Rethinking charitable giving: Why it’s important to give more meaningfully, not just ‘more’
The urge to help through charitable giving has come to the fore during the coronavirus pandemic. Indeed, donors feel better and more in control for taking some positive action during the crisis. But with 84% of UK charities reporting a decrease in their income during lockdown last year, how can we make a real impact with our philanthropic gestures in 2021?
You may consider 2020 to be a year best forgotten; however, there were glimmers of light that shone through the dark cloud of COVID-19. Indeed, you might find a particularly bright silver lining in the actions of philanthropic donors, large and small.
Twitter co-founder Jack Dorsey pledged $1 billion1, Martin Lewis of MoneySavingExpert has distributed £3.4 million through a newly created emergency fund2, virtual quizmaster Jay Flynn MBE has raised more than £750,000 for various charities3, and more than 1.5 million people supported Captain Sir Tom Moore in raising £30 million plus for NHS charities.4
In a crisis, the urge to help through charitable giving is as old as the need to battle and cure disease. It makes sense that donors feel more in control for taking some positive action during the current crisis, and companies have gained valuable recognition for stepping up to help. Dutch philanthropy scholars René Bekkers and Pamala Wiepking set out eight key drivers of giving, all of which have been triggered by the current coronavirus crisis: awareness of need, solicitation, costs and benefits, altruism, reputation, psychological benefits, values and efficacy.5 Add to these drivers a sense of urgency – which always works to increase donations – and the result is an impressive collective expression of philanthropy.
It might seem crass to question such generosity. However, even the best intentions can have negative consequences or be implemented poorly. Concerns highlighted by commentators such as Rob Reich, Professor of Political Science at Stanford University, and author Anand Giridharadas include that the wealthy don’t give as much as they can or should; that major donors are a threat to democracy as they use their wealth to gain influence and status; and that the wealthy are too far removed from those they wish to help.
More meaningful giving
When it comes to giving better, ‘better’ is a loaded term – how do we determine what’s ‘better’ than what and what’s ‘better’ for whom?
Some would argue that ‘better’ philanthropy acknowledges the power dynamics and inequalities in society and seeks to address these. Others would argue that ‘better’ will come from not being led by donors’ preferences and passions, but from taking an objective and rational approach to identify the “most good” that resources can do, calculated by lives saved or quality of life metrics.
Whatever approach is taken, there’s a clear trend for modern philanthropists to shift from ‘cheque book philanthropy’ to having a more thoughtful, intentional plan. Rather than spread their money and attention across a variety of dissimilar causes, donors focus on the change they want to see in the world, becoming an active participant in solving a problem.
Michael Moody, co-author of Generation Impact: How Next Gen Donors Are Revolutionizing Giving, interviewed donors in their 20s and 30s and found they:
“consider just writing cheques – and especially waiting until [they] retire to write cheques – to be the most uninspired and ineffective way of giving. They want to give their time and their talent, and they want to do so in meaningful ways.”
As well as this shift to impact-driven giving, there’s also a significant rise in collective giving. Giving circles, which pool donors’ resources and decide together how best to allocate these funds, tripled in number in the US in the 10 years to 2016.6 There has also been recognition that social and environmental problems are complex, global and too big to be tackled alone, resulting in a rise in collaboration.
So, what’s next for philanthropy?
It remains to be seen how philanthropy will look in a post-coronavirus society. Will giving reduce due to a recession, or will people be more aware of needs and give more? Will the recent trend in increased funding for the environment continue? Will donors think locally or globally? Will the calls to tackle racial justice lead to a shift from giving money to deliver services to support for structural change?
What is clear is that the need will be great – 84% of UK charities reported a decrease or significant decrease in their income during lockdown. At the same time, 47% reported an increase in demand for their services.7
These debates can be perplexing and even overwhelming for a philanthropist who is seeking to use their money to make a lasting difference. Donors also put pressure on themselves – their money is precious, and they want it to make a difference and not be wasted.
So, what can you do? The priority is to make a start. Find a focus, listen to those active in your area of interest, and work with others. As attention shifts from emergency funding to investing in recovery, the charitable sector has an urgent need for more funds from thoughtful people looking to help. The rewards are great – for society and philanthropists.
How can Wellesley help you with charitable giving?
If you recently donated to charity at Christmas, or felt compelled to help a local cause during the pandemic, you could go a step further and use your Will to provide valuable support to future generations, by helping charities to continue their amazing work for years to come.
Pledging to charities in your Will is a brilliant way of leaving a positive legacy for the future – and what’s more, it can even reduce and, in some cases, eliminate your Inheritance Tax liability.
If you’re considering establishing a charitable trust during your lifetime, or making provisions for a legacy after your death, your Wellesley adviser can help ensure your charitable giving is both effective and rewarding. Get in touch on 01444 244551 to start planning your future, today.
1 www.philanthropy.com, 7 April 2020
2 blog.moneysavingexpert.com, 26 May 2020
4 bbc.co.uk, 1 May 2020
5 “A Literature Review of Empirical Studies of Philanthropy,” Nonprofit and Voluntary Sector Quarterly, 2010
6 “The Landscape of Giving Circles”, Collective Giving Research Group, 2017
7 “Impact on the charity sector during coronavirus”. Research from the Institute of Fundraising, NCVO and Charity Finance Group, June 2020
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