Philanthropy

Lord Fellowes Excerpts

Thursday 2nd December 2010 Lords Chamber

[Lord Fellowes]

My Lords, I congratulate my noble friend Lord Janvrin on and thank him for initiating this debate, which is on an increasingly important subject. I declare an interest in having connections with various charities as trustee.

No one would doubt that the encouragement of philanthropy is a thoroughly good thing, but in my view the tax incentives for personal giving are about as good in this country as anywhere, although the business of claiming tax deductions seems more convoluted here than necessary and conspicuously more so than in the United States.

The charitable sector is at present suffering a double squeeze. First, many endowments and private resources were decimated in the dramas of 2008, from which they have not fully recovered. Secondly—and this is a more recent pressure—many public bodies have recently had their grant in aid severely cut. Those with charitable status will inevitably pursue with increasing vigour the pool of money from foundations and individuals which the traditional charitable sector has hitherto had pretty well to itself. Here I must declare a particular interest as a board member of the British Library. Many such public bodies have been operating in the commercial field and in the search for philanthropic donors for years, and with some success, but those efforts will now have to be stepped up, and there is no easy way for them to do it. They cannot just flick a switch and say, “We’ll make up the gap by getting £X million of philanthropic giving” and launching a few eye-catching exhibitions for which they can charge. In today’s world, that just will not work.

So where will they go for honey? There has been a surprising and distinct trend over the past five or 10 years showing a sharp decline in corporate philanthropy, also known as corporate social investment, relative to individual giving. That says much for the generosity of the individual, but also much about shareholder power, which nowadays is seldom supportive of corporate philanthropy in the old form, giving with no dividend expected. They want their company to get a bang for its charitable buck in the shape of profile, reputation and business advantage.

While corporate philanthropy in the old sense is increasingly rare, the alternative—corporate sponsorship and partnership—is growing, albeit slowly. But it is still in its infancy as a major force in the philanthropic market, by no means correcting the imbalance between corporate and private giving. To help this correction along the way, I should like to see tax incentives for corporate support and charity in all its forms increased to reverse the trend whereby the individual is bearing the brunt of charitable demand. I am happy to say that the individual will always be the beating heart of real philanthropy, but that nowadays will never be enough.

Sponsorship or partnership—call it what you will—between major companies and charities, whether public or private bodies, is very much part of the way forward, but I hope that the Government see fit to give the tax system a nudge or two in the right direction to make it easier and more attractive to the donor and the recipient. That could change the present trickle of help into a constant and benevolent stream. The burden on the individual will be lightened and the recipient body will benefit, not only financially but in the long-term relationships built up between it and the corporate sector. That sector will acquire an understanding of a world outside its normal ken. There should be no losers in this, but possibly prizes for all.