Government and giving
Philanthropy is on the political agenda, with aims to promote support for the third sector. But will they succeed in these austere times?
With unemployment levels at a near-17-year high and austerity measures and salary freezes hitting hard, now may seem a difficult time to ask people to give more to charity.
But this is exactly what the government is pursuing at the moment, with its wide-reaching philanthropy agenda. This includes: publishing its ‘Giving’ White Paper last May; the Department of Culture, Media and Sport releasing a strategy to increase philanthropy (shortly after announcing spending cuts); and the organisation of a Giving Summit at Downing Street to be held in early May, during which the barriers to philanthropy will be discussed.
The recent budget dampened things, however, with George Osborne announcing a cap on income tax relief – a measure criticised by many in the voluntary sector, who have vocalised concerns that this will increase the cost of giving to charity. Leading voluntary sector bodies have even launched a campaign, Give It Back, George, calling on Osborne to exempt charitable donations from the plans. At the time of publication, more than 800 charities had signed up to the campaign and David Cameron, the Prime Minister, had pledged to “look very sympathetically” at charities’ concerns.
A spokeswoman for the Cabinet Office defends the measure by saying the very wealthy should not be able to wipe out their tax bills year after year. “But we will listen to, consult and work with the voluntary sector and stakeholders to ensure that the cap will not significantly impact those charities that depend on large donations,” she says.
The rest of the philanthropy agenda comes at a time when the government is cutting its own spending within the voluntary sector. The state is an important source of income for charities: according to the UK Civil Society Almanac 2012, published in March by the National Council for Voluntary Organisations (NCVO), voluntary sector income from statutory sources was £13.9 billion in 2009-10 – 38% of its total income.
And according to the Almanac, statutory funding for the sector is estimated to drop by £3.3 billion over the Spending Review period (2010-11 to 2015-16). Given this fall, there have been criticisms that philanthropy and private giving will not be able to fill the gap.
Sir Stephen Bubb, Chief Executive of the Association of Chief Executives of Voluntary Organisations (ACEVO), wrote in an open letter to the Prime Minister last year: “Big Society has for too long been promoted as a Utopian ideal with calls for more giving and more volunteering. But the reality is the hard grind of charities trying to provide services for more, against cuts in their funding.”
Big society, or plugging the funding gap?
But the government has denied that its philanthropy agenda has come about purely to offset cuts. “The government would be vigorously championing philanthropy with or without the need for spending cuts,” a spokeswoman for the Cabinet Office said. “However, at the same time, we are facing the largest peacetime deficit in our history. Charities, voluntary groups and social enterprises cannot be immune from necessary reductions in spending.”
Others agree that this agenda is about more than offsetting cuts. Cathy Pharoah, Professor of Charity Funding at Cass Business School, says she believes the government’s philanthropy strategy is more about empowering individuals: “It’s part of a wider ideology which is related to individualism and the spirit of enterprise, not an answer to the recession.” She also points out that, as we have enjoyed a low-tax economy for a long time, we need to give voluntarily instead.
And Pharoah says she does not get the impression that the wider public resents the government’s call to action. “Most people have understood that it’s a hard time for charities at the moment,” she says. “The people who can afford to give more – and there are many in our society who can – have recognised the need.” Some research also suggests this. For example, despite continued economic uncertainty in the UK, UK Giving 2011, published by the NCVO, found that during 2010/11 the proportion of adults giving to charity had already returned to pre-recession levels, rising from 56% in 2009/10 to 58%.
One potential problem though, according to Pharoah, is that private givers and the state tend to fund different things: “Some areas such as social welfare will struggle to tap into philanthropy.” A solution to this, she suggests, could be the government offering more targeted tax breaks and matching funding when people give to areas with the greatest need.
A possible indication that others outside government also believe this is the time to champion philanthropy is the incidence of separate initiatives with similar goals, such as last year’s Philanthropy Review. This voluntary-sector-led inquiry into giving published a ‘call to action’ in June for business leaders, philanthropists and government to help make giving a social norm.
One of its recommendations was the launch of a national strategy to celebrate giving and encourage people to give more – since developed by the Pears Foundation’s Give More campaign. This will have its public launch at the end of April, and will ask people to pledge on its website to give more time, money or energy to a cause or organisation.
Tamar Ghosh, Campaign Director, says that Give More’s organisers thought carefully about their strategy in relation to the economic backdrop. “It’s not just about money, it’s deliberately about giving time and energy as well – giving in any way you can,” she says. “Many charities and community groups are suffering at the moment, and this is the time when our communities need us the most.”
Further reading
- Cathy Pharoah, Private giving and philanthropy - their place in the Big Society (opens as a PDF)
- UK Giving 2011 - An overview of charitable giving in the UK 2010/11 (opens as a PDF)
- Association of Chief Executives of Voluntary Organisations (ACEVO)
- National Council for Voluntary Organisations (NCVO)
