The Transatlantic Giving Gap.
Britons donated nearly £10bn to charity last year, but philanthropy in the UK has a long way to go before it matches the culture of charitable largesse in the US. The numbers illustrate the difference: an estimated $390bn (£293bn) was donated in the world’s largest economy in 2016. The sheer scale of the US, with a population five times the size of the UK and with six times as many millionaires, explains some of the disparity. But there are also political and social factors that explain the size of the transatlantic giving gap. Jake Hayman, the chief executive of philanthropy advice service Ten Years’ Time, said US donations tended to be much larger than the UK because lower tax rates, and thus proportionately less tax income, in the US mean there is a greater need for contributions from the wealthy to help with education, the arts and the wider community. In the US, if you make money you are expected to contribute back to your country and community,” Hayman said. “Meanwhile, we don’t have the same social expectation as the US has – that philanthropy should be worn as a badge of honour and British philanthropists simply tend to work less hard on their giving. They are generally disconnected from the communities they wish to serve and unable to get beyond a couple of sentences of prompt cards when explaining why they give to any particular work.”
The biggest single British donation last year was made by the Labour peer Lord Sainsbury. The great grandson of the supermarket chain’s founder, John James Sainsbury, donated £40.5m to his charity the Gatsby Charitable Foundation. It is a generous sum that will be used to promote education, science, public policy and the arts. But in the US, 12 people donated more than $100m last year. Topping the US giving rankings with donations of $500m each were Phil Knight, the multibillionaire co-founder of Nike, and Nicolas Berggruen, a real-estate investor known as “the homeless billionaire” for jetting around the world in his private jet and working out of five-star hotels.
UK donations totalled £9.7bn last year – roughly the same as in 2015 – according to the Charities Aid Foundation, with medical research and animal welfare accounting for more than half of gifts. Almost a fifth of the total donations came in the form of £1m-plus gifts. More than 300 people, foundations and companies gave £1.8bn in gifts of £1m or more, according to a report by Coutts, the private bank used by the royal family. Almost £15bn in gifts of more than £1m has been donated over the past decade, according to the bank’s Million Pound Donors report. Lenka Setkova, the executive director of the Coutts Institute, which advises the bank’s clients on philanthropy, said: “While mega-gifts [donations of £100m or more] tend to attract the headlines, £1m is the most common donation. Giving exactly 1m appears to be economically and psychologically a significant figure, which resonates with both donors and charities.” Compared with Europe, the UK has an impressive philanthropic record. According to figures produced by Fondation de France, which promotes philanthropy, the UK outranks Germany and other continental states in the giving stakes. Individual contributions in 10 European countries studied by the Fondation produced €24bn in 2014, with €11.5bn coming from the UK, and Germany the next highest with €4bn.
The Sainsburys are the 217th richest in the UK with a £560m fortune, according to the Sunday Times rich list. In 2013, Sainsbury and his wife joined the Giving Pledge, the Bill Gates and Warren Buffett-led promise for the world’s richest people to give at least half of their wealth to charity. “We do not believe that spending any more money on ourselves or our family would add anything to our happiness. However, using it to support social progress we have found deeply fulfilling,” Sainsbury wrote in his pledge commitment letter. He has donated more than £1bn since he founded Gatsby, named after his favourite book, in 1967. The Coutts report said publicity surrounding the giving pledge had encouraged other wealthy people and companies to increase charitable giving. More than 170 of the world’s richest people, including Facebook’s Mark Zuckerberg, have signed up. Among the British donors were golfer Rory McIlroy, designer Sir Terence Conran, Gordon Roddick, the husband of the late Body Shop founder Anita, and Liccy Dahl, the wife of the late author Roald.
Many large donations on both sides of the Atlantic have been to education or cultural institutions, which have been renamed in the givers’ honour. Earlier this year, the Tate Modern renamed its £260m Switch House extension the Blavatnik Building after Sir Len Blavatnik, the second richest person in the UK with a £16bn fortune, according to the Sunday Times rich list. Ukrainian-born Blavatnik made a reported £50m donation, in the biggest ever gift to a UK museum. In the US, the $390bn total represented the third consecutive year of record highs, according to Giving USA.“Individual giving continued its remarkable role in American philanthropy in a year that included a turbulent election season that reflected a globally resurgent populism,” said Amir Pasic, of the Lilly Family School of Philanthropy, which produced the report. “In this context, the absence of a dramatic change in giving is perhaps remarkable.”
Credit: Rupert Neate for The Guardian, 24 November 2017.