Charitable Giving and Philanthropy

Like many developed economies, the UK has a strong tradition of philanthropic and charitable behaviour. Historical evidence reveals the important role which individual and business philanthropy has played in building the social and economic wealth of UK society. Set against this background, it is recognised that changes in socio-economic and political environments combined with the emergence of a global economy have encouraged new approaches to such philanthropy (Schervish, 2003; Bishop and Green, 2008). Wealthy individuals, including successful entrepreneurs who have amassed significant personal wealth, are seeking to give away and redistribute this wealth during their lifetime rather than through bequests. Similarly, organisations with a strong commitment to corporate social responsibility are investing in increasingly sophisticated mechanisms and structures, including charitable foundations, to support this commitment and the redistribution of organisational wealth. Recognising these changes, this research which forms one ‘spoke’ of the Centre for Charitable Giving and Philanthropy, seeks to yield original empirical evidence regarding contemporary approaches to and involvement in individual and business philanthropy. Using such evidence, the research seeks to inform theory, policy and practice in the area of individual and business philanthropy.

Using a cross-national comparative framework, the study seeks to explore the importance and impact of differences in cultural, religious, institutional, socio-economic and historical settings on contemporary approaches to philanthropy. The conceptual framework developed for the study is informed by capital theory (Bourdieu 1986), the concept of hyperagency (Schervish, 2003) and process theory (Van de Ven and Poole, 1990, 1995); in particular Firkin’s (2003) notion of ‘entrepreneurial capital’ has helped develop our framework.

In designing the research the team have been cognisant of the requirement to develop a methodology appropriate to the robust investigation of contemporary entrepreneurial philanthropy particularly within the context of turbulent economic environments. To achieve this, the research design builds upon existing and develops new research expertise in a range of methodological techniques which, while established within the wider social sciences, have yet to be applied to their full potential for the study of philanthropy. Specifically, this includes: Critical Incident Interviewing (Flanagan, 1954), the Repertory Grid Technique (Fransella and Bannister, 2003), and both Life History Interviewing and Narrative Analysis (Chatman, 1978; Bal, 1985; Denzin, 1989; Czarniawska, 1998, Dyer and Wilkins, 1991; Reissman, 1993). The research design involves three phases. First, secondary data is being used to create a detailed database of engaged philanthropists. This includes individuals and foundations actively involved in large scale and regular philanthropic endeavours and wealth redistribution. From this database, purposive sampling will be used to identify a sample of individuals involved in wealth redistribution for depth-interviewing. From this, a smaller purposive sample will be identified for further detailed case-study research.

It is intended that the research will generate significant understanding of contemporary approaches to philanthropy. Current knowledge regarding the philanthropic activities of high net worth individuals and organisational foundations has largely been restricted to both analysis of secondary data and media interviews and coverage of very well known philanthropists who have acquired an almost ‘celebrity-like’ status for their philanthropic efforts. This research intends to build upon and complement such extant secondary analysis by collecting and analysing primary data regarding contemporary approaches to, involvement in such philanthropy together with the implications and effects of large scale and regular philanthropic commitments.

Such understanding will be useful for informing policy, practice and theory regarding individual and business philanthropy and will provide insights into the impact of differing historical, socio-cultural and economic environments on contemporary approaches to and involvement in engaged philanthropy.

References

Bal, M. (1985) Narratology: Introduction to the theory of narrative. Toronto: University of Toronto Press.

Bishop, M. and Green, M. (2008) How the rich can save the world: philanthro-capitalism. New York: Bloomsbury Press.

Bourdieu, P. (1986) ‘The forms of capital’ in J. Richardson (Ed.), The handbook of theory and research for the sociology of education. Greenwood Press, New York, NY.

Chatman, S. (1978) Story and discourse in fiction and film. Ithaca, NY: Cornell University Press.

Czarniawska, B. (1998) A narrative approach to organization studies. Thousand Oaks, CA: Sage.

Denzin, N. (1989) Interpretive Biography, Newbury Park, CA: Sage.

Dyer, W. G., Jr., and Wilkins, A. (1991) ‘Better stories, not better constructs, to generate better theory: A rejoinder to Eisenhardt’, Academy of Management Review, 16: 613- 620.

Firkin, P. (2003). Entrepreneurial Capital. In De Bruin, A. and Dupuis, A. (eds.). Entrepreneurship: New Perspectives in a Global Age. Aldershot: Ashgate, pp.57-75.

Fransella, F., Bell, D. and Bannister, D. (2003) A Manual for Repertory Grid Technique. (2nd ed.) John Wiley, London.

Flanagan, J. C. (1954) ‘“The Critical Incident Technique’, Psychological Bulletin, Vol. 54, No. 4, pp.327-356.

Reissman, C. K. (1993) Narrative analysis. Newbury Park, CA: Sage.

Schervish, P. (2003) Hyperagency and High tech Donors: A New Theory of the New Philanthropists, Massachussetts, Boston College: Social Welfare Research Institute.

Van de Ven, A. H., and Poole, M. S. (1990) ‘Methods for studying innovation development in the Minnesota Innovations Research Program’, Organization Science, 1: 313-335.

Van de Ven, A. H., and Poole, M. S. (1995) ‘Explaining development and change in organizations’, Academy of Management Review, 20: 510-540.

