Building Bridges - Somerset Community College · Building Bridges...

Building Bridges

Philanthropy strengthening communities

Rhodri Davies and Louisa MitchellAdvised by David Carrington

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£10.00ISBN: 978-1-906097-36-3

Policy ExchangeClutha House

10 Storey’s GateLondon SW1P 3AY

www.policyexchange.org.uk

Community is an important element of a philanthropic culture.As well as the grassroots communities that are the focus ofmany philanthropists’ giving, the development of communitiesof purpose amongst like-minded donors is important for drivingforward philanthropy. In troubled economic times such as thosewe face today, strong networks amongst donors and solidpartnerships between philanthropists and communityorganizations provide the support necessary to keep the newbreed of philanthropists on their philanthropic journey. Showingcommitment in leaner times will confirm their role as leaders ofa modern British philanthropy.

This report builds on the work in our previous publication, Giveand let give, and considers attitudes and approaches tocommunity philanthropy. We interviewed philanthropists all overthe UK. We consider the roles that notions of community haveplayed in motivating their giving and guiding their philanthropicmethods. We look at their successes, as well as some of thebarriers they have faced in trying to act at a grassroots level andthe ways they have overcome them, in order to see what lessonscan be learned to help encourage and enable more effectivecommunity philanthropy in Britain.

Achieving a cultural shift is a big task. Greater understanding ofthe ways community can act as a catalyst for philanthropy andthe role grassroots giving can have in inspiring philanthropistswith less to give, can help achieve this task. This reportproposes a package of practical recommendations forharnessing the power of community for philanthropy, as well asconsidering inspiring examples of philanthropists from aroundBritain who have used communities as a focus for their giving.

Building Bridges Cover HDS.qxp 31/10/08 13:51

Policy Exchange is an independent think tank whose mission is to develop and promote new policy ideas which willfoster a free society based on strong communities, personal freedom, limited government, national self-confidence andan enterprise culture. Registered charity no: 1096300.

Policy Exchange is committed to an evidence-based approach to policy development. We work in partnership with aca-demics and other experts and commission major studies involving thorough empirical research of alternative policy out-comes. We believe that the policy experience of other countries offers important lessons for government in the UK. Wealso believe that government has much to learn from business and the voluntary sector.

Trustees

Charles Moore (Chairman of the Board), Theodore Agnew, Richard Briance, Camilla Cavendish, Richard Ehrman,Robin Edwards, Virginia Fraser, George Robinson, Andrew Sells, Tim Steel, Alice Thomson, and Rachel Whetstone.

Building bridgesPhilanthropy strengthening communities


About the authors

Rhodri Davies is a research fellow at PolicyExchange. In 2007, he co-authored Giveand let give: building a culture of philanthro-py in the financial services industry. Prior tohe had embarked on a DPhil in philosophybefore leaving to join a high-end executivesearch firm. He read Mathematics andPhilosophy at Oxford University and grad-uated top of his year.

Louisa Mitchell is a senior fellow of PolicyExchange. In 2007 she co-authored Giveand let give: building a culture of philanthro-py in the financial services industry. Prior tothis she wrote for the Financial Times, rantwo charities and was an investment

banker in London, New York and HongKong. She read Chinese at CambridgeUniversity.

David Carrington is an independent con-sultant (www.davidcarrington.net) work-ing with charities, companies and thegovernment on the funding and gover-nance of charities and social enterprisesand on the promotion of personal philan-thropy. He has been Chief Executive ofthree foundations and is a trustee of sev-eral charities. He is also a member of theSocial Investment Task Force and chairsthe editorial group of the PhilanthropyUK e-newsletter.

