History of philanthropy in city of london guildhall library event

Rhodri Davies-Programme Director,GivingThought at CharitiesAidFoundation
Guildhall Library History of Philanthropy Event
 Appropriate to be here today talking about philanthropy,
because (as you may or may not know) today is Giving
Tuesday
 This is an international campaign which has designated today,
2nd
December, as a day on which we celebrate the value of
people giving time and money to help others and try to raise
awareness of the great work that charities do.
 Stated in the US two years ago as antidote to the growing
consumerism that surrounds Thanksgiving weekend, where
you now have “Black Friday” and “Cyber Monday” (SLIDE)
 We might suppose that our philanthropic forebears might have
found the idea the we would need a campaign to encourage
being charitable extremely peculiar.
 HOWEVER: contrasting materialism with altruism is far from
a new tactic. An editorial in the Times in 1863 entitled
“Charitable London” said the following about philanthropy:
(SLIDE)
“...[A] trait more characteristic of the national temperament
[than benevolence] could not be produced... It is true enough that
we are a people far gone in the exclusive pursuit of money. It
cannot be denied that the material preponderates largely over
the spiritual in our intellectual constitution... We are prone to
good dinners, and invest the knife and fork with more dignity and

authority than were ever intended for such domestic and
everydayutensils. We are somewhat intolerant in our prejudices
and intolerant in our bearing... liberal as the air to the last degree
but one, and in that degree, as bigoted and wrong-headed as you
please. But enumerate the faults and foibles of our countrymen
until there be no more to name, and there remain still to be noted
the great virtues that have made our people what they are... If
Englishmen are eager of acquisition, they are spendthrifts in
bounty. Their incessant anxiety to give their hard-earned money
for the mitigation of pain, whether of body or soul, is more
creditable to them than the greatest victory ever won over
human selfishness in the tented field.”
 We have already seen that the history of philanthropy in the
City can tell you a lot about the City
 BUT: it can also tell us a lot about the broader history and
development of philanthropy
 Many of the themes we can identify from looking at the City’s
philanthropic past are ones that have been just as relevant in
other places and other times, including today.
 I want to use the history of the City as a starting point for
considering some of these broader themes (SLIDE)
 As you can see, the list of these themes would also function
fairly well as a guide to “things not to discuss at dinner
parties”... (RELIGION, DEATH, MONEY, POLITICS, TAXES)

Religion
 We have already heard how important religion was in driving
the philanthropic culture of the City in the past
 AND unsurprisingly that was also true elsewhere and remains
true today
 Religion still a major influence on philanthropy
 By far the most popular cause in the US, accounting for 1/3 of
all giving. (SLIDE)
 ALSO: estimated that 2/3rds of all giving by those with
incomes under $100K is to religious causes.
 NB: unlike UK that includes closed congregations.
 Less pronounced in UK, but still important. According to UK
Giving, 17% of total value of donations goes to religious causes
(not most popular, but most valuable)
 Religion can be an influence either as part of specific
obligation (Tzedakah, zakat) (SLIDE) or just as a general sense
of social responsibility. (NB: personal experience of
interviewing City philanthropists).
 AND whilst some of this is focused on religious causes, some is
motivated by relgion by directed at secular causes.

 As well as the general importance of religion as a motivating
factor, specific religious differences have played a fundamental
role in the development of modern philanthropy
 In particular the Protestant/Catholic schism of the 16th
Century was the starting point for modern philanthropy
 Difference between traditional Catholic notions of alms-
giving which emphasised gifts to the church as a means to
securing your immortal soul, and a protestant approach to
giving that emphasised giving during your lifetime and
focusing on the needs of society (still religious at first, but
paved the way for secular focus on the same causes)
 NB: this is explanation given by both Jordan and Owen. Some
have taken issue with it, but it was also the contemporary
narrative (e.g. DONNE) (SLIDE)
“There have been in this kingdome, since the blessed reformation
of religion, more publick charitable works perform’d, more
hospitals and colleges erected, and endowed in threescore, than
in some hundreds of years of superstition before”
 Not that protestants were not concerned with death- even if
their focus was on the needs of the present they were still very
keen to ensure that their giving had a positive effect on their
legacy after they were gone.
 TUDOR MERCHANT ANECDOTE