Over 150 years ago J. S. Mill famously claimed that: ‘Charity almost always does too much or too little. It lavishes its bounty in one place and leaves people to starve in another.’ More recently, it has been argued that the weaknesses of philanthropy include an ability to create a more equitable society through the redistribution of wealth. This Spoke undertakes five major projects which cumulatively respond to questions around charitable giving and social distribution. The outputs will include:

• a clear quantitative picture of the distribution of registered charities and charitable resources across England and Wales, including a disaggregated picture of income sources and of the distribution of charitable assets
• results of qualitative research on the contribution of the charitable sector to social well-being in a range of contrasting localities
• a clearer understanding of how UK donors make moral judgements about the needs of others
• updated data on perceptions of need and charitable benefit, the role that need plays in selecting beneficiaries, the size of the social space bridged by donations and the views of beneficiaries of their representation in fundraising materials
• analyses of the philanthropic behaviour of UK corporations and the identity of their beneficiaries.

Our approach to the redistributive effects of charitable giving involves five projects which will:

• identify the geographical distribution of charitable organisations, their income, assets and expenditure, and relate these distributions to indicators of need; analyse flows of charitable resources to particular communities and local perceptions of the efficacy of those flows in terms of meeting social needs; investigate the moral economy of charitable giving, working-class and middle-class philanthropy and the needs of others

• explore relationships between need, benefits and beneficiaries of charity
• identify the organisational and social meanings of corporate philanthropy and their correlates.

In relation to the programme specification, these projects will help us to:

• improve our understanding of how and where charitable resources are used by replicating important North American research on the distribution of charitable resources, providing a comparative perspective
• answer the question of whether or not charity mitigates or reinforces social and economic inequalities
• explore relationships between different types of donors and their beneficiaries.

Researcher Balihar Sanghera on Social Justice Philanthropy: implications for policy and practice.

The research proposes to offer a critical appreciation of social justice philanthropy by investigating ‘social justice’ funders, foundation trustees and leaders. The proposal’s objectives are twofold. First, the research will examine how philanthropy relates to social justice as practised by social change and community-based foundations and social justice and progressive funders in the UK. By exploring how a number of foundations and individual philanthropists pursue social justice and change, we will learn how they make judgments about what and to whom to give, what moral resources, traditions, customs and rules they draw upon in reaching their evaluation about giving, and what they mean by social justice philanthropy.

Second, the proposal will develop the implications of social justice philanthropy for policy and practice. By inviting leading practitioners, foundations, policy-makers, stakeholders and academics for a one-day conference to discuss the nature, diversity and merit of social justice philanthropy, the study will enable greater deliberation and guidance for the future. How can leaders and grant-making bodies intervene to produce more effective and valuable outcomes? Which ethical principles can generate meaningful ideas and practices in social change philanthropy?

Spoke 3 research grouping was designated broadly as ‘institutional giving structures’; the researchers identifying the following themes for study:

The changing nature and strategies of the range of philanthropic vehicles – or ‘institutions’ - (the private and public foundation models, government giving channels) , data on their directions of giving and the leading institutions which they fund; also the public policy and public management structures and climates , which support or challenge those vehicles.

This theme is producing wide-ranging research (foundations’ strategic directions) . Its initial work is addressing theoretical and conceptual bases for philanthropy – choice, innovation, governance, rationing – all of which have important implications for fundraisers’ informed understanding of their working environments. Its annual publication of data on the UK’s largest institutional giving and receiving organisations (CMM) provides a critical data source, benchmark and analysis base for fundraisers.

How much do charities fundraise from the public each year? What do the major foundations and corporate donors give to charity? What are the annual trends?

A priority for CGAP is to publish up-to-date research on trends in giving and philanthropy. This is more than ever important in times of recession. In partnership with CaritasData and others, CGAP is providing research and data on trends in the voluntary income given to charities.

Major fundraising charities, charitable trusts and corporate donors

• annual tracking of trends in giving to charities through analysing the financial information in the annual accounts of the UK’s largest 300 fundraising charities;
• annual tracking of trends in the grants made by the largest 300 charitable trusts through examining data in their annual accounts, with analyses of the income and assets which underpin their giving and philanthropy;
• identifying the UK’s largest 300 corporate donors, and tracking annual trends and patterns in their corporate community investment programmes, based on data drawn from their annual reports;

See Charity Market Monitor 2009 for the most recent results produced by Cathy Pharoah, Cass Business School, and published by CaritasData.

Youth sector

• mapping the scale of the youth sub-sector, with a review of the potential impact of recession on its voluntary and other income, drawing on existing and new data;

See the Prince’s Trust paper on youth sector, for a summary of the report written by Cathy Pharoah and Jenny Harrow, Cass Business School, and published by the Prince’s Trust

Arts sector

• a new comparative international study of trends in the arts sector in the current turbulent environment, based on a review of data from various sources

Watch the CGAP website for details of this new research written by Cathy Pharoah, Cass Business School, which will be included in a new book also covering sports and social services sub-sectors across Europe: it has been supported by the EU’s CINEFOGO programme, and will be published by NOMIS later this year

Family Philanthropy

• what are the trends in the giving of the wealthiest families in an era which has seen increasing personal wealth at the global level? Funded by the Pears Foundation, CGAP, Cass Business School, has carried out research which tracks annual trends in giving by the major family foundations in the UK, US, Germany and Italy.

See Family Foundation Philanthropy report for a report on the results, produced in collaboration with Bologna University in Italy, Humboldt University in Berlin, and the National Center for Family Philanthropy in the US.

Legacy giving

what are the trends in giving through legacies today? what financial, social and motivational factors are likely to influence future legacy giving? A review of current research, with a particular focus on the impact of recession, was carried out by CGAP in collaboration with the Smith Institute and RememberACharity.

See Family Foundation Philanthropy report for the results of the research produced by Jenny Harrow and Cathy Pharoah, Cass Business School, and published by the Smith Institute.

Beth Breeze - How do donors choose which charity to support?

Eleanor Shaw - Individual and Business Giving

John Mohan - Charity and redistribution

Balihar Sanghera - Moral Judgements, Ethics and Social Class: The Moral Economy of Giving