As Harvard and others report, there is very little understanding of the magnitude of global philanthropy. Harvard describes its own major study on philanthropy as “broad strokes” and compounded by lack of data. Consequently the policy framework governing philanthropy is unlikely to maximise the potential of this significant economic activity. The pandemic may provide a timely opportunity to begin a process which both unveils the scale of philanthropy and, in so doing, affords the UK an opportunity for global leadership.
There are some important indicators that set the scene. Cap Gemini estimates today’s High Net Worth Wealth is valued in 2020 at $74 trillion. Harvard identified 150,000 charitable foundations by 2018, with collective assets exceeding $1.5 trillion. To put it in to some perspective, the UK’s net worth is £10 trillion according to the Office of National Statistics.
Philanthropy is a highly fragmented sector and its complexity is layered by culture and demographics. For example, institutional philanthropy is heavily concentrated in North America and Europe, while 48% of High Net Worth Individuals (HWNI) are under the age of 40.
The backdrop of the pandemic affords the UK an opportunity to demonstrate its credentials as a global citizen and a leading centre of global philanthropy. At a time when all governments are looking to maximise revenues to underpin public services, now is the moment for a process of discovery to provide some baseline data for global philanthropy. A process, in the form of a Commission for Philanthropy, would also come up with some policy recommendations that can inform countries on how best to foster philanthropy, and how to harness philanthropy.
The Commission should convene a group that comprises stakeholders in the philanthropic ecosystem including, but not limited to, philanthropists – individual and institutional, government, private sector, civil society and beneficiary organisations. The terms of reference should address the character and patterns of philanthropy; establish a baseline dataset of philanthropy globally; assess the complex and long-term implications of philanthropy on the role of the state, for public services – notably the provision of education and health – and for the voluntary sector; raise awareness among governments, individuals and international partners of the scale and effect of philanthropy; and propose policies and mobilize support for practices that facilitate, galvanise and support the philanthropic giving chain.
The optimal outcome of such a Commission would be to identify how philanthropy can best align philanthropic endeavour with national interest. It should also generate practical ideas and solutions – especially for lower income countries – on how to tap into the boom in global philanthropy, thus making an important contribution to Global Britain’s soft power diplomacy. It should also address the thorny issue of philanthropy in relation to high net worth wealth and taxation.
Britain is well placed to lead on such an endeavour since it is home to a thriving philanthropic sector, and leverages an obvious alignment between the role of the UK as a global services centre and philanthropy.
There are, of course, other emerging economic and scientific areas whose value is no less significant, and so warrants discovery. But perhaps the most compelling reason for philanthropy is that the act of giving is an innate part of the human condition. The pandemic has provided a powerful demonstration of collective generosity as people give what they can to help others.
The UK can make a valuable contribution in bringing together global expertise and talent to better understand a very significant economic activity about which there is relatively little knowledge or comprehensive data. It would be a fitting tribute to the Covid-19 pandemic and its many victims, if it serves as a catalyst to unleashing the full potential of philanthropy, enabling the many and not the few to access it, and informing policymakers how they can effectively marshal philanthropy in the national interest.
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