 These stories about the merchant classes bring us on to
another philanthropic theme that the history of the City can
tell us a lot about: attitudes to money and wealth
Wealth
 Difference between created vs. inherited wealth have been
profoundly important in history of philanthropy
 The City is all about creating wealth, so its growth has had a
huge shaping influence on UK philanthropy
 NB: when Sunday Times Rich List was first published in 1989
the majority of people on the list came from inherited wealth,
but in most recent list, more than 80% of those listed came
from created wealth (NB: influx of wealthy foreigners) (SLIDE)
 “Golden ages” of philanthropy have usually coincided with
periods of intense wealth creation: e.g. Tudor merchants,
Victorian industrialists, and in US: early 20th
Century oil and
railroad tycoons, arguably current Silicon Valley? (SLIDE)
 So what are these differing attitudes?
 In general, those who have made their own money more
willing to give it away
 Number of explanations been offered as to why this might be
the case:

1. Stewardship vs. Ownership
-NB: also gives rise to trend of self-made wealthy actively not
wanting to leave money to their offspring for fear of ruining
them (SLIDE)
2. Element of luck/debt to society
-recognition of an element of luck in their wealth creation, or the
fact that wider societal conditions enabled it
-e.g. Carnegie
- Buffett’s “ovarian lottery” (SLIDE)
3. Social Status
-Recall Tudor merchant story
-True in the City, and also in other places and industries e.g.
Brewing industry (“The Beerage”). (SLIDE)
• William McEwan, the Scottish brewer, who gave generously to
Edinburgh University, where the Graduation hall bears his
name.
• Edward Guinness, whose widespread philanthropic work in
Dublin and London included the establishment of large
amount of new houses for the working classes in Dublin.
• Thomas Buxton, Director of the Truman Brewery in East
London, who was involved in a number of major social
campaigns including the abolition of the slave trade, raising
the wages of Huguenot weavers, and prison reform.
- Philanthropy was the norm rather than the exception. It was
remarked that Fred King, of Greene, King & Sons, “may be the
only brewer of whom it never seems to have been claimed that he
made the world a better place by some means other than his
beer”

4. Easy come, easy go... Self-made wealthy have greater
tolerance of risk because of confidence they could make
money again
 EXAMPLE of “easy come, easy go” attitude: Baron Hersch
story
 NB: in order for created wealth to give rise to a culture of
philanthropy, there has to be a general level of self-awareness
(i.e. an acknowledgement of their privileged position in
society, and how their lot differs from that of the majority)
 This was quite easy to achieve in the past because the wealthy
would have found it difficult not to be aware of the suffering
of the poor. Literally almost tripping over them in the streets
 Booth Map (SLIDE)
 Images of poverty (SLIDE)
 Thomas Coram
 The problem in the City today is that it is far easier for those
working in it to be totally insulated from the poverty that
often exists no more than a few miles away from them.
 They live in rich areas of London, or commuter towns, travel to
work and back again and never see the wider community
around them

 Research from the US has found that when wealthy people
live in areas that are not as economically diverse, they are
less likely to give to charity.
 HOWEVER, this effect disappears under experimental
conditions if you simply show a video of child poverty.
(SLIDE)
“Simply seeing someone in need at the grocery store—or looking
down the street at a neighbour’s modest house—can serve as
basic psychological reminders of the needs of other people,” he
says. “Absent that, wealth will have these egregious effects
insulating you more and more.”
Death
 One thing that unites wealth and religion is death, and the
question of what to do with your worldly assets when you’re
gone.
 There have always been those who would argue that it is better
to do your giving while living rather than waiting til you’re
gone:
 E.g. Puritan preacher Thomas Gataker said during a eulogy in
1620 that “...good done at our ende is like a lantern borne after
us, that directeth them that come after us, but afford us little
light; whereas the good done in our life time is like a light borne
before us, that both benefiteth them and us also alike.

