10 minute read
GIVE BACK BETTER
WITH AN ALMOST OVERWHELMING AMOUNT OF OPTIONS FACING PHILANTHROPISTS TODAY, CLAIRE WRATHALL LOOKS AT THE STRATEGIES TO BEST OPTIMISE GIVING
During the pandemic, despite the uncertainty facing the world, global giving rose. According to the Giving USA Foundation’s annual IRS data-based survey, Americans gave a record $471 billion to charity in 2020, an uplift of more than 5 per cent on the previous year. And almost a fifth of this figure came from ultra-high-net-worth individuals – those with assets of at least $30 million – who between January and October 2020 pledged $7.4 billion to Covid-related and social justice causes alone. But while the cataclysmic global events of 2020/21 boosted overall levels of giving – according to the Charities Aid Foundation (CAF), more than 30 per cent of the world’s population have given money to charity during the pandemic – they have also diverted funds from causes donors may have decided were less pressing. Such was the fall in donations to Cancer Research UK, for example, that it is cutting its spending on research by £150 million and its staff by a quarter.
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So, how best to identify need in order to give back effectively? “We have been advising our clients to really think through their favourite charities and what they want to still be here when [the pandemic] passes,” says Mark Greer, CAF’s head of private clients, because not everything is likely to survive.
CAF acts as both a consultancy and a bank for the non-profit sector operating in the UK and USA. Individuals can set up their own fund within the foundation, which takes care of all the administrative and compliance issues, out of which the donor is free to make gifts to the causes he or she wishes to support. Those seeking guidance
This page Dame Stephanie Shirley was the first person to drop off the Sunday Times Rich List due to her philanthropic giving tend to be advised to make unrestricted gifts rather than those that specify how the money should be used. Of course, charities need funds for frontline work, but they also need to pay staff salaries and rent.
When the German shipbuilder Peter Lürssen, CEO of the shipyard Lürssen, decided that of the “zillion charities that support the oceans in one form or another,” he would support the Blue Marine Foundation, he undertook to fund its core operating expenses. A decision its CEO, Clare Brook, has called “completely invaluable. Often in NGOs, people give money for specific projects, but no one actually pays for you to keep the lights on.”
There is personal benefit, too. Although there is neurological evidence that the act of transferring a donation can signal neural responses that make you happy, there is nothing quite like the satisfaction of knowing that, in some significant way, you have used your wealth to change the world for the better.
Take British IT pioneer Dame Stephanie Shirley, lovingly known as ‘Steve’. At the turn of the century, she was worth £140 million and ranked three places below the Queen in the 2000 Sunday Times Rich List of wealthiest women. Yet she gave away nearly £70 million of her fortune, mostly to projects and causes focusing on IT or autism, causing her to become the first person to drop out of the Rich List as a result of their philanthropy. However, she told The Times that she feels “empowered” by giving her wealth away: “The money I have let go has given me infinitely more joy than the money I have hung on to. Your money isn’t lost because someone else has it. It is realising its potential.”
For some, like former US president Jimmy Carter, it’s about creating a legacy. Thanks to the work of the Carter Center, which he established after he left office, guinea-worm disease, an excruciating condition found mostly in Africa, may soon go the way of smallpox, to date the only disease that has been entirely eradicated. When they embarked on the programme, there were 3.5 million cases a year across 21 countries. In 2020 just 27 people were infected in six nations. Of course, to support such a project, one has first to find it. Most wealth advisories and private banks have philanthropy specialists on their payroll to help investors select fulfilling ventures. And there is also a host of other specialist organisations and think tanks – New Philanthropy Capital, Philanthropy Impact, the Institute for Philanthropy among many – that can inspire and assist with due diligence to ensure that your donations are used effectively and in line with your objects.
Take the Philanthropy Workshop, a network of more than 450 active philanthropists – such as human rights advocate and investor Casey Box, retired tech executive Lorene Arey and women’s rights champion Lisa Kelley – spread across about 25 countries and ranging in age from their mid-20s to their 80s. Founded in 1995, it grew out of the Rockefeller Foundation to “really meet the needs of philanthropists who wanted to know how to get going and make an impact,” says Marie-Louise Gourlay, its managing director of Europe. Initially, it was “focused on what we call donor education, which was really taking people on a deep MBA-style programme” that gave new and aspiring donors “a strategic framework to move forward with”. Over time, it has evolved into a global community of philanthropists for which it continues to organise programmes with guest experts – from former presidents to grassroots leaders – thereby “accelerating learning about what works and what doesn’t” and enabling its members to pool intelligence and in some cases partner with governments to co-fund projects.
“There’s a lot of wealth just sitting there,” she says, “and we want to mobilise it by creating conversations about social and impact investing and by brokering connections [between people] who are able to work with one another and really drive action.”
“We don’t tell people where to put their money,” she adds. But they do help their members to identify the world’s most pressing and urgent issues. “Discomfort,” she adds, is a “compelling proxy for change.”
