A Note by the Director (Ditchley 2002/13)
8-10 November 2002
Over the weekend of 8-10 November, a number of us gathered at Ditchley to discuss the role of philanthropy in Civil Society. We were fortunate in the range of experience around the table which included those with expertise on tax law as well as those who have helped to run a range of charity and volunteer organisations. The tension between professionalism and passion ran through our discussions. We were also fortunate to have in the chair someone who had experience in legislating on voluntary organisations as well as success in fundraising.
We grouped our discussions around three main themes. Motives and Attitudes towards philanthropy – the Why; Networks and Frameworks – the How; and Priorities and Examples – the What.
In looking at why people gave either time or money to charities, we soon became aware of the profound cultural differences, based on historical experience, between our various countries. In the USA there was a strong tradition of giving, based partly on distrust of the welfare state, partly on the fact that early settlers often moved across the country ahead of the government and had, therefore, to provide their own schools and amenities, and partly on the social prestige which comes from being a generous donor in your local community. This brought us to one of the fundamental differences between the US and the UK. In America wealth was celebrated. In the UK, rich people did not want to draw attention either to their wealth or to their giving. In Germany, we noted that the State was considered to be the dominant force in pursing the public good. In France, voluntary action was viewed with suspicion as an interference in the relationship between the citizen and the State. In Canada there were elements of both European and North American traditions. It was pointed out that differences not only existed between countries but within countries themselves. In the US, giving in the North-East differed from the Southern States and in Canada between Quebec and the other provinces. A participant noted that charity was a devolved issue in the UK with a number of official actors involved.
Motivations to give and volunteer were, we thought, deep and complex. Sometimes they appeared rational and self-interested and sometimes spontaneous and emotional. In looking at the alternative question – why do so many people not give – we thought that in part, our societies had become decommunalised. We asked ourselves what could be done to start the giving habit at an early age. How could we persuade the 25-30 year olds who were under considerable pressure in their working lives, to think about giving. Some of us suggested payroll giving, with the young encouraged to think about the charity they had chosen for their contributions. Others thought a key consideration for young people was to feel that their efforts could really make a difference. At schools, some of us thought that a culture of giving could be encouraged by new curriculums, more extensive opportunities to volunteer and, indeed, allowing young people to administer funds themselves. We heard of one fund in the USA where up to $6m had been allocated and administered by young people to good effect. The issue of whether young people at school or college should be encouraged to volunteer either through the school/university admissions policy or financial incentives from the state, was also discussed with a feeling that direct Government payment was not the right answer. This was probably best handled by the institutions themselves.
The role of the media came up at various points in our discussions with many of us wishing that the press and broadcast media could be persuaded to give more positive coverage to volunteering and the philanthropic sector more generally. It was pointed out that the cut-throat nature of the written press, particularly in the UK, did not naturally lend itself to this sort of reporting. But, we were told, that there were organisations like the Chronicle of Philanthropy in the US which publicised good examples of giving and also that, if care was taken to research and present a “good story” it was possible to get items into the national or local press.
In looking at the role of tax laws we were advised that they tended to reflect the values of society. We spent some time discussing the role of tax incentives in influencing the level of giving and differed between those who thought they were of major importance and those who thought other factors to be of equal importance. Some of us concluded that tax incentives were probably of most importance to the biggest givers.
In looking at networks and frameworks, we came to the conclusion that, following the reforms in the UK in 2000, there was not much difference between the tax systems in the US and the UK. There were now real incentives for UK donors to give to charities. Nevertheless, the experts among us thought that the UK system was more complex than the US in achieving the same financial benefits. A general comment was made that tax systems should not only be nimble in adjusting to changing economic circumstances but should also aim to allow as many options for philanthropy as possible. We spent some time on Charitable Remainder Trusts which had facilitated major donations in the US. Some thought that such Trusts might, with advantage, be introduced in the UK and appealed for information to back their case. Overall, however, our general conclusion was that the most pressing task in the UK was to increase public understanding of the benefits of the new system. We also thought that larger charities might help smaller charities to understand and exploit the new opportunities. We looked at the difference between a tradition of reactive (small change) giving in the UK and planned giving in the USA. Notwithstanding the advantages of the latter, we were informed that small sums could nevertheless achieve major goals. The Air Ambulance Network in England and Wales was an example. We were, however, told that overall the level of giving in the UK had not kept pace with the general increase in wealth.
