Philanthropy

Lord Luce Excerpts

Thursday 2nd December 2010 Lords Chamber

[Lord Luce]

My Lords, I am not sure whether being last in the debate is an advantage or disadvantage. One can say without hesitation that the range of knowledge and experience that we have heard in this debate has been quite remarkable. The sense of timing of my noble friend Lord Janvrin is also just right, given that we all agree that we face a traumatic period because of the dramatic reduction in public expenditure over the next four years. With much of the taxpayer support that has been going to charitable bodies due to be reduced, there is an opportunity, as well as a challenge, for this country to find a way of improving the culture of giving.

As a former Arts Minister and a former university vice-chancellor, I have found that this country lies somewhere between the United States and the continent in respect of the balance between public and private financing. Of course, the United States has a long history and tradition of generating a sense of duty of giving by private individuals, along with a kind of anti-state sense—no doubt fostered more recently by the Republican Tea Party. An interesting point to observe is that, as a proportion of GDP, individual giving accounts for 0.14 per cent in France, 1.7 per cent in the United States and 0.73 per cent in the United Kingdom. That rather bears out the idea that we lie somewhere in the middle.

Listening to many of the comments of noble friends in the House, I found it interesting to hear about some of the new characteristics in giving. For example, 75 per cent of all high-net-worth individuals take the view that they want to give more during a recession. Even more significant, the younger generation—classified as the 18 to 34 year-olds—feels a growing responsibility to share wealth. I recall from talking to Dame Alison Richards, who was the successor to my noble friend Lord Broers as vice-chancellor of the University of Cambridge, that 33 per cent of the undergraduates at Cambridge are thought to be actively involved in participation in charitable work. That is very different—and a big improvement—from my day.

The characteristics of the donors are also interesting. As my noble friend Lord Janvrin said, many more of the givers now are business owners or businessmen rather than people who have inherited wealth. It is interesting that their motives for giving, according to the studies, come from wanting to give something back to the community, which gives them a sense of personal fulfilment. I think that all that is encouraging. Donors also desire to be involved in anything to which they give money, such as social ventures or whatever they happen to be. They want to help to make the charities more efficient, which in many cases is much needed.

Therefore, an immense challenge faces the coalition to produce, after an intense study, a broad range of measures and incentives that will encourage greater giving in this country. We must give credit to the previous Government for the work that they did, not least in introducing gift aid and in setting up organisations such as UK Philanthropy. The coalition must build on that.

I found that, after some experience as an Arts Minister—I should also declare an interest as president of the King George V Fund for Actors and Actresses and president of the Voluntary Arts Network—I could prove to the Chancellor, which was an important thing to be able to do in seeking more taxpayers’ money, that every £1 of taxpayers’ money would generate £5 in the private sector. I think that a large amount of that was due to the Association for Business Sponsorship of the Arts, which raised money from employers through challenge funding and match funding. The association also enabled employers to be more involved with the arts organisations, which also gave pleasure to their employees.

For universities, matching funding can also be a great help, particularly when raising money from alumni. From my experience at the University of Buckingham, I also know the value of local community philanthropists, such as Evelyn de Rothschild, who was generous enough to give money for a new building for business studies. But the Government’s review must range broadly from lifetime legacies to endowments—which we have not discussed very much—and bequests. It must cover local community foundations, corporate and payroll giving, and innovative funding of one kind or another.

There has been some suggestion that gift aid might be replaced by some other tax incentives. If that is the case, gift aid still has a long way to go. It is a marvellous incentive, but only 68,000 out of 162,000 charities participate in the gift aid system. A 1 per cent increase in gift aid would produce another £45 million for charities. I hope that we do not undermine gift aid, but find ways of improving it.

This is a real chance to try to help change the climate for giving, but none of us has any illusions that it is a gradual and long-term process. The Government need to take a strong lead in this area. I hope that the Minister will reassure us that they will do so.