1 per cent is not enough

 

NPC

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Martin Brookes

Martin Brookes

Last month in the United States, Warren Buffett and Bill and Melinda Gates launched their ‘giving pledge’ calling on every US billionaire, and essentially every billionaire around the globe, to pledge to give 50 per cent of their fortune to charity. If successful, this could result in an extra $600 billion going to charitable causes in America alone.

In the UK, on a much, much smaller level, we’ve had our own charity minister Nick Hurd recently encouraging people to follow his own example and give 1 per cent of their income to charity. When making this call to action, he added, ‘I get my children to decide which charities I give to because I want to encourage them to start thinking about these things.’ Good intentions behind these actions I’m sure, Mr Hurd. But, a word of warning: the last time I left these decisions in the hands of my five-year-old daughter Alice, she chose to spend my cash on sponsoring a Cypriot donkey called Lorraine. Clearly she hadn’t been reading my thoughts on animal charities on NPC’s blog.

I think that 1 per cent is a small amount to give as a percentage of a very handsome income. But it could be worse: I recently bumped into an ex-colleague of mine who works in a senior position for a leading investment bank, where he has a very high salary. He admitted he was just considering making his first charitable donation of the year, of a few thousand quid. We need relatively wealthy people to realize what a decent-sized donation to charity actually looks like as well as understanding the principle of regular giving.

The fact is that people just don’t give enough to charity. And they don’t give intelligently enough. At a time when the charity sector is facing deep and damaging cuts – a third of the UK charity sector’s income comes from government and is at risk from spending cuts – people need to think harder about their giving. They need to focus more time and thought on where they give and the ways in which they give.

And they must place the results a charity achieves at the heart of their decision-making. A recent survey from polling company YouGov, asking people how interested they would be in an independent rating system measuring charities’ performance, found that while 68 per cent of people said they would switch their donations to another charity if they found the one they were supporting was performing badly, only 40 per cent are interested in a charity rating scheme providing independent assessments of organizations. A rather disappointing and confusing message as to the importance donors place on results in my opinion.

Whisper it gently, but it wouldn’t be terrible if some charities shut down as a result of the recession and future spending cuts. But it would be a tragedy if good charities disappeared because people weren’t giving enough money or weren’t thinking carefully enough about their donations. We should all look to Buffett and Gates for inspiration – they’ve set the bar high. I admire them for that.

Martin Brookes is chief executive of New Philanthropy Capital, a charity think-tank and consultancy dedicated to helping charities and funders achieve a greater impact. You can read more of Martin’s views on NPC’s blog athttp://www.newphilanthropycapital.wordpress.com

 

Tagged in: Bill Gates Giving Pledge Warren Buffett


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