Today’s major philanthropy

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Presentation by Cathy Pharoah at SCF Spring Conference 2012

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Today’s major philanthropy

  1. 1. SCF Spring Conference May 2012Today s major philanthropy Cathy Pharoah Professor of Charity Funding Co-Director, CGAP Cass Business School
  2. 2. CGAP s research work in philanthropyThe New State of Donation – Trends in household giving 1978-2008Family Foundation Giving – 5-year series of annual updatesCharity Market MonitorBriefing Papers – trends in regional giving, generosityCommentaries on trends in Gift AidHow do donors choose charities?Arts and Business Scotland – philanthropy master classesEntrepreneurial philanthropyInnovation and the third sectorPhilanthropy and building a better society (forthcoming)Leaders, Intermediaries, Overseers? Exploring the role of communityfoundations (forthcoming)Co-producing research – working together or falling apart? www.shaw-trust.org.uk
  3. 3. foundationsMultiple routes for - flexiblemajor giving forms other family community trusts foundations channels for major giftsChallenges for new social donor-philanthropy finance advisedmanagement vehicles fundsChallenges for mapping and direct givingmeasuring (eg overlapping) www.shaw-trust.org.uk
  4. 4. Ebac Ltd owner John Elliott says new foundationwill oversee company and boost jobsThe multi-millionaire owner of a County Durham company istoleave the company to benefit the community rather than hisfamily. Mr Elliot was awarded MBE for Services toSmall Business, and on Channel 4s Secret Millionaire.Instead of passing the business on to the family, I have decided to create a structure that willensure profits are used for long-term manufacturing investment.[It will] deliver substantial recurring sums for community initiatives and enshrine the businesscommunity ethos for the benefit of all.The new foundation will have three trustees to oversee the business at a strategic level, and willbe joined by a community trustee on a rolling three-year basis.Trustees are charged with using profits to make the business stronger and use surplus tosupport local causes.Mr Elliott said the structure will ensure that the business will not be sold for personal profit, andkeep the business in the North East of England …good for the UK economy and NE England." www.shaw-trust.org.uk
  5. 5. Individual philanthropy today (estimated) 1.7 Very wealthy 1.1 Mass affluent* 2.0 Legacies + £1 billion Gift Aid 10.6 General public ££ £16.4 billion (ish) *Higher-rate tax-payers onlySources: (McKenzie and Pharoah, www.cgap.org.uk/uploads/TaxAndGiving.pdf www.shaw-trust.org.ukUK Giving 2009 (CAF/NCVO); HMRC Table 10.2, 2009; Legacy Foresight 2009;Sunday Times Rich List, 2008 (what happened to 2009?)
  6. 6. Real growth in giving 2005/06-2009/10 Individual Family foundation Corporate -0.4% 27% 7% www.shaw-trust.org.ukPharoah, C with Keidan, C and Gordon, J. Family Foundation Giving 2011.
  7. 7. Real growth in giving and assets 06/07- 09/10 % 25 Giving 22 20 17 15 10 Assets 7 8 5 -2 0 2006/07 2007/08 2008/09 2009/10 -5 -6 -8 -9 -10 www.shaw-trust.org.uk -15
  8. 8. Who are today s donors?- trends in % ofincome given, by age % 3.5 3 1978-1982 2.5 2003-2008 2 1.5 1 0.5 0 26-30 41-45 46-50 61-65 66-70 71-75 >75 Age band www.shaw-trust.org.uk
  9. 9. Trends in proportion (%) giving, by age % 45 1978-1982 40 2003-2008 35 30 25 20 15 10 5 0 26-30 41-45 46-50 61-65 66-70 71-75 >75 Age band www.shaw-trust.org.uk
  10. 10. How to begin? examples of donor points of departure the consciousness that one should give grew clear in lateteens when sent by mother to live in the Blackfriars Settlement.. myinterest in philanthropy began right there.. the way in which religious values were embedded in, andtransmitted through, family background … Maurice Wohl followed theexample of his father , who was actively involved in charitable giving the route began with experience of the charitable activities of a USfriend and colleague… his family then joined his friend s family in building ahouse for a poor Mexican family – one of the best experiences he hadbeen able to give his own children it was experience on a (charity) board which opened the door www.shaw-trust.org.ukPharoah, C with Keidan, C and Gordon, J. Family Foundation Giving 2011.
