A century ago, the Carnegies, the Rockefellers and others of their ilk reinvented philanthropy with the creation of their great charitable foundations. Today, those organisations are still plugging away for the good of humanity, but we are experiencing another important shift in the nature of giving.
This summer the headlines were focused Stateside, as Warren Buffet and Bill Gates persuaded billionaires to pledge half their fortunes to charity. But the UK is also in the vanguard, with UHNWIs donating vast amounts, while people of every political stripe, age and career are finding new ways to contribute money or time. In fact, with local community groups and national bodies being asked to join David Cameron’s Big Society, it’s just as well that ‘civic responsibility’ is now a non-negotiable item on the agenda of our biggest companies, while individual CVs aren’t complete without a section headed ‘Volunteering and charity work’.
The 2009 Sunday Times Giving List reported that the UK’s richest 1,000 people gave £2.5bn, despite the downturn. ‘When the Sunday Times Rich List started in 1989, only a quarter of the very wealthy were self-made millionaires,’ says list compiler Philip Beresford. ‘Now it is more like three-quarters. The bulk of today’s super-rich are people with their feet on the ground, for whom poverty is not an abstraction but something to be overcome.’
Many of them are employing their rigorous financial acumen to ensure their giving catalyses the biggest possible change, an approach that has been christened ‘venture philanthropy’. Fund manager Christopher Hohn, son of a Jamaican car mechanic, has given over £500m, six times his personal wealth, to his Children’s Investment Fund Foundation. Stanley Fink made his millions at the world’s largest hedge fund, Man Group, and gives away an estimated third to a half of his income. ‘If I’ve treated myself to something new or an expensive holiday,’ he says, ‘donating the same amount to charity makes me feel I’m not self-centred.’
Fink is chairman of ARK, the children’s charity founded by Arpad ‘Arki’ Busson, whose glamorous fundraising dinners are a focal point for giving. Along with the Serpentine Party and Natalia Vodianova’s Love Ball, his events have rejuvenated the charitable calendar and, like Buffet’s Giving Pledge, done much to give philanthropy greater social cachet.
Matt Hermer’s Ignite Group, which includes hip venues such as Boujis, Cocoon and Bumpkin, sponsors the Serpentine Party and the Love Ball. ‘Since the recession there is a greater humility, an awareness of the value of money and a desire to do the most you can with it,’ Hermer says. ‘Philanthropy is definitely in vogue.’ With his American wife, Marissa, Hermer has set up an annual Thanksgiving dinner. Last year it raised money for Notting Hill youth charity My Generation. ‘We held the evening at Bumpkin, which focuses on local food, and it was a special and rewarding thing for us to put something back into the local community.’
Of course, it’s not only the super-rich who donate. Being sponsored to run 10 miles – or in the case of Eddie Izzard, 1,000 miles – or eat a record-breaking number of cream crackers has become a quintessential British trait. In the London Marathon, four-fifths of entrants are fundraising. This is not the pattern for similar events elsewhere in the world. ‘In the New York Marathon, most of the people running for charity are British,’ says historian John Bryant.
The internet has oiled the process, especially the donation site Just Giving. More than 12 million people in the UK have used it to raise £700m for charity. Having sponsored the London Marathon, Virgin Money was inspired to set up a second online donation site, Virgin Money Giving. Where Just Giving is run for a slight profit, VMG is simply run to cover costs. ‘Company profits can be used to do something good,’ reasons Virgin chief Sir Richard Branson. ‘With VMG, only charities benefit from the fundraisers’ hard work.’
Awkward as the ‘Big Society’ moniker may be, there is a general awareness that society needs to function better – particularly as state support has been effectively kneecapped by the budget deficit. The man charged with making this happen is Nat Wei, a 33-year-old elevated to the House of Lords as Baron Wei of Shoreditch. One of his priorities is to inspire a culture of volunteering.
Happily, such a culture is already growing. Not long ago I went to a quiz at Islington’s organic pub, the Duke of Cambridge, in aid of a nearby homeless shelter. During the evening, I realised that many of the well-heeled locals – including Pierre Condou, the owner of Paramount and Century, and One Show presenter Hardeep Singh Kohli – also discreetly work at the shelter.