© Policy Exchange 2008

Published byPolicy Exchange, Clutha House, 10 Storey’s Gate, London SW1P 3AYwww.policyexchange.org.uk

ISBN: 978-1-906097-36-3

Printed by Heron, Dawson and SawyerDesigned by SoapBox, www.soapboxcommunications.co.uk

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Contents

Acknowledgements 5Foreword by Lord “Eddie” George 7Executive Summary 8

1. Community and philanthropy 11Definitions of wealth 11

1.1 Communities of place 111.2 Communities of interest 141.3 Social capital 14

2. Communities of place 162.1 Motivation 16Nick Ferguson, Argyll and London 16Michael Oglesby, Manchester 18Alexander Hoare, London 19Michael Head, Kent 21Jim McAllister, Surrey and elsewhere 24

2.2 Methods 262.2.1 Community Foundations 26London: A Special Case 31

3. Communities of purpose 343.1 Motivation 34Matthew Bowcock, Surrey 34Michael Campbell, Hampshire and Perthshire 36Jim O’Neill, London and Manchester 38Guy Hands, Southwark and Kent 40Michael Hintze, London and elsewhere 42The Arts: A Special Case 44

3.2 Methods 453.2.1 Venture philanthropy and social investment 45

CAN/Breakthrough 45The Private Equity Foundation 47Venturesome 49

3.2.2 Donor communities 513.2.3 Giving circles 52

Rosa: The UKWomen’s Fund – Maggie Baxter 52The Funding Network – Fred Mulder 54

3.2.4 Web 2.0 56GlobalGiving.co.uk 56Kiva.org 57www.greengrants.org 58Localgiving.com 59

4. Role of communities in continuing action 614.1 Engagement 614.2 Peer influence 624.3 “Touch” 624.4 Managing risk 644.5 Providing feedback 654.6 Managing the power relationship 65

5. Barriers to community philanthropy 675.1 Finding projects 675.2 Visibility 675.3 Undefined role 68

6. Community philanthropy and an action agenda 716.1 The ingredients for well-functioning community philanthropy 716.2 Action agenda 75

Bibliography 76Appendix 1: Where to go from here . . . 80Appendix 2: Methodology 82Appendix 3: Glossary 84

4

Acknowledgements

The authors wish to thank the following for their input, help and guidance:

Adele Blakebrough, Former CEO, CAN and Chair, Breakthrough Advisory Panel

Alex Hanratty, Deputy Chief Executive of St Clement & St James Community Project

Alexander Hoare,Managing Partner, C. Hoare & Co.

Angus MacDonald, Chairman, Specialist Waste Recycling Ltd.

Beth Breeze, Researcher, University of Kent

Chris Robinson, CEO, The Mayor’s Fund for London

Clare Brooks, Director, Network Development

David Gold, Chair, A Glimmer of Hope Foundation (UK)

David Robins, Chairman, New Philanthropy Capital

Denise Holle, Social Investment Director, CAN

Dr Fred Mulder, Founder, The Funding Network

George Hepburn, Director, Community Foundation servingTyne &Wear and Northumberland

Giles Ruck, CEO, Scottish Community Foundation

Grant Gordon, Director General, Institute for Family Business

Guy Hands, CEO, Terra Firma

Dr Helen Bowcock, Trustee, The Hazelhurst Trust

Ian Sellars, Partner, Permira

Jim McAllister, CEO, The Rutland Group

Jim O’Neill, Global Chief Economist, Goldman Sachs

John Kingston, Director of Venturesome, Charities Aid Foundation

Katharine Barber, Director, Capital Community Foundation

Keith Punler, CEO, Kapital Assets

Keziah Cunningham, Development Director, Kent Community Foundation

Maggie Baxter, Trustee, Rosa UK

Marcelle Speller, Founder, localgiving.com

Mark Evans, Head of Family Business & Philanthropy, Coutts & Co.

Martin Smith, Former Deputy Chairman, New Star Asset Management

MatthewBowcock,Trustee,TheHazelhurstTrust andTrustee, Community FoundationNetwork