The gift of giving
Reynir Indahl, founder and managing partner of Summa Equity and chair of Summa Foundation, discusses philanthropic giving and introducing a 10 per cent ‘moral tax’
This page, from left Reynir Indahl, founder and managing partner of Summa Equity; A kayak cuts through melting ice; A snapshot of the work of Football Beyond Borders, an education and social-inclusion charity working with disadvantaged young people; philanthropists are asked to consider giving to arts and culture organisations and venues hit hard by the pandemic, such as London’s Royal Albert Hall I’m deeply worried about the challenges we have globally and how unfair our economic system is. I happened to be born in Norway where I got a free education and a Harvard MBA, partially funded by Norway. What if I was born in a different family in a different country? I feel a lot of responsibility to share my wealth because I’ve been greatly benefited by an unjust and unfair system.
Summa Equity is focused thematically on solving environmental, social and governance challenges. We’ve raised €1.6 billion since we started up in 2016 – 10 per cent of the carried interest and management fee goes into the Summa Foundation. While Summa Equity is investing to address challenges that can be solved in the commercial marketplace, the philanthropic foundation has been set up to address challenges that cannot be solved in a market-based way.
Our largest project is to save the Masai Mara Serengeti ecosystem [the most critical ecosystem globally for large mammals], together with LGT Venture Philanthropy and other parties. Our mission is to protect the Great Migration in Masai Mara, which has been impacted largely by the sale and fencing of Masai land. At current rates, the whole ecosystem would disappear within a 10-year time frame. Together with Basecamp Explorer Foundation, we’ve identified, leased and protected large corridors, so the migration can still happen. We’ve taken a systemic view of the whole ecosystem, which means not only making sure the wildlife can survive but ensuring the Masais also benefit. For example, we’ve created eco-tourism and education opportunities, and re-planted forests, creating entities that could apply for carbon credits – these will operate as a revenue share with the Masais who own the land.
Everyone at Summa Equity knows that 10 per cent of the carried interest and management fee goes to Summa Foundation – if Summa delivers average returns, this is expected to be about €60 million of our current funds. The figure comes from ancient thinking where all should give a tenth to those who are less fortunate than ourselves. We are all willing to share our wealth because seeing the results of our work and the wildlife prospering gives us tremendous meaning and pride. It gives much greater happiness than a new car or a bigger house.
When I realised I have much more than I need, I thought: “what should I do with the surplus? Should I save it for my children or help those disadvantaged?” I feel much more responsibility to make the system fairer by sharing what I have – and my family agrees. My wife and my daughters are very attached to, and contribute to, our projects, which brings us together as a family.
But giving away money is very easy. Real change comes from leadership and becoming part of the solution, not only paying your way out of it. I think all companies and individuals can make a difference. You can do it, for example, by setting up philanthropic projects, engaging employees and owners, and making it an integrated part of what the company does and its purpose. There is enough money in the investment industry if you do well, and just like everyone has to pay taxes, I call on the industry to impose a voluntary moral tax and take leadership in how that tax is used to solve our global challenges.
Where to give it
According to YouGov (Q3 2021), seven of the top ten most popular charities are related to medical research and care, and the rest were concerned with the welfare of animals. Your money might therefore go further directed to causes others tend to overlook.
THE ENVIRONMENT
There are thousands of charities working to clean up the environment but ClientEarth tackles climate change at a legal level. Described by its founder, James Thornton, as “a public interest law firm,” it helps governments “to write good laws,” implement and enforce them. But it also sues them (and corporations and their investors) if it believes they are accelerating climate change. For example, it has “stopped an entire generation of new coal-fired power stations in Poland,” he says; and sued the UK government over its violation of EU air-quality regulations – a case that reached the Supreme Court, which issued an injunction ordering it to bring the country into compliance.
SPORT
Manchester United and England forward Marcus Rashford’s campaigning for FareShare, the UK’s longest-running food redistribution charity, and his launch of the Child Food Poverty Taskforce raised the profile of philanthropy in sport. But there were already a wide range of football-related foundations. Take Football Beyond Borders, an education and socialinclusion charity that works with disadvantaged young people. According to its founder, Jack Reynolds, “Combining football with education [is] a fantastic way to develop so many of the key educational skills that young people need and encourage young people to thrive at school.”
ARTS AND CULTURE
The pandemic has been catastrophic for the arts. In the UK, individual giving to this sector fell by 42 per cent during the first nine months of 2020, and, during lockdowns, box office revenue fell to nothing. If the arts are to endure, their patrons and audiences need to support them. As for who to support, it’s really a matter of supporting those you’re most passionate about and don’t want to see go under. As one philanthropy adviser explained, this type of support is often the most personally rewarding, not only in terms of the impact your donations has on the beneficiaries, but because “you meet like-minded people who share your passions and can learn so much from seeing behind the scenes, whether it’s attending rehearsals or being invited into the conservation studios of art galleries”.