‘Sometimes it feels easier, simpler and more fulfilling to just get on with trying to effect social change directly,’ says Kohli. ‘Shelter from the Storm changes the lives of unfortunate souls who are members of my community. Homelessness can strike almost anyone, unexpectedly. It is a privilege to do any small thing to help.’
Often, volunteers come from a business or corporate background, bringing with them a focused professionalism that is invaluable to charities on its receiving end. ‘There is huge latent enthusiasm, but busy people do not always have time to research for placements,’ says Mary Rose Gunn, who oversees the Engaging Experience Philanthropy Network, which launched earlier this year. ‘Instead, we learn about the particular expertise of our members and introduce them to charitable organisations which can best use them.’
Gunn is an Oxford graduate who worked in politics and media before moving to a job with the charitable Bulldog Trust. From her peers, she created a group of ambassadors for Engaging Experience, each of whom invites interested contacts with expertise in a wide range of fields to events held near her offices at Temple.
One is Maria Largey, who left her role at JP Morgan to become director of philanthropy at micro-finance charity Opportunity International. ‘I have made valuable contacts at Engaging Experience, who have helped both with strategies to develop my role and linked me to new donors,’ she says.
‘Best of all, it is a network of like-minded people who come together with a shared purpose. I spent years trying to figure out how to use my skills in the voluntary sector, and had various discouragements. It is marvellous to have a body like this: increasingly people want to do more, but they need someone to show them how.’
Innovative organisation Impetus, run by chief executive Daniela Barone Soares, works on the venture philanthropy model and uses investment acumen to make the most of each pound donated and ‘grow’ the chosen charities. Pilotlight is another group working with business executives to help charities. Volunteers pay to join, money that is spent on a Pilotlight consultant who manages the interactions.
One such exec is Phil Zeidler, the chairman of Poweramp Music, which looks after Charlotte Church and Madness. ‘I wanted to volunteer, and the process Pilotlight uses makes a phenomenal difference,’ he says. ‘Nobody wants to waste time, and with Pilotlight both you and the charity achieve what you set out to do. It is a tremendously rewarding experience.’
Lord Wei is also championing social enterprise, that is, self-sustaining businesses which run for social as well as some financial success. Wei has experience in the field: after working for management consulting firm McKinsey he co-founded Teach First, an acclaimed social enterprise which aims to transform the educational chances of underprivileged children by tempting exceptional graduates away from the obvious career routes of banking and accountancy to create a ‘new generation of leaders committed to advancing education’.
Jamie Oliver’s restaurant Fifteen is another well-known social enterprise. It found funding from Big Issue Invest, created by the company that runs the homeless magazine to finance social business. ‘It is pioneering stuff,’ says Big Issue Invest chief executive Nigel Kershaw. ‘People can contribute money in a way which is a new form of investment and a new form of charity. Straight donations are a wonderful thing, but they can breed dependency. Investing in a social business is philanthropy – but unlike 19th-century philanthropy, this money will keep giving.’
Earlier this year, London’s poshest bank, Coutts, founded a Social Enterprise Advisory Service, with Kershaw sitting on the board. ‘Coutts found that people want to get involved,’ Kershaw adds. ‘Their entrepreneurs have knowledge of finance and the passion to improve the world; if they leverage this they could have an incredibly powerful impact.’
In March, Tom Rippin (who, like Wei, is ex-McKinsey) founded On Purpose, a leadership training scheme for the sector. ‘Social enterprises are the right idea at the right time,’ he says. ‘In the wake of disillusionment with “red in tooth and claw” capitalism, they inspire vision and purpose; in an age of austerity they provide scalable and sustainable social solutions; and in terms of social and financial returns, they offer the greatest “bang for the buck”.’
Society has also tuned in to the rewards of philanthropy. Doctors have confirmed that helping others is physically good for you, and Anthony Grayling is among the philosophers who believe the way to happiness is through generosity and kindness. ‘We are privileged to volunteer,’ says Gunn. ‘It’s fun. People are so excited to find that their professional skills can benefit the world, and be part of a group that believes it can effect change, and that it is worth trying to make even a tiny difference. There is a vast sense of optimism and drive for the years ahead.’
Original article published in The London Magazine, in November, 2010