We considered the questions of governance and the role of Boards of charities. It was suggested that Boards and Trustees should be made personally accountable for any mismanagement of a charity’s assets which would require a change of legislation in the USA. There was a difference of view between UK and US participants about the composition of Boards. On the US side, it was thought that a Board gained credibility in fundraising if all its members were major contributors to the charity or, at least, gave in accordance with their means. This was resisted by British participants who warned against restricting the choice of Trustees in this way. Those who gave time and their other talents were equally valuable. Leadership was thought to be important with Soros, Gates and Turner in the US, and the Duke of Edinburgh Awards Scheme and The Prince’s Trust in the UK, mentioned as exemplary. But, cautioned the “small philanthropists” among us, there was a danger of philanthropy being associated only with wealthy or important people at the cost of local initiatives.
In the course of this discussion the issue of professionalisation emerged in its clearest form. On the one hand, it was argued that those dealing with, and raising, large sums of money should be professionally trained and advised. On the other, it was put strongly that philanthropy was a good impulse which should not be overlaid by too much organisation. Professionalisation of the voluntary sector could squeeze out the volunteers. Equally, the contributions of poor people should not be overlooked. The poor could be crushed by simply becoming recipients of charity. We heard about new developments in giving among the wealthy in the IT sector in the USA. They were more inclined to give to solutions than to problems and to look for venture capital models for their giving. Operating from flat horizontal organisational systems, they tended to treat charity in the same quick networking way as they conducted their business lives. The results had been remarkable among a younger generation which had previously been outside the philanthropic circle.
We noted that only about 10-20% of charitable giving came from corporations as opposed to private individuals. Overall the figures were even more striking with 4% of the population in the UK contributing 50% of all charitable giving while in the US, 1% contributed 40%. It was recommended that the new Companies Bill in the UK should clarify the legality of corporate contributions. At present it seemed some corporate executives thought that charitable giving might be illegal on the grounds that it might be deemed to confer direct benefit on the firm. Some firms, however, allowed their employees to give their normal working time to charities with full payment. Others in Canada, we were told, offered their staff stock options for time spent volunteering. In addition to corporate giving we looked at transnational giving. In principle there appeared to be no reason why giving direct to a foreign charity should not be tax deductible. But, with the exception of US and Canada where the systems were similar and mutual recognition allowed cross-border charitable giving, this practice remained under-developed, even in the EU where intra-EU giving might seem a logical development. But, objected the British participants, EU harmonization would lead to a considerable step back from their 2000 reforms given the strong governmental involvement in continental European systems. We noted that large corporations might export concepts of charity in their operations across many countries and expressed the hope that global corporate social responsibility might follow in the wake of market globalisation.
This brought us on to the relationship between philanthropy, which some of us defined as much by the giving of time and ideas as the giving of funds, and government. This relationship appeared to vary from country to country with Americans inclined to keep the government at arms length – the less state the better. Within wide limits individuals should be free to give their money to the causes they supported. Others saw a broader and deeper relationship which included an element of government funding flowing through voluntary organisations to deliver specific policies. Although public/private partnerships were not viewed with particular suspicion in the US, some British participants pointed to the potential dangers of “flow-through” funds. The tendency of all governments to regulate and control should not be under-estimated and, if allowed to encroach too far could undermine the voluntary partner.
Another aspect of the relationship with government was the question of the value-added the voluntary sector could contribute. This question was answered, in the narrow sense, by pointing out that the voluntary sector had experience in working with particular groups of people. It worked in specific niches in society which were not touched by wider government policies and it could turn its particular knowledge into advocacy. More widely, however, it was claimed that philanthropy was an instrument of engagement and experiment. It was at the cutting edge of change. Because it had its roots in public attitudes and concerns it had a spontaneity which official programmes could not match. Some argued that we should celebrate its anarchic tendencies and accept that in taking risks, some efforts were bound to fail and that, however irritating to officialdom, small upstart advocacy groups were an important element of Civil Society. Judged more broadly than simple grant making, the real value-added of voluntary action (which was claimed to be more widespread in Europe than the US) was thought to lie in its impact on society in building social capital not necessarily on its efficiency in the delivery of services. We were warned against benchmarking simply against an efficiency criterion. Some volunteering might be inefficient but that did not mean it was not beneficial in a wider sense. The economists among us pointed out that trying to produce evidence of efficiency by numerical measurements could be a misleading exercise – what you measure is what you get. Smaller charities did not necessarily follow fashionable causes and helped to act in a “counter-cyclical” manner.