Mia Morris, Founder, Well Placed Consultancy

Michael Brophy, Vice-Chair, Capital Community Foundation

Michael Campbell, Chairman, The Ellis Campbell Group

Michael Head, Managing Director, Crown Imperial

Michael Hintze, CEO, CQS


Michael Oglesby, Chairman, Bruntwood Group

Musa Okwonga, Associate Director for Communications, Institute for Philanthropy

Nick Ferguson, Chairman, SVG Capital

Peter Hero, Senior Adviser, Silicon Valley Community Foundation

Rosemary MacDonald, Director, Community Foundation for Wiltshire & Swindon

Dr Sal La Spada, CEO, Institute for Philanthropy

Sarah Whiteley, Associate Director, Charity Department, SG Hambros Private Bank

Shaks Ghosh, CEO, The Private Equity Foundation

Sharath Jeevan, CEO, Global Giving UK

Sir Paul Nicholson, Former Chairman, Vaux Breweries

Sir Peter Lampl, Founder, Sutton Trust

Sophie Sharpe, Fund Development, The Mayor’s Fund for London

Stephen Hammersley, CEO, Community Foundation Network

Stephen Lloyd, Senior Partner, Bates, Wells & Braithwate

Susan Mackenzie, Director, Philanthropy UK

Tim Jones, CEO, CityLife Ltd

Vernon Ellis, Former International Chairman, Accenture

Whitni Thomas, Investment Manager, Triodos

Special thanks to David Carrington, Natalie Evans, Iain Griffiths and Philippa Ingram.

Supporters:

The Golden Bottle Trust

The Hazelhurst Trust

The Hintze Family Charitable Foundation

Permira

ShareGift

Terra Firma

The views expressed in this report are those of the authors, and not necessarily of the peo-ple we interviewed or of the people who offered us guidance and support.

6

ForewordBy Lord “Eddie” George

Baron George, of St Tudy in the County ofCornwall and Former Governor of TheBank of England

We are living in difficult times. The globalfinancial system has been under severestress as this report goes to print and hassuffered major setbacks. The City, thejewel in our own economic crown, is hav-ing to learn important lessons and theeconomy as a whole is facing the prospectof a period of recession. But Britain mustnot forget its other great traditions thathave endured over the years through eco-nomic ups and downs. We have a long his-tory of philanthropy that meets thisdescription and now is an important timeto build on that tradition to develop athriving modern philanthropy that meetsthe needs of the day and will endure intoan uncertain future.This report is about the role that people

can play in addressing the needs of oursociety when they have created financialwealth that they are prepared to investphilanthropically. It gives motivationalexamples of individuals acting as leaders inthe communities who are not only finan-cially generous, but are dedicating signifi-cant time and energy to bridging socialdivides and making their communities bet-ter places to live, work or simply be. It alsodetails community level giving vehiclesand other infrastructure available to themass-affluent who can find it difficult tonavigate through this particular jungle.Whilst some of those who have created

their own significant wealth in Britain inthe last fifteen years will not create thesame levels of wealth in the coming years,many of them will fare better than most ina downturn. All eyes will be on those whohave started some of the inspiring newphilanthropic initiatives that have emerged

and it will be the first real stamina test forour “new philanthropists” since theirmethod of long term support and longterm engagement started. I urge them tohold their ground as the effect of theirwithdrawal from the philanthropy marketmay be disproportionately negative giventhe potential wider impact on our cultureof giving.When calm has resumed, as the British

economy rebuilds itself, I hope there willbe an ongoing focus on responsible behav-iour, both socially and in business. I hopethat many of the wealth creators who ridethe economic storm can continue or startto act as philanthropic leaders, establishinga sustained culture of British philanthropywhich may raise less money during years ofeconomic hardship but which pervades ournational identity, strengthens our societyand raises significant sums in years of eco-nomic gain. This requires clear signalsfrom Government and collaborative rela-tionships at the grass roots level with exist-ing local services and representatives oflocal government.Such a development is in all of our

interests, since state funding, the keyengine of growth for the voluntary sectorin recent years will necessarily becomemore constrained given the more difficulteconomic condition and it is vital that weunlock private philanthropy to support avibrant civil society that provides for ourcommunities across Britain. We need amodern British philanthropy that takes thestrengths of the past and supports our pres-ent day communities of mobile and diversepopulations with modern techniques andtechnologies.


Executive summary

Very few people will be unaffected by theglobal financial crisis, so it may seem aninauspicious moment to be discussing howto expand philanthropy among thewealthy in Britain. The first of our tworeports on the subject, Give and Let Give –on building a culture of philanthropyamong high-earning City professionals –was published when bonuses were stillbooming in December 2007. Despite thescale of the crash since then, the factremains that wealthy people will fare muchbetter than most in the imminent reces-sion; what is more, their numbers havegrown prodigiously in the past 15 years.The total wealth of the 1,000 richest peo-ple increased from £99 billion in 1997 to£412.8 billion in April 2008.1 Below them,the so-called mass affluent have also grownrapidly and now constitute about 10% ofthe population.In America, where a culture of philan-

thropy is deeply rooted, charitable dona-tions hardly fall during the bad times – anaverage of 1% during all recessionary yearssince 1967.2 In the UK, we start from amuch lower base – only 18.6% of adultsgive in a regular, planned way to charity.3