  11. 11. Philanthropy – a challenging donor journey it was not easy – we were rebels without a cause – everyonerecommended someone else I felt I could do something, but it was as if I had set sail without a rudder we wanted the foundation to be a success and honed its visioncarefully…taking time : there are no quick fixes I had a very large cheque in the bank.. I had to go and educatemyself as the next step….anything I wanted ….. let s go and find out whatthe possibilities are …actively started to learn about philanthropyPharoah, C with Keidan, C and Gordon, J. Family Foundation Giving 2011 www.shaw-trust.org.uk
  12. 12. How to define entrepreneurialism?Social enterprisesEntrepreneursEntrepreneurial approaches and attitudesSocial finance – new products? social and economic returns?Social investmentVenture philanthropy How finance used? Innovation? Sustainability? – whose? Capacity-building? Social change? Impact www.shaw-trust.org.uk
  13. 13. The Social Finance space The market-place - £1billion in total? – which space? Space still being contested/ configured Growing the Social Investment Market: A vision and strategy Trust players –Esmee Fairbairn (£20 million) Social Impact Bonds (£5 million sold to trusts)  Pilot bond - prisoner rehabilitation in Peterborough  Pilot bond development – PEF - NEETs Social Bonds – eg Scope (£20 million), Allia (£1.8 million raised through bonds) Big Society Capital - £600 million Finance-raisers – Social Finance, Zopa, OXFAM (SEIIF) www.shaw-trust.org.uk
  14. 14. Example:The Indigo Trust and informationtechnology in tackling inequalityWith a focus on the power of information technology, the Indigo Trust, one of the eighteenSainsbury Family Charitable Trusts (SFCT), has developed a totally new programme around theuse of computer and mobile phone applications at a grassroots level, to address inequality anddevelopment in Africa.Just 10% of Africa s population is currently connected to the internet, but this proportion israpidly expanding. In urban areas, the internet already has the potential to strengthenindividuals and communities through increasing their access to information, and encouragingdemocratic transparency.The Trust believes that ICT can have a powerful role in stimulating social change and economicgrowth. It aims to support the development and use of hand-held information and computertechnology (ICT) which can help improve adult literacy, and increase access to health,education and welfare services.Pharoah, C. Global Grant-making. 2011 www.shaw-trust.org.uk
  15. 15. New kinds of investmentThe Baring Foundation has made a mission-connected investment in Equity for Africa, a fundwhich provides transition investing for small and medium-sized micro-entrepreneurs in Sub-Saharan Africa aiming to build their business to the next level.The Ashmore Foundation – building primary health care enterprise in GhanaThe Foundation has a strong interest in supporting social enterprise as a sustainable approach tobuilding skills and income in marginalised communities. The AfriKids Medical Centre is one ofseveral of the Foundation s sustainability initiatives that improves services for the local communitywhile also building an independent revenue stream to reduce reliance on donations.The Medical Centre provides basic health services to the community of Bolgatanga, with aninpatient capacity of 60 beds and a new maternal health unit. It is planned that by 2015, the Centrewill have 80 beds, 8,000 inpatients and 100,000 outpatients each year. The Ashmore Foundationhas supported Afrikids with a grant of £70,000 to develop a permanent x-ray suite which will bothimprove local access to healthcare and provide a sustainable source of revenue.Pharoah, C. Global Grant-making. 2011 www.shaw-trust.org.uk
  16. 16. Case-study: Brian Kennedy Charitable SettlementSuccessful businessman: wanted to develop his philanthropy on a local basisHe began to see social problems as interlinked, needing holistic mainstream approachesJoint venture with local constabulary to introduce SHARP system to local schools (School Help AdviceReporting Page) - an internet system providing additional links between schools, the community and thepolice. www.thesharpsystem.com)The Foundation did not begin with a big vision ; finding its purpose has been developmentalSHARP now being piloted in 6 schools and aiming at 60; negotiating access can be a lengthy processAs a self-made businessman without a privileged background, Brian Kennedy s vision for the futureinvolves bringing his own entrepreneurial skills and experience to develop sustainable social enterpriseBKCS believes many young people are at risk because of their environment, and are not beyond reachWants to offer young people with problems the opportunity to earn an income, and come off benefitsThe Foundation does not believe in being a sole funder, but in acting as catalyst bringing other agenciesand funders together: currently working with a local consortium to look at social enterprise optionsA contributing factor to local partnership success - Brian Kennedy is well-known figure in local community.Pharoah, C with Keidan, C and Gordon, J. Family Foundation Giving 2011 www.shaw-trust.org.uk