 And as we’ve noted, those who have created their own wealth
sometimes have a firm belief that they should also give it away
during their lifetime
 E.g. Carnegie: “He who dies rich dies thus disgraced”
 BUT: giving it all away is actually far harder than it sounds,
so many wealthy people are still faced with a question of what
to do with their legacy
 AND: this has been a crucial part of the development of
philanthropy, because endowed trusts and foundations have
been important players for many years both here and in the
US.
 The very fact that endowed organisations are designed to
exist for the long-term is one of their key strengths. It gives
stability, sustainability and the ability to take a long-term
approach to social issues.
 HOWEVER, there is a flipside: there have been major
problems at times in the past when the purposes for which
endowed organisations were set up is no longer meaningful.
 This led to a tension between respecting the wishes of the
dead and meeting the needs of the living that has played a
significant role in shaping philanthropy
 AND the City played a particular role here.

 By the mid-nineteenth century there was a profusion of
parochial trusts in the City of London, many of whom had
purposes that made little or no sense anymore.
 Examples of City Parochial charities (Cathy may have
mentioned)
 A charitable trust solely dedicated to providing funds
for killing ladybirds on Cornhill, in the City of London.
 A trust whose purpose was to maintain an oil lamp at
the corner of Billingsgate “for ever”.
 A (possibly apocryphal) fund to buy faggots of wood
for burning heretics.
 BUT: the tension was not limited to London
 Other examples of the difficult/frivolous dead:
 Thomas Nash Nash left money to the bell-ringers of
Bath Abbey on condition that every year on the
anniversary of his wedding they should “[ring] the
whole peal of bells with clappers muffled various solemn
and doleful changes allowing proper intervals for rest
and refreshment from eight o clock in the morning until
eight o clock in the evening” and that conversely, on
the anniversary of his death, they should “ring a grand
bob major, and merry mirthful peals unmuffled, during
the same space of time, and allowing the same intervals
as above-mentioned, in joyful commemoration of my
happy release from domestic tyranny and
wretchedness.”

 A story recounted in The Times of, “[a] Toronto lawyer,
[who] with that quiet irony which lawyers sometimes
use to season their dreary tasks, has recently
bequeathed a fortune of two million dollars to persons of
a carefully chosen inappropriateness. Valuable brewery
shares go to strongly Prohibitionist Methodist ministers
on condition that they play their full part as directors.
Shares in racing courses are allotted to well-known
opponents of the Turf, on the same terms of active
participation. If the bequests are refused they go after
nine years to whichever woman in Ontario has had the
largest family in the meantime. That lawyer indulged to
the full the natural human impulse to make an
impressive exit and to leave a stir behind.
Taxes
 The controversy caused by these examples of redundant or
frivolous legacies had a major shaping effect on charity law in
the UK.
 E.g. Led to formation of the modern Charity Commission,
when the existing commissioners had to be imbued with
greater powers to overturn the original purposes of many of
the City parochial trusts
 ALSO: The tension between legacy giving and giving while
alive also provided a catalyst for the development of the tax
breaks on donations that we have today.

 Tax wasn’t actually a huge factor for much of the history of
philanthropy, as there were no tax breaks for giving
 Since the introduction of the income tax in 1799, there have
been tax breaks for charitable organisations, but there were
no separate tax breaks for gifts to them by individuals
 This changed slightly in 1842, when it became possible for
individuals to get relief on their gifts via a deed of covenant
(EXPLAIN), but it was only ever a workaround
 THERE REMAINED a disparity between the tax treatment of
endowed organisations and those relying on donations
 William Gladstone had a real bee in his bonnet about this,
largely due to his antipathy towards inherited wealth. His
proposed solution, however, was not to extend charitable tax
relief to donations, but to extend income tax to endowed
charitable organisations!
 Gladstone put this proposal before Parliament as Chancellor in
1863, and it met with a furious response from many other MPs,
and from the charitable sector of the time.
 Obviously many of the great and good of London society were
involved in charities, and The Times reports that many of them
turned up in Gladstone’s office as part of a deputation that was
so numerous that many of these august figures had to stand up
over even wait in the hall.