But a new breed of philanthropist hasemerged from the ranks of the new rich,and they are offering their drive and busi-ness skills as well as their cheque books.It will be crucial for sustaining the devel-

opment of a philanthropic culture in thiscountry that this new group of philanthro-pists continue with their activity during thedifficult years ahead. If they withdraw theirlong term funding and engagement at thisfirst hurdle then the negative effect may befelt across the whole voluntary and socialenterprise sector, since they have set such animportant leadership example for a modernBritish philanthropy.In our first report we found both that

City professionals liked to act in concert

with others from the financial servicescommunity and that a significant numberwere not conducting their philanthropy ata community level. These observationsprompted this research, in which we setout to assess the role of communities inbuilding a culture of philanthropy inBritain and the role of philanthropy instrengthening communities and buildingwhat Robert Putnam has called “bridgingsocial capital”.We interviewed more than 30 high net

worth philanthropists who are involved atgrassroots level in order to discover whatmotivates them to give, how and wherethey do so, the rewards enjoyed and diffi-culties encountered. In sections 2 and 3 welet them speak at length in their own wordsas a series of case studies. From theseaccounts of their practical experiences wehave isolated the positive factors that pro-mote the creation of a sustainable cultureof community philanthropy and the barri-ers that still exist. In the final section, wefirst describe the ingredients necessary for aflourishing philanthropic culture and con-clude with a practical agenda for actionthat builds on the broader recommenda-tions of last year’s report.Our interviewees had deliberately cho-

sen to concentrate their philanthropy noton a big national or international charitybut on a community or project close totheir home or work. Some were also deeplyinvolved in a community of interest.Surprisingly, many had found it was notparticularly easy to give their money awayat this grassroots level. The main difficultythat they encountered at the outset was inidentifying the most pressing needs andthen finding the right local projects to giveto. Many local groups are doing excellentwork, perhaps turning round a difficultestate or cleaning up an environmentalblack spot, but may not even be registered

1 Beresford P, The Rich List, TheSunday Times, 25 April 2008

2 Giving During Recessions andEconomic Slowdowns, Center onPhilanthropy at IndianaUniversity, September 2008

3 UK Giving 2005/6, CharitiesAid Foundation, NCVO, 2006.Planned giving includes directdebits/standing orders,covenants, payroll giving andmembership fees

8

charities. Intermediaries played a vital rolein providing contacts and local knowledge;these included specialist advisers, peergroup giving circles of different types andabove all the Community Foundations,whose work we discuss in some detail.New web-based initiatives such as localgiv-ing.com and globalgiving.co.uk are alsobeing developed which will fulfil many ofthese functions.Community Foundations are invaluable

for researching the needs of local areas andintroducing donors to small charities orprojects operating below the radar andwhich they had carefully vetted.Community Foundations also offer donorsthe option of remaining anonymous if theywish, administrative support, the ability topool funds with others on a chosen projectand tax-efficient giving. Those people weinterviewed who had dealt with aCommunity Foundation praised theirwork without exception, but many had notand it turned out that they were largelyunaware of their existence.Once our interviewees had found the

right project to back, greater engagementoften followed, such as offering strategicadvice or taking a board seat – althoughsome felt that charities could make moreeffort to make the most of their skills. Thereward of involvement in an area wherethey lived or worked was that the philan-thropists could regularly observe theimpact of their giving and be reassured thattheir money was being used well. Theywere often surprised and delighted abouthow much difference a relatively smallamount of money could make – an impor-tant observation in this time of straitenedcircumstances.A number spoke about the delicate topic

of their relationship with beneficiaries, onewhich does not arise when giving to a largenational charity. They were aware that ithad to be dealt with sensitively and somepreferred to shelter behind the mask of anamed trust or complete anonymity. But

once they were deeply involved with acommunity, all said it would be very diffi-cult to walk away – their commitment toan area became long-term, the bridges theyhad built were solid.

