Archive for the ‘Foundations’ Category

After The Giving Pledge: Giving Behaviour of 22 Donors

June 4, 2013

In February this year, the Gates Foundation announced that the Giving Pledge, founded by Warren Buffett and Bill and Melinda Gates in 2010, would for the first time extend its invitation to wealthy donors outside the US.  They added twelve signatories from eight non-US countries, bringing the total number of those who have so far taken the Pledge to 105. In response to this announcement, we conducted a survey of our own network of philanthropists to gauge their attitudes to the Pledge, the results of which can be viewed here. The findings of the survey raised several interesting points, of which the question of timeframe over which to disburse philanthropic assets was one.

To drill deeper into this issue, and to respond to interest from alumni of our donor education programmes, we asked philanthropists within our networks about the rate at which they intend to deploy their philanthropic assets.  They provided us with the following response about their giving behaviour.

About the 22 donors who responded to our survey

  • They come from the UK, the US, Brazil, Canada, Lebanon and Mexico;
  • They give away an annual average of $2,168,050;
  • Their foundations have an average endowment of $79,081,250;
  • Their areas of philanthropic giving, in order of frequency, are: education; children and youth; community re-generation; environment; healthcare; international development; women and girls; board governance; impact investing; reproductive health; film as a vehicle for social change; local charities; technology; transparency; human rights; encouraging philanthropy; encouraging non-profit impact; alleviation of poverty; religion; and historic preservation.
  • Eight donors had made provision for their families to pursue their own philanthropic goals separate to their own philanthropy.  Eight had not, and four others had not yet decided.

The rates of their giving

  • Of the twenty-two donors, seven had decided the precise time-frames within which they were looking to give away all of their philanthropic capital.  Three of them aim to do so within the next ten years; two of them aim to do so five to ten years after their death; one over the next five to eight years; and one over the course of the next twenty years.
  • One of the donors commented that “I strongly believe that philanthropy can be more effective when driven by the wishes and strategy of a living donor. Long-lasting philanthropic institutions can become sclerotic and bureaucratic, not always but often. Family foundations may end up with their hands tied, by a legacy directed at tackling a social problem that no longer exists. Innovation and risk taking is often reduced.
  • Another stated thatRisk taking and innovation are crucial for philanthropy. Philanthropy needs to be able to adapt as social problems and the needs of society change over time.”

The percentages of their giving

graph

The values and beliefs that drive their giving

  • “Partnership: the more we (civil society, philanthropists, NGOs and activists) can work together towards a cause, the faster we can move the needle.  Engagement: not only personal engagement, but moral and legal and financial engagement.  Empower the organisation so they do the best they can to move the needle. Help the executive team to excel in their strategy and operations to achieve their mission and reach goals they have set with their trustees (and other constituencies).”
  • “I focus on leadership and because my funds are limited, I support smallish charities with dynamic leadership in unattractive and unpopular fields where it is difficult to raise funds.”
  • “Philanthropic capital should be deployed in the most strategic way possible.”
  • “I generally believe in addressing the needs of underserved poor in the neediest parts of the world (where I have worked for much of my professional life), not the arts or environmental needs so popular among donors here at home, or SOBs (symphony, opera, ballet) – as much as I love them personally.”
  • “Everybody deserves the opportunity to grow in a safe environment, with responsible, caring and self-sufficient parents, as well, to receive quality education. Seeing how many individuals and communities have improved their lives as a result of my father´s work in philanthropy is the best example of the importance of philanthropy in my life.”

www.instituteforphilanthropy.org

For more information please contact:

Mary Glanville

Mary.Glanville@instituteforphilanthropy.org

+44 (0) 207 2400626

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Relative Values: A conversation on philanthropy across generations

March 22, 2013

Last week, the Institute and Barclays hosted an exclusive event in central London on the topic of family philanthropy. Three prominent philanthropists – Hannah Rothschild of the Rothschild Foundation, Anna Southall of the Barrow Cadbury Trust and Katherine Lorenz of The Cynthia and George Mitchell Foundation – formed a panel, facilitated by Mary Glanville, Managing Director UK of the Institute and introduced by Emma Turner, Director of Client Philanthropy Service at Barclays Wealth and Investment Management, to discuss their personal experiences of giving with an audience of over forty philanthropists.

At the Institute, we regularly consider the issues around next generation philanthropy – both in our education courses for donors as well as in our knowledge development programme – and we appreciate the unique challenges and opportunities that arise when giving as a family. As one panellist said, “family philanthropy can be very difficult – it can sometimes feel as though you have to choose between social impact and your relationship with your family”. Mary facilitated an informative and lively discussion between the panellists, who spoke frankly about their own experiences and in so doing provided practical advice to our audience. Here are some highlights of their discussion:

  • Getting involved in your family’s philanthropy can serve not only to develop understanding of best practice in philanthropy, but can also assist your professional career. One panellist explained that her experience of being a trustee at a young age gave her invaluable knowledge of governance which she used very successfully in her independent career. The knowledge transfer has worked both ways for each of our panellists as expertise gained in their respective careers has also given added dimension to their family’s giving.
  • It’s helpful to encourage the next generation to get involved in philanthropic activity at a very early age – perhaps by ring-fencing small sums of money and asking them to choose how to give it, or getting them to do a pitch on behalf of their chosen charity to the trustees of the foundation.
  • Recruiting trustees and staff members who are not members of your own family can be pivotal in bringing balance in structures dominated by family dynamics, as well as a different perspective to board discussions. You can also gain valuable issue-area expertise that members of your family may not already bring to the table.
  • Recognising the value of your name may enable you to use all of your assets for good; one of our speakers’ trusts took a strategic decision to allow grantees to say that they had received philanthropic money from them as they saw that it helped the groups they support to leverage other funding and strengthen their advocacy initiatives.
  • Think about the future of your family’s trust: consider setting a strategy that means the trust isn’t restricted to funding very specific issues in the future if they are no longer relevant. This may allow each generation to shape the focus of the trust and to ensure that its work is always appropriate for current needs.

