Philanthropy as spending: why we should expect more of living philanthropists


Caroline Hartnell


Caroline Hartnell

Caroline Hartnell

Looking through a batch of stories to be published in the next Alliance eBulletin, I was struck by a piece on UK foundations and philanthropists’ plans for grantmaking this year and next. While just over half of foundations recently surveyed by the Association of Charitable Foundations (ACF) expect grantmaking to be lower this year than last, 87 per cent of living philanthropists expect levels to be as high or higher.

Why the difference? A half-day symposium in London on ‘Surviving and Thriving During a Recession’ on Monday (29 June) gave me some insights into the reasons behind this. Jointly hosted by the European Association for Philanthropy and Giving and J P Morgan’s Private Bank, the opening session featured a foundation leader, Clare Thomas of City Bridges Trust, and a private philanthropist, Frederick Mulder, who is founding chair of The Funding Network ( Their views accurately reflected, and enlarged on, the trends noted above.

‘Foundations are in it for the long haul, ’ said Thomas. Almost half of those surveyed by ACF expect to maintain or increase grantmaking this year despite widespread losses, but counter-cyclical funding won’t work if you are committed to still being around for future generations (unless, suggested one speaker, the issue is addressed when times are good). The UK is still a wealthy country, said Mulder. ‘We wouldn’t take our kids out of school because our bank balance is lower. Why should we take other people’s kids out of school? This is not the time to cut back on giving.’

The difference, which hadn’t fully struck me this way before, is in the pot of money that endowed foundations and individual philanthropists draw on. The endowed foundation has a pot of a fixed size that is all devoted to philanthropic ends. If the pot gets smaller, you either spend less or you spend it quicker. Spending it quicker may amount to spending down, which is not an option for all foundations. For the living philanthropist, their charitable spending comes out of a pot that includes all their other spending – on daily living, education, leisure activities, provision for old age, etc (and in this context the use of the term ‘spending’ is more illuminating than ‘giving’).

Why should we assume that philanthropic spending will suffer in a recession? It clearly depends on how high up the individual’s list of priorities it comes. It obviously comes high on Frederick Mulder’s list. For poorer people who have lost their jobs and whose incomes are cut to the bone, charitable spending may have to go. For wealthier philanthropists, this need not be the case. We should expect more of them – and the UK figures suggest these expectations would be justified.

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