 The issue of charity tax also became another point of
difference between Gladstone and his long-time rival
Disraeli (SLIDE)
 Gladstone lost this battle and the status quo was maintained
until 1922, when the first official charity tax break was
introduced in the UK.
 BUT to add further confusion to the story, this was actually a
mistake!
 The 1922 Finance Act contained measures designed to combat
a number of loopholes in tax law that were seen as
problematic, including the use of covenants.
 The government couldn’t get rid of them outright, but did
introduce a new stipulation that they would not be valid if they
were for a period of less than 6 years
 HOWEVER: this now meant that, by implication, deeds of 7
years were now officially sanctioned (having had the status of a
gentleman’s agreement before then), and the charitable deed
of covenant was born
 SO: not only did we lag behind the US in introducing tax breaks
on giving (they introduced them in 1917 as part of the War
Revenue Act), we didn’t even intend to do it!
The “philanthropic City State”

 One of the long term effects of introducing tax breaks on
giving was that it made philanthropy more political
 Those who questioned philanthropy’s legitimacy could now
validly argue that it wasn’t just “up to private individuals what
they do with their money” because they were also receiving a
generous subsidy from the State.
 This is an argument that has become more pervasive as the
availability of tax breaks for donations has increased, and has
shone something of a spotlight on the role of philanthropy as a
way of funding public institutions
 Looking back at the history of the City of London, certainly in
the Victorian era, this was something they totally took for
granted. No-one really questioned the received wisdom that
dealing with social problems through philanthropy was by
far the preferable route, and that State action was only an
undesirable last resort.
 The Times, in 1856 said:
We do not wait for the instigation of the Government or the
dictation of a central bureau. The individual eye sees, the
individual hand indicates, the social malady. Individuals’ charity
finds the remedy. If the experiment succeeds, Parliament and
Government follow in the wake, often after an interval of years.
But it rarely, very rarelyhappens that in England any great
scheme of comprehensive benevolence is initiated by the

Government, which is only too happy to await the results of
private enterprise and private experience.
 The growth of the “philanthropic City State” in London was a
reflection of a wider experiment in the Victorian era (whether
conscious or unconscious) of meeting the needs of society
through philanthropy.
 The general conclusion is that this experiment was a failure,
although perhaps a glorious one. As David Owen says in his
wonderful book English Philanthropy 1660-1960 :
“(It is not stretching the point to describe) the attempt to create
by private effort a series of universal social services as ‘one of the
magnificent failures of our history’. Beyond doubt it was a failure,
however magnificent. In the course of the century, as it became
plain that production had won out over population growth and as
the realities of life in an industrial society defined themselves
more clearly, men began to readjust their social thinking.
Charitable agencies...could do much for individuals- and here
their contribution continued to be indispensable... But when the
problem was seen as one that...had little to do with the actions
of individuals... then the shortcomings of private charity lay
exposed. To help individuals handle the unavoidable and grinding
poverty of their lives with what success they could...was one
thing; to ask why and whether destitution and the evils
associated with it were necessary in modern society raised a
different order of issue...[I]t grew obvious that the major social
tasks lay well beyond the resources of private charity, however
ambitious its aspirations and devoted its performance...[I]t
became only a matter of time until the state would move,

cautiously or decisively, into areas previously occupied by
voluntary agencies...”
 And there is a whole narrative about how the growth of State
action and the creation of the welfare state changed the role
of charity and philanthropy...but that is for another day.
 What is interesting is that the idea of a philanthropic city-
state (as London was in Victorian times) has recurred on
occasion. For instance in New York under the reign of mayor
Michael Bloomberg. (SLIDE)
 Bloomberg himself is a major philanthropist and made the
encouragement of philanthropy as a way of supporting public
institutions a key part of his policy approach.
 I should point out that Bloomberg has always been very clear
that philanthropy was NOT a replacement for public
spending. (SLIDE)
 What is particularly interesting is that whilst Bloomberg’s
tenure as mayor brought with it many improvements on the
face of things in terms of crime reduction, renewal of public
parks etc, it may have come at a great cost in terms of
inequality.
 His successor, the democrat Bill de Blasio, (SLIDE) won by a
landslide on an anti income-inequality ticket and has so far
displayed a much less positive attitude towards
philanthropy. (SLIDE)