The Institute for Philanthropy will be running a two-day education course for next generation philanthropists in London in June. For more information about this course, or any of our other donor education programmes, please contact the The Philanthropy Workshop team on: tpw@instituteforphilanthropy.org

A response to the Giving Pledge announcement

February 19, 2013

The Giving Pledge is the most high profile public campaign promoting philanthropy among the wealthy. A unique, international survey of high net worth individuals has been conducted by the Institute for Philanthropy which reveals the attitudes of philanthropists to the Giving Pledge.

The majority of respondents (68.4%) estimate that they will give up to 50% of their wealth in their lifetimes. Of the 26.3% of respondents who estimated that they will give at least 50% of their wealth in their lifetimes less than half (four of ten) have signed up to the Giving Pledge or adopted its principles.  Two people (5%) did not respond to this question. 18.42% estimate they will give between 51-75% of wealth; 7.9% estimate they will give over 76% of wealth.  Furthermore, the majority have already decided the way in which they will carry out their giving (in their lifetimes, or through a vehicle after their death, for example).

David Sainsbury, one of the new Giving Pledge signatories announced today, explains his motivations for philanthropy: “A number of years ago my wife, Susie, and I decided that spending any more money on ourselves or our family would not add anything to our happiness, but that using it to support social progress was something that we both found deeply fulfilling. We, therefore, decided to transfer gradually most of our wealth to our charitable trusts, and looking back that has turned out to be a very life-enhancing decision.”

The motive for the four philanthropists who completed the survey and who have signed up to the Giving Pledge or have adopted principles is “Wish to devote the majority of wealth to good causes”, not “Wish to encourage other people to become more involved in philanthropy” or “Belief that wealth is a burden on future generations”.

Interestingly, our results indicate that the number of philanthropists who have already made the decision to commit the majority of their wealth to good causes is potentially much greater than the Giving Pledge campaign implies.

This could be due to a low level of knowledge of the Pledge among philanthropists (just over half of the respondents had heard of the Giving Pledge and knew what it consisted of (55.2%) and of those who have not heard of the Giving Pledge, half are in the UK (four people) and half in North America (three from the US and one from Canada)).

There are however other factors beyond a lack of knowledge: our survey found that the most common consideration behind not signing the Pledge or adopting principles is a desire to remain private. The second most popular consideration was a wish to pass wealth to future generations.

NOTES:

  • Respondents came from seven different countries, the UK (39.5%) and US (36.8%) were the most common geographies, however we also had respondents from Canada, Mexico, Netherlands, Finland and Italy.
  • The average annual giving of respondents is $1,532,941 (result possibly skewed by two donors who are giving away very large sums of money). One third of respondents are giving away at least $1m annually.
  • Of those who have signed up or have adopted the principles of the Giving Pledge, these people are giving away at least $1m philanthropically a year
  • The timeframe in which giving will take place is fairly mixed: 26.3% said the majority of giving would be carried out during the philanthropists lifetime, 31.5% said that there would be a vehicle for philanthropy after their death, and 29% said that they had not decided yet.
  • The majority of respondents reported they believed that the Giving Pledge would result in an increase in philanthropic money (71%).
  • Many respondents expressed the belief that the role of philanthropy was not just to “throw money at problems”; rather it should be well-researched, thought through and strategically deployed for impact. As one donor said of the Giving Pledge: “money shouldn’t be the only thing acknowledged”.
  • The survey was distributed throughout an influential network of philanthropists, many of whom have graduated from The Philanthropy Workshop (TPW) programme which educates major donors in the skills of strategic philanthropy.
  • 38 people responded to the survey

www.instituteforphilanthropy.org

For more information please contact:

Daisy Wakefield,

daisy@instituteforphilanthropy.org

+44 (0) 207 2400626

Lessons from the ‘charity tax’: a blog post by Matthew Bowcock on CivilSociety.co.uk

July 10, 2012

Writing on the Civil Society blog on Monday 9th July, TPW alumnus and Chair of the Community Foundation Network, Matthew Bowcock, warns that while the prospect of a curb on tax relief for major donations is consigned to history for now, the sector should not assume that it has disappeared forever.

Reflecting upon the debate around the proposed ‘Charity Tax’, Matthew makes several interesting observations about the changing nature of the philanthropy sector in the UK. Among other points, Matthew suggests that the Charity Tax debate has highlighted the increasing independence of charities and philanthropists, has emphasised the need for better data on philanthropy, and has shown just how fragile British philanthropy now is.

Matthew concludes the piece by saying:

“Philanthropists should expect that they will come under increasing scrutiny and pressure to justify the public benefits that their giving delivers in return for tax reliefs. In any future debate philanthropy must find better ways to argue its value by presenting the benefits that it brings to society and correcting public misunderstanding. Evidence needs to go beyond quantifying the amount of giving, which is a crude ‘input’ measure, and include the economic and quantifiable social value delivered by philanthropic investments in projects, as well as the substantial benefit of time, talent and other non-financial resources that major donors often commit to the charities they support. Only then will the true value of independent philanthropy be appreciated and its role established in Britain’s culture.”

Matthew Bowcock’s blog post offers much food for thought, and we recommend that you take the time to read it. The full article is available on the Civil Society website via this link: http://bit.ly/MXU2eo