UK Philanthropy Still Resilient
New research out today, which tracks the quantity, size and destination of charitable donations worth £1m or more in the UK during 2007/08, reveals the resilience of philanthropy and the desire of donors to fulfil their pledges and sustain their giving in the face of the economic situation. Despite several research reports citing significant drops in wealth* amongst the UK rich – the fall in the total value of donations worth £1m or more was found to be 13%, and the fall in the number of donors making commitments at this level fell by just 6%.
Furthermore, the research finds that more ‘million pound donations’ are being given directly to charities to spend on activities. In a reversal from 2006/07 – the first year this research was undertaken – the larger part of donations of this size have been given direct to front-line charities rather than ‘banked’ in charitable foundations for distribution at a later date. As a consequence, the amount of money that ‘million pound donors’ have made available for spending directly on charitable recipients has actually increased by over £100 million, from £705m in 2006/07 to £808m in 2007/08.
Beth Breeze, author of the report commented:
“Despite the understandable tendency to focus on questions of ‘how much’ is given during a recession, the analysis presented in this report emphasises that it is also important to explore ‘how’ philanthropy has changed during the economic crisis, for example, making large donations in instalments and an increase in anonymous and low profile giving.”
The Coutts Million Pound Donors Report, from Coutts & Co, in association with the Centre for Philanthropy at the University of Kent, is the second annual analysis of charitable donations worth £1m or more.
The report identifies 189 donations worth £1m or more, made by 102 different donors (including individuals, charitable foundations and corporations), and received by 153 charities. This compares to 2006/07 when 193 donations of £1m or more were made by 106 donors to 159 recipient charities.
Key findings include:
- Total value of ‘million pound donations’ in 2006/07 was £1.618 billion and in 2007/08 was £1,405 billion.
- The average (mean) ‘million pound donation’ in 2007/08 was worth £7.4m, down from £8.4m in 2006/07, however as means are strongly affected by the presence of outliers (very small or large figures), it is helpful to use other ways to measure the ‘average’ donation. The median (middle size of donation) is down slightly from £2m to £1.9m and the mode (most common size of donation) remains constant at £1m.
- The majority of ‘million pound donors’ are individuals (51%), professional foundations are responsible for 38% of these gifts and only 1 in 10 came from corporations (11%).
- The most popular causes for ‘million pound donors’ are Higher Education, Arts and Culture and International Aid and Development.
Beth Breeze continued:
“This research is important because there is very little reliable information available about giving by the wealthiest members of our society. We know that the causes preferred by donors able to give £1 million or more differ from those picked by less wealthy donors, who tend to favour medical research, children’s charities and overseas aid. Million pound donors often support universities, the arts and cultural organisations which get minimal support from the general population. But whilst the destination of their donations may be different, the things that rich and not-so rich donors care about are not actually worlds apart. Universities may use donations to support poorer students or to develop solutions to global health problems, like new vaccines, and arts organisations may use funding to open their doors to wider audiences. So million pound donations to such institutions might sound a bit elitist but they can be of benefit to disadvantaged people in the UK and overseas.”
Mark Evans, Head of the Wealth Institute at Coutts commented:
“As always there are lessons to be learnt if we want philanthropy to grow exponentially. Donors need to be encouraged to share their ideas and experience in order to inspire others. Charities need to change the way they market to wealthy individuals by getting to know them first and by educating them about the causes they are looking to support. And bankers need to dare to introduce philanthropy into conversation with their clients and make it easier to give.”
Maya Prabhu, Senior Philanthropy Adviser at Coutts commented:
“We hope that the case studies in this report will help encourage donors who have the capacity to make major gifts and foster collaboration amongst major donors who share a passion for making a difference through their philanthropy.”
Beth Breeze concludes:
“Not only does this report demonstrate that UK philanthropy is far more resilient than many people have suggested, it is heartening to see that major philanthropists have reacted to the economic crisis by ensuring that more funds are being spent on front-line charitable activity rather than being put away in charitable foundations to be spent at some point in the future. Whilst philanthropists often want to make provision for future generations, arguably contemporary needs outweigh future claims during this difficult period.”
View the full copy of the Coutts Million Pound Donors Report 2009. The publication also includes case studies of ‘million pound donors’ and of charities that have received donations of this size.
* The Sunday Times Rich List 2009 reported a 37% fall in the collective wealth of the 1,000 richest people based in the UK and the Centre for Economics and Business Research noted a halving in the number of UK-based millionaires and a decline of 24% in the wealth of the average UK millionaire since 2007. While the Merrill Lynch/Cap Gemini World Wealth Report 2009, shows a 26% decline in the UK HNW population.