Philanthropy

Lord Taylor of Holbeach Excerpts

Thursday 2nd December 2010 Lords Chamber

[Lord Taylor of Holbeach]

My Lords, I congratulate the noble Lord, Lord Janvrin, on securing this debate, as I think all the participants have done. It has been an interesting debate, but the noble Lord’s introduction of the topic was a tour d’horizon of the world of philanthropy and was a superb introduction for our debate today. I am sure that the whole House is very grateful to him for his contribution.

I think I have everything here; I have been making notes as I have been going through and I hope to insert them in the right places in the order of events. If I may, I will just make sure that I have them in place to do just that.

Philanthropy has played a very important role in our country for a very long time and continues to do so. All noble Lords have spoken from their own experience. Tributes have been paid to the Library, and indeed it produced a jolly good brief, but in fact it is the experience of noble Lords that has provided the quality to this debate. It was particularly useful to be able to hear about the direct experience of noble Lords such as my noble friend Lady Barker, who told us about her work in this field.

Occasionally the generous acts of a major celebrity philanthropist hit the headlines. Recent examples include JK Rowling and Ricky Tomlinson, but there are millions of acts of generosity every year, from multi-million pound gifts to smaller acts of kindness that never attract any headlines. As a society, we need to do more to celebrate these acts.

My noble friend Lord Brooke drew attention to the link between giving time and money and a sense of well-being. My noble friend Lord Phillips pointed out the way in which social action and philanthropy define our society’s values. Philanthropy can epitomise social responsibility. People willing to invest their resources for the good of others and the society around them can have a real impact. Independent sources of income from individuals, companies and charitable trusts can help communities to solve problems and improve things themselves.

Philanthropy can also have a wider benefit by enabling individuals to learn more about their communities and encouraging integration. It is, therefore, very good to know that we are one of the most generous nations in the world when it comes to giving. As a proportion of GDP, we are second in the developed world after the United States. According to the citizenship survey that covers 2009 to 2010, 72 per cent of adults had given to charity in the previous four weeks, with £17.70 being the average amount given. This is a very good starting point as we turn our vision for a big society into a reality.

The big society aims to build on and develop all forms of social responsibility. In particular, it is about community empowerment, giving local councils and neighbourhoods more power to take decisions and shape their areas. It is about opening up public services and enabling charities, social enterprises, private companies and employee-owned co-operatives to compete to offer high-quality services. Most of all, linked to philanthropy, it is about social action—encouraging and enabling people to play a more active part in society, because philanthropy without engagement does not succeed. However, if we want philanthropy to play a major part in all of this, we must recognise that there are challenges. It appears that while the amount of money given to charity is stable, the number of people who give to charity is declining, or has declined over the past five years.

Giving could also be more tax-effective. Many noble Lords focused on this and rightly so; it is an area of considerable concern. The Charities Aid Foundation estimates that £750 million of Gift Aid goes unclaimed annually. Noble Lords know how difficult it is to note Gift Aid at the time of giving. Many noble Lords have also pointed out that higher-rate taxpayers are often ignorant of the fact that there is extra money that they can either give or receive themselves, if that is what they would prefer. Certainly, through CAF giving, they could add that to their charitable giving. It presents an opportunity for people to be more generous and to find mechanisms whereby the provisions that the Inland Revenue makes for philanthropy can be turned to good causes.

There were many ideas on this front. When this debate is studied, I hope many of them will be taken up as a result of what has been said. I liked in particular the contribution of the noble Lord, Lord Best, who spoke from his own experience of the practical arrangements that he had come to. We know also that there is room for increased giving in some segments of the population. The rich give less as a proportion of their income than the poor. The richest 20 per cent give 0.7 per cent of their income to charity, while the poorest donors give 3 per cent. The noble Baroness, Lady Thornton, asked who was the more generous. If we could encourage a greater percentile of generous giving from the richest 20 per cent, we could transform the landscape of arts and charities in this country. I think that that was the message from the introductory speech of the noble Lord, Lord Janvrin. Government must take action to support philanthropy. We know that there are high levels of social responsibility in our country, but it needs to be cultivated and facilitated to become something more than good will.

Several noble Lords talked in depth about practical matters. I was very grateful for the contribution of the noble Baroness, Lady Coussins, on corporate responsibility. She portrayed an environment in which there was a link between ethics and business, and where altruism and self-interest could coincide successfully to build up businesses and the workplace as a philanthropic community. Her contribution in that area was particularly important. The noble Lord, Lord Fellowes, talked about growing corporate partnerships, and about the ways in which tax incentives in this area could produce a considerable dividend for philanthropy.

My noble friend Lord Hodgson of Astley Abbotts—I will return later to the work that he is doing in this area—talked about trying to identify why people are not more generous, given that the reward for giving, namely, a sense of well-being, is considerable. He felt that we should encourage the wealthy through structures that ensure that less popular causes also receive charitable support, and pointed out that populism and philanthropy do not necessarily produce the most satisfactory outcomes overall. He posed a number of interesting questions about privacy and transparency, and I am sure that his contribution will be read with great interest by those who are producing the White Paper.

