shared, I have no doubt, by others here—is that it is a tough environment for fundraisers at the moment.

All, however, is not doom and gloom. Those in the fundraising business should take some comfort from the fact that there is still considerable wealth around. Much of the wealth is self-made. Over 15 years ago, 75 per cent of the Sunday Times rich list was inherited wealth and 25 per cent self-made, but today those figures are reversed. Many, in financial terms, have done well in recent years. The nature of philanthropy has also been changing in recent years. New philanthropists are more likely to be closely engaged in ensuring the effectiveness of their giving, more likely to be co-operating together and more interested in looking at innovative ways of charity financing. Despite, or perhaps because of, present economic circumstances, there is much creative thinking going on. Indeed, I understand that an independent group of leading figures from the world of philanthropy, business and charities is at present discussing how best to give a lead on some of the issues that I hope this debate will cover.

Fourthly, and perhaps most importantly, the present coalition has expressed an interest in encouraging philanthropy. Since I originally tabled this Motion, we have had an undertaking that the Government, bringing together the Cabinet Office, DCMS and, crucially, the Treasury, intend to publish a Green Paper on giving by the end of the year and a White Paper by the end of March next year. I very much welcome that commitment and I hope that this debate will contribute to their thinking.

I have a few suggestions on what I hope is now being considered. First, the Government should set their sights firmly on the fundamental challenge of changing public attitudes to giving. How can they do that? Above all, the Government need to find ways of getting across the idea that philanthropy is fundamentally something to be encouraged, recognised and supported, and is not inevitably some form of personal aggrandisement or, at worst, a potential tax scam for the rich. They need to explain that private philanthropy can complement government priorities, not replace them, particularly by investing in those innovative, risk-taking and high-impact charities that are so often at the forefront of social change. That general message can be reinforced by looking at new ways in which donors can be recognised—for example, through schemes like the Beacon Fellowships and indeed through the honours system, which is obviously a very sensitive area, although philanthropists have rightly been recognised in that way in the past. The message would also be strongly underlined if there were moves to revise regulations, such as the substantial donor legislation, which sometimes seem designed to make the relationship between recipient and donor awkward, if not discouraging.

Secondly, a major signal of commitment and support of philanthropy and the charity sector generally would be given if gift aid could be simplified and made more efficient. That can be presented, rightly, not as an additional tax break but as streamlining the existing tax regime. In particular, I hope that the Government will consider allowing charity aid providers to reclaim higher-rate gift aid allowance on behalf of donors. Apart from anything else, that may encourage more people to set up charity accounts, so making their giving a more regular and structured part of their financial arrangements.

Thirdly, I hope that there will be at least some consideration of further so-called “lifetime giving opportunities”. There are three areas most often advocated. There is the extension of “acceptance in lieu” rules on works of art gifted to recognised museums during a person’s lifetime as well as on death, as proposed in the Goodison report. There is the extension of existing tax breaks on gifts of listed shares to unlisted shares. The argument that it is not worth extending the scheme because few people make use of it probably has more to do with lack of knowledge of the scheme rather than anything else. Then there is the whole area of lifetime legacies—for example, in the form of charitable remainder trusts, which play an important part in the philanthropy scene in the United States. While I accept that this is a very difficult moment for the Government to be introducing tax incentives, I hope that the Green Paper can have something positive to say about these ideas, not least as a most powerful expression of support for philanthropy and the charitable sector.

Fourthly, I hope that the Green Paper will address ways of supporting new forms of charity financing—for example, through social investment models like the East London Bond, the social impact bond, online giving vehicles and matched funding. It seems to me important that the Government look for ways of incentivising these new ways of funding where they have the potential to be effective.

If the Government can do much to encourage philanthropy, so too can other interested parties. I shall mention three in particular: the corporate world, charities themselves and the media. The business world can and should do more to encourage philanthropy. In the past 20 years or so, it has recognised that corporate social responsibility is in fact good business. Within this evolution, straightforward philanthropy has obviously played a part, as has volunteering—giving time rather than money—but much more can be done. There is little doubt that more corporate encouragement for payroll giving would be an effective way to encourage greater employee giving, as would the increased use of matched funding for employees’ own fundraising activities. Both schemes would have the potential to introduce younger people to giving and philanthropy.

Charities themselves need to take a hard look at their own activities to assess the effectiveness of their fundraising, however hard their development and fundraising teams are working. There are many lessons to be learnt about the need to look after donors, to have a greater understanding of what motivates them, to work out how best to recognise them if they so wish and generally to make donors more central to the activities of the charity itself.

It is difficult to exclude the media from this list of those organisations that might have a material bearing on how much is given in our society. Many media organisations now very effectively promote their own charity campaigns; for example, at the moment through Christmas appeals. However, considering the number of people who are actively involved in the charity sector and the philanthropy world, their coverage of these areas is sometimes pretty limited. Local media in particular have an important role to play in encouraging community philanthropy and recognising local giving at that level.

In conclusion, the case for encouraging philanthropy is clear. It is important, it is timely and there are things that can be done. We would be building on the policies of the previous Administration and embracing the thinking of the present coalition Government. Indeed, this is an issue on which the House of Lords is well placed to take a lead, not least because I would guess that so many in this House are engaged in this sector and in raising funds. Now, I believe, is the time for government, business, charities and the media to make a concerted effort to change attitudes to philanthropy at every level so that it is seen as part of life, particularly for those fortunate enough to have done well in recent years, to give something back. Our objective should be as simple as it is ambitious: to make a step change in the culture of giving in this country.

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[Lord Janvrin]

My Lords, I add my thanks to all noble Lords who have taken part in the debate. The range of experience, wisdom and ideas has been extremely helpful in supporting what I hope will be the start of a continuing debate on this subject in the coming months. I particularly thank the Library for its briefing, which was produced extremely quickly and was incredibly comprehensive and very useful.

I pick up on the Minister’s remarks that we might be too early. I hope that this will be a contribution to the thinking that is going on and I welcome the idea that we might come back to the subject. I remain of the view, and am greatly encouraged in it, that this is extremely important for our society and for us all. I thank all noble Lords for taking part.

Motion withdrawn.