The UK should make more of a fuss about its philanthropists. Private donors give away billions of pounds every year, from the armies of people with monthly direct debits for chosen causes to the mega-rich with a portfolio of large charity investments. Quite simply, none of us have to give away our cash, and it’s a cause for celebration that we do in such generous quantities.
That celebration should also be forward-looking, because social problems are as pressing as ever. Giving levels have remained relatively static in recent years, even as economist Thomas Piketty warns us that wealth inequality is at its highest point for a century. It is imperative that we find ways to increase levels of philanthropic giving and to make that money stretch further than ever before.
This question of how to attract more money and spend it better is central to NPC’s new paper, 10 innovations in global philanthropy. Cutting-edge thinking is being applied to all areas of our lives, and giving is no exception. We are continuously changing the way we shop, catch up on the news, book a holiday, listen to music, find a new partner – all of these new methods supposedly improving our lives in some ways. The new report applies the same logic to how we give away our money: what is happening at the cutting edge of effective global philanthropy, and how can it be be adapted and rolled out elsewhere?
The report looks at ten separate innovations from across the world, from new uses of data to growing trends in impact investment. This is not the place to list all of them, but there is space to pick out two from the crowd.
The first is close to home. The UK’s Edge Fund has led the way over recent years in involving grantees and beneficiaries in its grantmaking. Top-down decision-making might still be the norm among many foundations and grantmakers, but the charities in whom they invest may well know far more about where money is most needed and which approaches are most likely to succeed. Edge Fund is a membership body, with members brought together to share expertise and discuss grant proposals; but even a less formal arrangement could see philanthropists welcoming grantee observations much more warmly as part of future planning.
Secondly, philanthropists would do well to embrace greater transparency. As Fran Perrin, Director of the Indigo Trust, told us, ‘the richer the available data, the better the investment decision’. This is easier said than done: philanthropists from a private sector background, for example, may be nervous of opening up their books to the public. But if big givers are serious about addressing some of the most complex and entrenched social issues of the day, repeating past mistakes isn’t an option, especially if evidence of those mistakes can be uncovered and learned from.
NPC’s innovations paper presents examples from around the globe, from new methods of collaboration between Indian philanthropists to an Australian study of layered funding. Some can be replicated and adopted in other countries easily, others less so. But these ideas and more needs serious attention.
Plum Lomax is deputy head of the Funders Team at NPC.