You don’t make the poor richer by making the rich poorer is a sixth form thought-starter to stimulate debate about the benefits, or otherwise, of inequality. Unarguably though, some of London’s rich are enthusiastically making themselves poorer by giving their wealth to good causes.
It’s obvious that the UK has issues that aren’t being solved by government alone. The welfare state is creaking, the NHS is challenged, and most people’s financials are under pressure. So it’s not a surprise that some of the wealthier are becoming philanthropists. But what might encourage more of this generosity?
When we believe others in our social circle are giving money, we are more likely to as well. This cultural norm exists in the US, with a long and uninterrupted tradition of philanthropy that expects those who can, to be generous. There, philanthropy is public, with projects funded with naming rights and recognition. It is hard to avoid the message in Los Angeles, Miami or Boston that charity is expected of you, if you are wealthy.
In the UK, it is more secretive. Beth Breeze, author of In defence of Philanthropy, describes the “philanthropy paradox”. 84 per cent of the public agree that large donations are good but only 69 per cent agree that the people who give them are. In short, people like philanthropy more than they like philanthropists.
In the UK, we have a stronger history of suspicion towards paternalist wealth, and the idea of the state’s role in our lives, as opposed to the impact individuals can have, is embedded in our political and cultural psyche. What’s lauded in New York may be scoffed at in London. As a result, many benefactors do so anonymously. But this hampers the possibility for more philanthropy and support for targeted causes. For example, if one person donates to a charity for a very specific cause, say a refuge for minority ethnic and black victims of domestic violence, and mentions it to their friend who then donates, the first act is compounded. And the ultimate winner is the people who benefit from that service.
It sounds like the ultimate “first world problem”, but it is hard to give away money. And the people with significant wealth tend to be driven individuals, such as entrepreneurs and business leaders. They have succeeded by excelling at their “thing”, whether making mixers, selling software or marketing make-up. They are brilliant within a niche, controlling major decisions and using skills honed over many years. These people like to act with mastery. The same is true in how they donate to causes, and they will be wary of giving away their money inexpertly. The taboo around talking about money means they are losing out on the experiences of their friends.
In other words, they’re not happy to just dole out their money to any old charity. They want to know where it ends up, and how it will help. The Beacon Collaborative introduces new philanthropists to more experienced “social investors” to share insights and encouragement; their aim is to attract over £2bn extra annually to good causes. Some pioneering advisors also help; Victoria Papworth, Coutts Philanthropy Advisor, reports that their clients often want advice on giving, as well as protecting and growing wealth. She has seen a trend of clients who want to be “giving whilst living”, so they can see their philanthropy in action. Advice and networks drive philanthropy.
But wealthy people, like everyone else, are busy and only have 24 hours in their day. So one crucial step is to carve out time to actively consider giving. Founders Pledge achieve this by asking young entrepreneurs, at the start of their journey, to commit to giving a chunk of their future worth. Coutts invite clients with a recent windfall to discuss philanthropy as a topic. Consideration can start with inspiration. For Beacon Collaborative co-founder Cath Dovey, she asks people to identify something they want to change, and then choose the cause to champion.
Philanthropy is worth £182bn worldwide. In the UK, people gave away more than £11bn in 2020. The discomfort we feel when we talk about money – making it and giving it away – is doing charities and social causes out of funds. It needs to become a social norm, we can help philanthropists network and learn, and we need to take the time, maybe this Christmas, to consider the questions that will encourage us down that path.