  17. 17. Case-study: self-confessed entrepreneur Tom Hunter A successful entrepreneur and philanthropist whose personal wealth derives from creating, growing and selling his sports retail business Sports Division in 1998. After selling business Sir Tom established the Hunter Foundation as a formal vehicle through which to manage his philanthropy. Passionate about creating a more entrepreneurial Scotland, supporting the development of young people through education and leadership. Examples of current partnerships in the UK include Children in Need and Cash for Kids in the West of Scotland that aim to target the NEET agenda (young people not in education, employment or training). The positive destination programme undertaken in partnership with Children in Need comprises of £1.7 million grant that funds five projects across the UK. The projects are focused on improving outcomes for children and young people in the NEET category. Each project focuses on a different aspect of the NEET agenda, and takes a unique and innovative approach to tackling it. Pharoah, C with Keidan, C and Gordon, J. Family Foundation Giving 2011 www.shaw-trust.org.uk
  18. 18. Major preventive programmesChildren s Investment Fund FoundationFew independent funders, apart from the giant US Bill and Melinda Gates Foundation, havethe resources to undertake large-scale public health and education programmes, working inpartnership with governments and international agencies. In the UK CIFF has placed a strongemphasis on taking this route, investing more than £18 million in child survival in 2009/2010,with a particular focus on risks due to malaria and AIDS, and £3 million on educationaldevelopment.It has set itself ambitious targets, based on an analytical approach to assessing need and thepotential for impact. It aims to help eliminate paediatric HIV/AIDS in Zimbabwe, supporting thegovernment s work through a major grant to the Elizabeth Glaser Paediatric Aids Foundation.Through a Teacher-Community Assistant Initiative (TCAI) in Ghana, the Foundation isworking with the government to improve education outcomes for primary school children,aiming to rollout TCAI across 13,000 schools.Pharoah, C. Global Grant-making. 2011 www.shaw-trust.org.uk
  19. 19. Partnership example – sustainable economicand agricultural developmentGatsby Charitable Foundation and Wood Family TrustTwo foundations with a similar interest in improving the incomes of the poor through promotingsustainable enterprise in Sub-Saharan Africa, the Gatsby Charitable Foundation and the Wood FamilyTrust Africa, have partnered with tea industry stakeholders in Tanzania to launch the Chai Project.Its aims are to double smallholder production, increase productivity and incomes, and enhance theoverall competitiveness of the sector. While the target beneficiary is the smallholder tea farmer, the ChaiProject is also comprehensively reviewing the whole process from input supply to end market.Key research activities have been carried out, including a comprehensive and detailed audit of allexisting and potential tea growing areas, clarifying exactly what opportunities exist for expandingproduction and increasing productivity, plus an industry benchmarking of costs, comparing thecompetitiveness and cost structure of Tanzania s tea sector with other major producers in East Africa.Support will be provided through a variety of mechanisms including technical assistance, matchinggrants, loans, equity and any other commercially viable intervention. Pharoah, C. Global Grant-making. 2011 www.shaw-trust.org.uk
  20. 20. Cathy Pharoah: Heed the case of Linda Kirkwho tried and failed to get local socialinvestmentThird Sector, 1 May 2012Cathy PharoahSet aside the romance and grasp the harsh realities of socialenterprise, says our columnistThe demystification of the idea of social enterprise is long overdue. The cult of enterprise has heldiconic status in the sector over the past decade or so. But the fact is that in a sector where income isunder pressure on all fronts, entrepreneurialism is no longer just an aspiration; its a necessary www.shaw-trust.org.ukcondition of survival. So it is time to get real about it.
  21. 21. Today s major donors? investors - in futures (not necessarily financial products!) education, international development, culture big money – use for big projects capital investments as much as social investments partnerships – many reasons networkers sometimes beginners – learning curve often more specific, operational, engaged business- like / used to success/ want to be good at whatever they do many different routes to entrepreneurial philanthropy www.shaw-trust.org.uk

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