In the course of discussions we made a number of policy recommendations and identified, through comparisons of practice in our various countries, issues which deserved further study. Some of them were as basic as inculcating a willingness to ask for help (particularly in the UK) – more vigorously but not more aggressively added one participant – to Caring Canada Awards which recognised giving in the community, lobbying in Brussels or capitals by the voluntary sector to prevent laws emerging with unintended and unfortunate effects (eg through data protection or restrictions on working time) etc.
I am grateful to all those who gave their time and experience to making this conference such a success. This was our second conference on Civil Society in the last four weeks and taken together, they show how much we have to learn from each other on questions which lie at the heart of the healthy development of our societies on either side of the Atlantic. I would like to record my thanks to Bob Conway for giving financial support to help meet the costs of the conference and last, but certainly not least, to John Brademas for guiding our discussions so effectively from the chair.
This Note reflects the Director’s personal impressions of the conference. No participant is in any way committed to its content or expression.
Chairman : The Hon John Brademas
President Emeritus, New York University (1992-); President, NYU (1981-92); Member, 86th-96th Congresses (1959-81); Chairman: President’s Committee on the Arts and the Humanites; National Endowment for Democracy; American Ditchley Foundation; a Governor, The Ditchley Foundation CANADA
Mr Bryan P Davies
Chief Executive Officer and Superintendent of Financial Services, Financial Services Commission of Ontario (2002-); formerly: Government of Ontario (1975-92); Senior Vice-President, Corporate Affairs, Royal Bank of Canada (1994-2002)
Mr Arthur B C Drache QC
Partner, Drache, Burke-Robertson & Buchmayer; contributing editor, The Financial Post; adjunct professor, Queen’s University School of Policy Studies; editor, The Canadian Taxation of Charities and Donations
Mr David Elton
President of two private foundations, and a Director of a third foundation; Chair, Philanthropic Foundations and Professor Emeritus of Political Science
Professor Al Slivinski
University of Western Ontario (1980-); Chair and Associate Professor, Department of Economics; formerly: member Research Advisory Board at Independent Sector, Washington DC GERMANY
Dr Walter Homolka
Managing Director, Alfred Herrhausen Society for International Dialogue
Dr Felicity von Peter
Director, Philanthropy and Foundations Division, Bertelsmann Foundation
Rupert Graf Strachwitz
Director, Maecenata Institut für Dritter-Sektor-Forschung; President, The Duke of Bavaria’s Administration (1980-87); Vice-President, German Caritas (1984-85); Chairman, Kulturstiftung Haus Europa (1990-); author UNITED KINGDOM
Dr Helmut Anheier
Director, Centre for Civil Society, London School of Economics and Political Science
The Rt Hon Paul Boateng MP
Chief Secretary, HM Treasury; Member of Parliament (Labour), Brent South (1987-)
The Rt Hon Virginia Bottomley JP MP
Member of Parliament (Conservative) Surrey SW (1984-); Partner, Odgers Ray & Berndtson (2000-); a Governor, The Ditchley Foundation
Chair, Community Fund
Ms Clare Brooks
Assistant Director, Network Services, Community Foundation Network
Director, Institute of Philanthropy, University of London
Professor Nicholas Deakin
Visiting Professor, Centre for Civil Society, London School of Economics (1996-); Chairman, Commission on the Future of the Voluntary Sector (1995-6); member, Governing Council, Family Policy Studies Centre (1987-); author
Ms Amanda Delew
Director, The Giving Campaign
Mr Stuart Etherington
Chief executive, National Council for Voluntary Organisations (1995-); formerly: Royal National Institute for Deaf People: Public Affairs (1987-91); Chief Executive (1991-95)
Mrs Joanna Foster CBE
Chair, Lloyds TSB Foundation for England and Wales (1997-); Chair, The Nuffield Orthopaedic Centre, NHS Trust, Oxford (2001-); Deputy Chair, Board of Governors, Oxford Brookes University (1998-)
Mr Alan Grieve
Chairman, the Jerwood Foundation
