The joy of giving: why the rich should be encouraged to become more philanthropic

  • 4 November, 2011
  • Philanthropy
  • Politics

It was Gamaliel Bailey, the 19th century American journalist, who wrote: “Never respect men merely for their riches, but rather for their philanthropy; we do not value the sun for its height, but for its use.”

I was reminded of Bailey’s perceptive quote from nearly 200 years ago when I learnt about the launch Wednesday afternoon of a splendid new initiative called “Legacy10”, which aims to get ten per cent of the UK population to give away ten per cent of their estate to charity in their wills.

It was good to see George Osborne, the Chancellor, and Jeremy Hunt, the Culture Secretary, present at the Tate Britain to endorse the campaign which is the brainchild of Roland Rudd, the founder of Finsbury, the financial communications firm.

In these difficult economic times, many charities are suffering from cash shortfalls and so I was delighted to see Sir Richard Branson, Jacob Rothschild and Charles Dunstone among the high-profile businessmen and entrepreneurs who have pledged ten per cent of their estate to good causes.

My views on philanthropy were formulated more than 20 years ago when I started living and working in America in the late 1980s. I discovered that one of the most appealing traits of American life was the tendency of many wealthy individuals to see it as part of their civic duty to support charities. Having by then made some money as an entrepreneur, I soon became a convert to donating money to worthy and innovative causes.

Michael E. Porter, a business guru from Harvard Business School, was right when he said some years ago: “Billions are wasted on ineffective philanthropy. Philanthropy is decades behind business in applying rigorous thinking to the use of money.”

It is for this reason that I have generally favoured giving money to charities and good causes in which I have some involvement. I hate seeing precious resources squandered and I prefer to take a hands-on approach. This enables me to drive a project forward rather than risk giving money to a badly-run charity and see it frittered away or remain stagnant in a bank account.

I also tend to give money to causes that are dear to my heart: law and order, education and gallantry to identify just three focuses for my philanthropy. I am immensely proud to have foundedCrimestoppers, the only charity in the UK which solves crimes, because it gives the man in the street a means of fighting back against criminality.

I am equally proud of my substantial support for Anglia Ruskin University (ARU), which I attended as a student, and for other educational schemes. And while the Lord Ashcroft Gallery at the Imperial War Museum is less than a year old, it is undoubtedly achieving its aim of educating and inspiring the public through championing acts great bravery carried out by service personnel and civilians alike.

It is a matter of public record that I have donated tens of millions of pounds to good causes over the past two decades but it has often been my smaller donations for specific causes – those that never become public knowledge – that have brought me immense pleasure.

I have left strict instructions in my will about how my estate should be dispersed. I am not a great believer in inherited wealth and, although I would never want any member of my immediate family to be desperately short of money, neither would I want them to inherit an obscene amount of money.

I have therefore left instructions that, after my death, more than 80 per cent of my assets should be left to a charitable foundation in my name. My close family members will be the trustees of the charity so that one of my main legacies will be for them to enjoy allocating substantial amounts of money to worthy causes.

I do think too that Governments should do their bit, through tax breaks, towards encouraging philanthropy. I therefore support the fact that in the UK, from next April onwards, any estate which bequeaths at least 10 per cent of its value to a charitable or cultural cause will enjoy a reduction in inheritance tax, from 40 per cent to 36 per cent.

It is interesting, if a little sad, that while as many as 74 per cent of the population give to charities, only seven per cent leave charities money in their wills. The new campaign, Legacy10, aims to increase that seven per cent figure significantly and, in the process, to raise billions of pounds for good causes over the coming years. I, for one, wish the initiative every success.

Read this story on Conservative Home

Related Stories