New philanthropists

This driver has been archived

Britain has seen the emergence of new philanthropists, influenced by American style philanthropy. New philanthropists are very wealthy and part of a growing number of extremely affluent individuals in the UK. They are often very engaged in their chosen causes; an extreme example of this is ‘venture philanthropy’ where individuals take a more hands-on approach to improving the performance of organisations using their business skills and expertise.

The scale of this philanthropy can be gauged by noting that in 2008/09 philanthropists giving £1m or more contributed an estimated £1.5bn to the voluntary sector [1], while lower-level donations by the general public contributed approximately £10bn [2].

What are the implications?

  • New philanthropists are seen by some as a solution to the sector's funding problems, yet they bring their own challenges, not least concerns over independence.
  • Large donations (over £1m) may be given by individuals, by foundations (representing a grouping of individual philanthropists) or by corporations (either as independent organisations or as proxies to philanthropic individuals)
  • The aims of new philanthropists may not match with organisation’s missions, potentially leading to mission drift.
  • Intermediaries offering investment-style research and advice to wealthy philanthropists have an increasing power, potentially raising new challenges in competition for funding and raising further issues over independence.
  • Venture philanthropists often focus on capacity building, and can be a potential source of infrastructure costs.
  • Higher Education dominates the high value (more than £1m) donations, in 2008/09 representing a larger share than foundations. [1]
  • New philanthropists may be more willing to fund innovative ways of working, and be more willing to fund infrastructure and capacity building costs than other funders.
  • Support in the form of skills and expertise in addition to money can build the capacity of VCOs. In particular, business expertise and skills that will help address the imbalance of skills gaps and skills needs in the VCS.

Moving forward

  • How do you balance your mission with the aims of funders in order to secure funding?
  • Do you have a good process for deciding whether or not a funding opportunity is too far off mission?
  • Would your organisation benefit from a more hands-on relationship with funders and how might you handle any possible tensions?

Want to know more?

The Coutts Million Pound Donors Report 2010

Published by: Coutts, a private bank, and the Centre for Philanthropy, Humanitarianism and Social Justice at the University of Kent.

Date: November 2010

Format: Pdf

What is it? A survey looking at trends in major donations over 2009.

How useful is this? As well as suggesting that major giving is holding up relatively well despite the recession, the survey includes interviews with the high-net worth individuals about what motivates them to give to charities, and the kind of relationship they expect in return.

Philanthropy does not pay taxes

Published by: The Guardian - a left of centre newspaper

Date: 2010

Format: Web

What is it? An article exploring philanthropy with a negative tone. The main concerns raised in the article are: social priorities are set by the wealthy, who are unelected and unaccountable; it may undermine the values of the voluntary sector; a focus on short-term projects and “value for money”; a focus on symptoms of poverty rather than on causes; and conflicts of interest.

How useful is this? The article gives a succinct appraisal of the key concerns about philanthropy. It does not provide new data so its value lies mainly in prompting further thought on the topic.

A Guide to Giving: 3rd edition

Published by: Philanthropy UK

Date: 2009

Format: PDF

What is it? This guide is intended primarily for philanthropists themselves. It identifies strategies for contributing effectively based on their expectations and priorities

How useful is this? The guide is primarily aimed at philanthropists but may also be of interest to organisations seeking insight into the concerns of philanthropists and foundations. It may also be  a useful resource when preparing grant applications. 

Venture Philanthropy: The evolution of high engagement philanthropy in Europe

Published by: Oxford Said Business School – a school of Oxford University

Date: 2006

Format: PDF

What is it? This paper looks at the emerging venture philanthropy industry and examines its expansion in Europe.

How useful is this? This detailed paper outlines the roots and nature of venture philanthropy and looks at its potential to expand the social impact of Social Purpose Organisations particularly in Europe’s transitional countries. It also acknowledges the sceptics of venture philanthropy and outlines some of the challenges it faces. The paper includes case studies of venture philanthropy organisations.

                             References

  1. Breeze, B. Coutts Million Pound Donors Report 2010, The Centre for Philanthropy, Humanitarianism and Social Justice, University of Kent, November 2010.
  2. NCVO and CAF, UK Giving 2009, September 2009.
Last updated at 16:11 Wed 23/Feb/11.

LockRecent comments

AuthorComment

I find this a very interesting trend. One need look no further than the powerful Secret Millionaire (Channel 4) to see that new philanthropists do really exist.

My experience over the last 15 or so years working in the third sector suggests that this potential investment stream has not been considered by a large number of organisations. However, perhaps this is another area where there is quite a North-South divide? I’d loved to be proved wrong on this!

Look forward to helping to include a session on ‘21st Century Philanthrophy’ as part of a new post graduate certificate – perhaps we can get one of these ‘new’ philanthropists to help deliver it!

See newphilanthropy.org if you are thinking of getting someone to deliver this as a seminar—as the interface between donors and charities they have a valuable insight.

Join the discussion!

How will this affect your organisation? Have you considered it during your strategic planning? Can you share any interesting relevant links?

  • Lock