I am very grateful to the noble Earl, Lord Listowel, for talking about the way in which charitable action and giving combine. It is true that the Government are providing less funding to voluntary groups. However, the big society provides an opportunity for these groups to access a greater proportion of government spending. We hope that they will be in a position to do this. There is a transitional fund of £100 million, which is designed to capitalise these projects and so enable them to do that. I had not heard of The Big Give. Perhaps the noble Earl will advise me on it, because it sounds interesting. We do know about sites such as Localgiving.com, which are also of interest. It is interesting how much we ended up talking about modern technology and philanthropy. This is something that we cannot ignore.

I can reassure the noble Baronesses, Lady Thornton and Lady Pitkeathley, and the right reverend Prelate the Bishop of Newcastle that we do not see philanthropy as replacing the Government’s role in the wider society. That is not the thrust of my contribution to the debate, nor, I suspect, that of anyone. We recognise the role of government as the major provider of public service, but as a driver for priorities in social engagement, philanthropy can be an extremely important factor.

As many noble Lords said, the Office for Civil Society is developing a Green Paper on giving, which will draw on thinking from across government. The Green Paper is due in December and will be followed by a White Paper in March 2011. It could be said that we are having this debate just a little too early. On the other hand, let us hope that we can have a debate after these papers are produced, as many noble Lords would like the opportunity of comparing the papers with their ambitions for this topic.

I am limited in the detail I can provide before the Green Paper is published, but I will talk about it in general terms. The Government have a clear role in facilitating philanthropy. The Green Paper will consider that role and will take a bottom-up approach, recognising that the most effective proposals for increased giving and social action are likely to come from communities, business and civil society. As part of this, it will showcase some of the most innovative approaches, including those which use the latest technologies, and will challenge government, the voluntary and community sector, and business to think about how they can incorporate these approaches. The Green Paper will also take on board the latest insights from behavioural economics to encourage social behaviours. As mentioned by my noble friend Lord Phillips of Sudbury, the paper will focus not only on giving money but on how people can best give their time and skills for the benefit of others and themselves.

Alongside the Green Paper, the Government are taking forward a number of other pieces of work to support philanthropy. As mentioned by my noble friend Lady Bonham-Carter, the role of philanthropy in the arts and culture has a long and noble pedigree. Through the Medici family in Renaissance Italy to Andrew Carnegie in the early 20th century, to the noble Lord, Lord Sainsbury of Preston Candover, and Dame Vivien Duffield today, philanthropists have supported artists and enabled culture and creativity to flourish, enhancing our civilisation. The Secretary of State for Culture, my right honourable friend Jeremy Hunt, will be announcing a package of measures to boost philanthropy in the coming few weeks.

It should be noted that 70 per cent of all private giving to the arts goes to bodies in London. There is a particular challenge, therefore, around fundraising for the arts in the other English regions, which the Government recognise and want to help address. Over the past year, the Treasury has been conducting a review of Gift Aid through a sector-led forum. The forum made a number of recommendations to improve and simplify the administration of Gift Aid and its promotion to taxpayers. Many of the recommendations will be taken forward through a new customer forum chaired by HMRC. The Government aim to publish the Gift Aid report and their initial response on the Treasury website tomorrow. We are just a day too early to discuss it but we can go to bed tonight in thoughtful anticipation of what we will discover on the morrow.

The Government are also taking action to encourage giving in local communities. In that respect, I am grateful for the contribution of the noble Baroness, Lady Prashar. She referred to community foundations and to how doers and givers can have great leverage on the way in which these things work. Small amounts applied wisely build up social capital, and rich and poor can discover their shared values in their communities. I commend her contribution to the debate because it exemplified the kind of theme we are hoping to encourage.

The Communities First Fund, which will be launched next year, will include a matched funding programme to encourage philanthropists to contribute to the building up of local endowments that will support local action. While I was listening to the debate, my noble friend Lord Hodgson of Astley Abbotts informed me that the committee in which he is involved has met seven times and will publish a report in March or April about deregulation in the CRB. He is dealing with this matter and I hope that he will bring forward recommendations which will make things much easier for the voluntary sector. I hope that, together, this work will bring about a significant increase in philanthropy.

Philanthropy enables the big society, both as a source of funds that facilitates independence outside the state, and as a means of creating social capital and stronger and healthier communities. I return to the words of my noble friend Lord Phillips of Sudbury on the issue of engagement. The key thing that philanthropy policy should be designed to do is to build on the strong levels of giving in this country. It should make it possible for all who are involved in the charitable sector to feel that their giving will be much easier and more effective.

Again, on behalf of all noble Lords, I thank the noble Lord, Lord Janvrin, for securing the debate, and I thank all noble Lords for their contributions to it.