 Perhaps even more starkly, in Detroit (SLIDE)- a city with
significant economic problems- philanthropy has actually had
to step in to take responsibility for providing services and
meeting needs that are clearly the responsibility of the local
government, but which it is unable to perform.
Formalisation of giving
 Moving away from the role of philanthropy in society and its
relationship with the state, the history of the City can also tell
us a lot about the practice of philanthropy.
 The City is about making money and doing business, and it has
often carried this approach over to giving in ways that have
shaped modern charity.
 The most important of these, and something we usually take
for granted is the idea of “associational philanthropy”.
 At first, philanthropy was very much about individuals giving
to other individuals. But, as the scale of social problems
became more apparent and the model of the joint stock
corporation took hold in the commercial world, the idea of
setting up stand-alone charitable organisations that could take
subscriptions from a wide range of interested donors and
perform necessary good works came into being.
 This provided the starting point for the notion of the
“voluntary” or “non-profit” sector that we have today

 Interestingly, as technology simultaneously makes the world
both larger and smaller, there are signs that things might be
coming full circle.
 Donors in the US, frustrated by the challenges of giving aid
effectively overseas, have developed initiatives like
givedirectly.org, (SLIDE)
 This allows donors simply to give money to individuals in
developing countries and let them decide what to do with the
money.
 This resurrects the idea of philanthropy as a person-to-
person activity, and there is economic evidence to suggest
that (in the right circumstances) this is actually a very effective
way to give)
 And this word “effective” bring us to my other point: the City
has often been the driving force behind efforts to make
philanthropy more effective by applying greater rigour to its
practice and measurement.
 In the Victorian age the focus was on developing a new model
of “scientific philanthropy” which would match the desire for
rationality and rigour that was to be found in many other areas
at the time.
 It was very much felt at the time that bad charity was worse
than no charity at all CARNEGIE QUOTE (SLIDE)

 At the forefront of this movement was the “Charity
Organisation Society” of London (SLIDE) which positioned
itself as the scourge of what it saw as one of the great evils of
society: indiscriminate charity.
 NB: It even produced “cautionary cards”, (SLIDE) listing
organisations and individuals that it warned people against
giving to (SLIDE)
 It made itself extremely unpopular as a result of its
abrasiveness, and also as a result of its dogmatic, moralising
view of poverty, which it firmly believed to be a failing of the
individual rather than of wider society.
 This was very much tied to the idea of a clear distinction
between the “deserving” and “undeserving” poor, which
continues to be contentious even today
 But at least some of the legacy of the COS lives on even today,
in the form of the strong contingent of those in the charity
world who advocate for rigorous “impact measurement”
(probably minus the negative views of poverty)
 Obviously, in one sense this is a no-brainer: why on earth
would a donor not want to know that their giving was actually
effective?
 However, there has been something of a backlash recently
(SLIDE)

 Critics have argued that we cannot ignore the fact that
philanthropy is about a mixture of head and heart
 AND have argued that there are many important elements of
the value that charities bring which are not captured by
existing metrics. SO: by sticking rigidly to these metrics we risk
falling into the trap of valuing what is measurable, rather than
trying to measure what is valuable.
Conclusion
 We previously heard how philanthropy has played an
important part in the history of the City of London.
 Hopefully I have given you some sense of the important role
the City of London has played in the history of philanthropy.
 Not only has it been directly responsible for developments that
have shaped modern philanthropy, but it has often acted as a
microcosm of larger philanthropic themes
 And many of these themes, as we have seen, are important
even today.
 I believe that studying the history of philanthropy in general,
and that of the City in particular, can give us great insights into

some of the challenges we facer in trying to build the UK’s
culture of philanthropy.

History of philanthropy in city of london guildhall library event

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