Just Do It! What rich donors wish other rich people knew about philanthropy
Rhodri Davies
Website: www.whyphilanthropymatters.com
When my friend and colleague Professor Beth Breeze asked me if I would co-author the third book in the Why Rich People Give series (with invaluable support from series founder Theresa Lloyd), saying ‘yes’ was definitely one of the easier decisions I have had to make. The opportunity to talk to a wide range of wealthy UK donors on how and why they give was too good to miss, and the end result – our new book Rich Expectations: Why Rich People Give – draws on the information we gathered to offer a detailed picture of the current landscape of philanthropy in the UK, as well as a unique snapshot of how that landscape has evolved over the last two decades.
What I didn’t know at the outset is how widely our interviewees would range across the philanthropy landscape in their observations and insights; from changes in patterns of giving to views on taxation, fears about overlarge inheritances, and a neat analogy involving golf!
Thereasearch is framed around the idea of expectations, because this was a theme that kept coming up throughout our discussions with intervewees. It was clear from what we heard that expectations play a big role in philanthropy: whether that is the expectations that donors have of themselves and their peers, the expectations that society as a whole has of rich people, or the expectations that charities and donors have of each other. It was also clear that these expectations are not always clear and explicit; and that when this happens it is often the cause of confusion and frustration which results in criticism being levelled or relationships breaking down. One of our main hopes for this new book is that by highlighting the importance of expectations and the different forms they can take, we can help all of those involved in philanthropy to understand each other better, and that this then leads to more and better giving.
There were many intriguing insights in the data we collected. We found, for instance, evidence of a change in the causes that rich donors are giving to: Arts and Culture and Higher Education in particular - which are often thought of as the paradigmatic causes for wealthy people to support, and which were the most popular back in 2012 when the last book in the series was written– remain popular, but have now been overtaken in terms of total amounts donated by Human Services and Welfare and by Health as areas of focus. In part this might reflect the impact of the Covid pandemic on philanthropy, and the urgency and awareness of immediate need that it brought; but it might also suggest more fundamental long-term shifts in how donors view their philanthropy and their responsibilities to give back to society.
We also heard many fascinating – and in some cases surprising personal – stories from rich donors about the importance of family when it comes to giving. They told us of the way in which their upbringing had shaped their own attitudes to wealth and responsibility – as one donor said: “My parents would always give away at least 10% of what they had, and they would encourage [my siblings and me] to do that as well. So a lot of those philanthropic traditions were definitely embedded in us before we came into a larger amount of money”.
We also heard about people’s desire to ensure that those same values were passed on to their children – often at the same time as expressing concerns about the potential risks of passing on wealth. 42% of the donors in our research survey said that they were concerned about the amount the amount of money that should be transferred to their heirs, and that this had influenced their philanthropy. As one donor remarked to us, “As you get older you think “what am I going to do with it?”. You could leave it to your kids but they’ll be in their 60s when we shuffle off this mortal coil so is it really going to do them any good at that point? There are other ways that wealth can be put to use.”
We heard, too, about how philanthropy had helped some families to build stronger bonds both within and across generations. As one donor remarked, ”The thing I find most fulfilling is what it does to my familial relationships. Because I'm quite different to my family. We all get on, we've always all got on. But with philanthropy there's a real sense that I’ve found a place and a purpose within the family that isn't just for me, it's for them.” We were also warned, however, that this is not always easy and can take a significant amount of effort.
Our interviews also highlighted the fact that many rich donors reflect deeply on their own philanthropy – both in terms of how they do their giving, and in terms of the wider context in which it sits. We heard about the potential challenges of managing uneven power dynamics in donor-recipient relationships, and some of the possible solutions – such as giving unrestricted gifts and supporting core costs, which many of the donors we spoke to urged as crucial ways of supporting charities effectively. One donor told us that, “the first thing I very quickly learned is the importance of core costs. And that every charity has them. As funders people love to say, “well, I don't really want to pay for any overheads or any salary costs”. But of course they're vital.”
Philanthropy clearly doesn’t exist in a vacuum, and some donors were keen to point out that it is important to think about how money is made and invested at the same time as how it is given away. Otherwise, as one donor told us, “there’s still a very real risk that people are spending a huge amount of time creating the perfect grant mechanisms and grant-making processes but [that] they have this unthinking investment portfolio [whose] negative effects… are completely outweighing the great stuff they’re doing with their grantmaking”.
We also found that many donors recognize the importance of the relationship between philanthropy and taxation - with both being seen as vital, but performing fundamentally different functions in society. Linked to this, we heard many times the idea that philanthropy is at its best when it focuses on adding unique value, which often means taking risks and doing things that government (and business) cannot, rather than duplicating their efforts or playing it safe. One donor put this powerfully: “I think philanthropy shouldn't be filling in in very safe ways, providing services that are very driven by the state. The power of philanthropy is not to be stuck in what we're doing every single day - it's proving how there could be a really different type of tomorrow.”
Perhaps the most compelling idea we heard in the course of our research, however, was also one of the simplest: that the most important thing for any aspiring philanthropist is just to get on and do something. There are major challenges facing our world right now, from climate breakdown to the impact of new technology, and at the same time, pointed critical questions are being asked about the legitimacy and role of philanthropy within our society. Against this backdrop, the demands on philanthropic donors and the sense of responsibility to give in the ’best’ possible way can at times feel overwhelming. But we were told many times how important it is not to give in to this feeling: as one interviewee noted, ‘I like the analogy that ‘you can’t teach someone how to improve their swing if they’ve never picked up a golf club’. The point being that giving is a learnable habit, that will not improve if it never starts. So, if – as we are often told – philanthropy is a journey, then the most important step of all is usually the first one.
Link to Book: www.dsc.org.uk/rex