The future of giving

Big, bold gestures of generosity may grab the headlines – but new developments in the world of philanthropy mean you don’t have to be a billionaire to make a difference.

The future of giving

When the Manchester United footballer Juan Mata launched the charity initiative Common Goal in 2017, his move was met with some cynicism1.

Mata pledged to contribute a percentage of his salary to a central fund set up to tackle social challenges, from HIV to youth unemployment. He urged his fellow footballers to do the same.

The criticism focused on that percentage figure: 1 per cent. In an age of bloated superstar sports salaries – a EUR222 million transfer deal had just seen a Paris St Germain team member crowned as the most expensive footballer in history – it struck some as a drop in the ocean.

But Mata reasoned that since many footballers already supported their own favoured charities, asking them to devote an extra 1 per cent for the rest of their careers was realistic.

A year on, the 1 per cent pledge has been signed by more than 50 professional footballers, playing in leagues from the UK to China. Three managers, one football club and countless supporters have joined them. Common Goal has earned respect for the support it’s given to initiatives across the world.

Public pledges

The public vow of philanthropy is not a new concept. Perhaps the most famous contemporary movement is the Giving Pledge, which asks billionaires to commit to donating most of their wealth, either during their lifetimes or in their wills.

Founded in 2010 by Bill and Melinda Gates and Warren Buffet, the Giving Pledge has now been taken by 186 philanthropists in 22 countries, from the UK to Ukraine2.

But while the ‘super-philanthropists’ and sports stars may capture the headlines, more modest but committed giving is making a difference too.

The Sunday Times Giving List underlines the point. Most of the attention naturally focuses on those near the top of the annual publication. In 2018 they included Jamie Cooper, who donated 88 per cent of her personal fortune to a charity she founded, and the seasoned philanthropist Lord Sainsbury, who gave away over 40 per cent of his wealth.

However, a closer look at the list reveals that most of the philanthropists gave away 2 per cent or less. In 2018 you could make the top 200 UK givers by donating just 0.14 per cent of your personal wealth3.

Data developments

Whatever the size of their donation, most philanthropists are driven less by public acknowledgement than by knowing their generosity will have a positive effect. Younger givers, in particular, now expect to be able to see how their donations are used and what has changed as a result.

Leading the charge for transparency is 360Giving, set up by Fran Perrin when, as a new philanthropist, she found it hard to make informed and strategic decisions about which causes to fund. “The grant-making sector was hard to navigate unless you were a determined expert,” she has said4.

That is changing, as charities increasingly realise their future success depends on their ability to gather data and present the impact of the work they do really well.

Philanthropists can now search data from scores of funders who have signed up to 360Giving’s open data standard. And in its Civil Society Strategy, published in 2018, the government promised to lead by example in opening up its own grants data5.

Impact investment

Greater transparency will assist philanthropists who are inspired by an approach known as ‘effective altruism’. With its roots in the 2000s, this movement dismisses personal interests in favour of finding the most efficient ways to make a positive impact.

In a similar vein, ‘impact investing’ sets out to enable investors to focus on assets providing measurable social or economic benefits. One of its biggest champions is the European Venture Philanthropy Association.

The EVPA was formed in 2004 when five men held a meeting in London. They shared a background in private equity, an interest in charity investment – and a strong sense that a new approach was needed to maximise charities’ contribution to tackling social problems.

The organisation sets out to provide stable funding, capacity and partnerships to social enterprises and social purpose organisations – prioritising social impact over financial returns. Today it has over 270 members in more than 30 countries6.

EVPA research suggests venture philanthropists are particularly effective at helping social organisations get through the early stages of their growth. Half of them provide funding of EUR200,000 or less per organisation – further testament to the power of modest but precisely-targeted investment7.

Contact your Relationship Manager to discuss the range of ways in which your giving can make a difference, and the most effective ways to build philanthropy into your finances.

1Looking back at year one of common goal, Common Goal, August 2018
2givingpledge.org
3The Sunday Times Giving List 2018
4Exciting to witness how grantmakers are showing leadership, Three Sixty Giving, December 2018
5The Social Sector: supporting charities and social enterprises, Gov.co.uk, August 2018
6About EVPA, The European Venture Philanthropy Association
7Investing for Impact, The EVPA Survey 2017/2018

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