Mr Richard Gutch
Director for England and UK, Community Fund (2001-); formerly: Assistant Director, National Council for Voluntary Organisations (1985-92); Chair, Association of Chief Executives of National Voluntary Organisations (1997-98)
Mr Les Hems
Director of Research, Institute of Philanthropy, University College London (2000-); formerly: Head of Research, National Council for Voluntary Organisations (NCVO) (1994-98)
Ms Margaret Hyde
Director, Esmée Fairbairn Foundation
Chairman, The Giving Campaign; Human rights lawyer; Deputy Chairman, Allied Dunbar Assurance; Chairman, National Health Service Authority and Trust; formerly: Chairman, OXFAM
Dr Rob John
Director, World in Need
Mr Andrew Knight
Chairman: News International plc (1990-94); Member: Steering Committee, Bilderberg Meetings (1980-); Advisory Board, Center for Economic Policy Research, Stanford University (1981-); Advisory Council, Institute of International Studies, Stanford University (1990-); a Governor and Member, Council of Management, The Ditchley Foundation (1982-)
Mr Michael Littlechild
Chief Executive, GoodCorporation
Director, Philanthropy UK; member, Business Advisory Group, Comic Relief (1997-); Trustee, the Royal Marsden Cancer Fund (2002-); CARE International UK
Professor Jeremy Moon
Director, International Centre for Corporate Social Responsibility, Nottingham University Business School
Dr Jill Pellew
Senior Vice-President, Grenzebach Glier Europe (2000-); formerly: Development Executive, Chatham House Foundation Inc (1984-88); Director of the development office, University of Oxford (1994-99)
Lord Phillips of Sudbury
President: Citizenship Foundation (1989-); Solicitors Pro Bono Group; Trustee, the Scott Trust (1992 02); member, National Lotteries Charities Board (1994-96); broadcaster; author
Ms Narmada de Silva
Head, Personal Tax and Finance Bill branch, Tax Policy Team, HM Treasury
Mr Mike Smithson
Director, Oxford University Development Office
Sir Sigmund Sternberg OstJ KCSG JP
Patron, International Council of Christians and Jews; Member, Board of Deputies of British Jews; Governor, Hebrew University of Jerusalem; Founder and Life President, Sternberg Centre for Judaism; founder, The Sternberg Foundation; Three Faiths Forum; Religious Coordinator, World Economic Forum
Mrs Barbara S Thomas
Deputy Chairman, Friends Provident Life Assurance Company; Executive Chairman, Private Equity Investor plc; a director: United Kingdom Atomic Energy Authority; Capital Radio plc; Allders plc; Quintain Estates and Development plc; The Energy Group, DTI
Sir John Weston KCMG
Honorary President, Community Foundation Netword (UK); Council member, IISS; formerly: Diplomatic Service (1962-1980; Ambassador and Permanent Representative: to NATO (1992-95); to the United Nations (1995-98); a Governor, the Ditchley Foundation UNITED STATES OF AMERICA
Mr Henry Christensen III
Partner, Sullivan & Cromwell, New York
Mr Robert Conway
Senior Director, The Goldman Sachs Group Inc (2000-); President, Harris Manchester College, Oxford University; member, Board of Trustees: University of Notre Dame; a Governor and Member of the Council of Management, The Ditchley Foundation; member, Board of Directors and Treasurer, The American Ditchley Foundation
Professor Harvey P Dale
Director, National Center on Philanthropy and the Law, New York University; Founding President, The Atlantic Philanthropies
Mr Michael F DiNiscia
American Ditchley Foundation
Mr Peter Hero
President, Community Foundation Silicon Valley (1989); a director, The Foundation for a Civil Society; The National Philanthropic Trust; Stanford University Haas Center for Public Service; author
Ms Debra LaMorte
Senior Vice-President for Development & Alumni Relations, New York University
Mrs Adele Simmons
Senior adviser to the World Economic Forum; member: Global Philanthropy Forum; Advisory Committee to the World Bank Institute and the Global Equity Initiative; former President, John D and Catherine T MacArthur Foundation
Mr James Allen Smith
Senior Adviser to the President, J Paul Getty Trust; trustee: Robert Sterling Clark Foundation; Creative Capital Foundation; director and former chairman, Center for Arts and Culture; visiting professor, UCLA