Alliance Online - June 2006

Coutts brings donors together to discuss giving

Caroline Hartnell

A recent survey carried out by Coutts, one of the UK's leading private banks, showed that the majority of its clients want to know more about philanthropy in the UK. Coutts Forum for Philanthropy is one of the ways in which Coutts supports its clients' charitable giving. Forum discussions, held throughout the UK, give clients a chance to network with their peers and discuss issues related to philanthropy.

What do people get out of giving? This was a central topic at a Forum Discussion in Oxford in February. Michael Norton, author of 365 Ways to Change the World, advocated the excitement of investing in individuals with ideas. 'You shouldn't preach philanthropy,' he said. 'It should be fun, a holiday, a passion.' A donor who supports animal welfare charities talked of people sobbing their thanks to her over the phone. 'Without interesting ways to give, I probably would have stopped years ago,' said another participant. 'What makes the difference is meeting the person who runs the charity. If you are inspired, you support it,' said yetanother. 'I like to support local charities when I can because I become involved, make a difference.'

The Funding Network, founded four years ago by Fred Mulder, is designed to create both excitement and connection. At Funding Network meetings, projects are typically presented before lunch, each sponsored by a member. After lunch members make pledges to projects there and then, with sponsors each putting in the first £250 for their own project.

How to do you fulfil this desire of people to 'connect' when giving overseas? Creating a connection between donors and organizations in other countries is the key challenge facing Malcolm Fleming of Oxfam. 'A fundraiser is a facilitator,' he said, 'connecting potential donors with projects.' Many donors visit projects overseas; others see videos and meet the programme officers.

In fact, most of those at the Oxford meeting do give internationally, despite the difficulties of making a direct connection. And many of the projects presented to the Funding Network are charities working overseas.

From philanthropy to social investment

Several presenters looked at the possibilities of supporting charities other than by making grants. 'Can you find investments that combine capital preservation and security with generation of social returns in line with mission?' This was the question addressed by Mark Campanale of Henderson Global Investors - and an issue both for foundations and for individual donors. Henderson have identified 4,000 publicly listed companies involved in sectors such as clean energy and environmental services in order to create investment funds for people who want to align investments with mission. According to Campanale, these mission-aligned funds do keep up with mainstream MSCI funds - though not necessarily with the fastest-growing sectors, eg tobacco!

While Henderson has focused on creating mission-aligned investment vehicles that provide competitive returns, Venturesome has been making recoverable grants and soft loans to small charities. Their donors are attracted by the idea of recycling funds - though the present recycling rate of 98 per cent is too high, founder John Kingston admits, and suggests that they should be taking more risk.

The donor's role should be to support charities at the points where they need it, said Kingston. 'What we're aiming for is to see the charity as the customer going into the social investment marketplace looking for a certain type of money and a certain type of management support and seeing what's available.'

Yet another approach was suggested by Fiona Halton of Pilotlight. Many business people want to offer their skills to charities, she said, but they don't know where to start. They're not sure if they'll have an impact and they're frightened of the time commitment. Pilotlight's answer is to provide a brokering service, matching business people with charities that need their particular skills.

Although there was considerable interest in these 'beyond giving' approaches - and the idea of recycling was clearly attractive - the Venturesome model was not seen as unproblematic. 'I see giving and lending as totally different,' said one participant. 'I can give money away but my bank managers insist on investments having good returns. I can't put money in the middle of the spectrum between giving and investing, as John Kingston suggests.'

'We get a lot of information from mainstream financial markets,' said another, 'but on the charity side reporting isn't good enough yet. Venturesome can report on the capacity of the charity supported but not on the impact on the lives of beneficiaries.'

To find out more, contact Mark Evans at Mark.Evans@coutts.com or visit www.coutts.com/philanthropy

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