This was one aspect of community build-ing; the other was the growth of communi-ties among donors themselves. Throughorganisations that are promoting venturephilanthropy and social investment as a newmethod for philanthropy, such as the PrivateEquity Foundation and Venturesome, orformal giving circles that introduce charitiesor issues to potential donors such as thePhilanthropy Workshop and the FundingNetwork, or just informal groups that havegrown from their local involvement, philan-thropists found support and advice that sus-tained them in their mission.Our practical agenda for action consid-

ers our interviewees’ comments on theirmotivations and their methods, both thebarriers and the positive factors, in order todevelop a sustained philanthropic culturein Britain anchored by community giving.We recommend that:

� inspired individuals, intermediariessuch as Community Foundations, pri-vate banks, financial advisers, compa-nies and charities themselves establisheasily accessible giving circles or vehi-cles that provide formal and informalnetworks – so that they become ascommon as book groups and invest-ment clubs

� entrepreneurs and established philan-thropists develop virtual matchmaking

Executive summary


“ If you engage with a cause, then you find yourself notjust creating new social networks but bridging social divides,which in turn strengthens the community you live in or workin. You are then embedded as part of the strength of thatcommunity and it is very, very difficult to walk away”Matthew Bowcock

and social networking sites using web2.0 effectively to build online commu-nities and enable good feedback fromcharities to donors

� intermediaries, from CommunityFoundations to private banks, pro-vide simple but flexible portfolios ofproducts suited to individual donorneeds

� the Government considers tax effectivemeasures that recognize the changingnature of philanthropy today. Thesemay include lifetime legacies, whichwould enable more people to makesignificant gifts during their lifetime;tax reliefs on volunteering and thelending of buildings to communityorganizations; tax incentives toencourage social investment, andensuring that opportunities for chari-table tax reclaim keep pace with thegrowing use of mobile phones and theinternet for making donations

� the media promote everyday rolemodels to develop a widespread cul-ture of philanthropy and cultivate apositive vocabulary for philanthropy

One other source of dissatisfaction was theparadoxical domination of the voluntarysector by central government funding.Private donors did not necessarily want topool their money in a government schemepursuing government-defined goals. Offthe record, some also mentioned that localcouncils may obstruct projects where theysee philanthropic input as a threat ratherthan an asset. Above all, there was confu-sion about what the role of private philan-thropy should be, where it fitted in. TheGovernment’s generous Grassroots Grantsprogramme should be a step in the rightdirection to start clarifying the respectiveroles of government, voluntary sector andprivate donors.Frank Field MP was right when he

recently described philanthropy as a “coun-terpoise”, or counterbalance, to govern-ments, “a crucial part of sustaining the free-dom which a thriving civil society bestowson its citizens”.4 A shift in attitudes isrequired to build our charitable culture intoa fully-fledged philanthropic one – one thatmust be led by high net worth individualsand embrace the mass affluent.

Building bridges

10

4 Field, F, “Acceptable behaviour

contracts for the super-rich”,

Allen Lane lecture, February

2008, www.allenlane.org.uk

/2008.htm


1Community andphilanthropy

Our aim in this section was to find outwhat community means to some ofBritain’s leading philanthropists and whatrole it plays in influencing their philan-thropic activity, not to enter into the oftenfraught debate about what constitutes com-munity. For the practical purposes of phi-lanthropy we distinguish between a com-munity of place based on geographical loca-tion, often neighbourhood, and a commu-nity of interest or purpose, based on activeinvolvement in a cause or an issue. We viewphilanthropy as covering a wide spectrumof activity including donations of money,time and skills, but with financial supportat its core. We use as elastic a definition aspossible in order to reflect the growth anddiversity of philanthropic contributionsand initiatives in Britain today.

1.1 Communities of placeOur interviews were focused on philan-thropists who we knew operated either in aspecific locality or within a defined com-munity at a grassroots level – overwhelm-ingly this was the place where they lived(some or all of the time) and/or worked.Those outside London tended to live andwork in the same area and did not separatethe two communities. Grant Gordon,director general of the Institute for FamilyBusiness, said: “For many of our members,the word community keeps on coming upwhen discussing philanthropy. That isbecause family businesses tend to beembedded in a specific part of the UK andeven if they do not do all their businessthere, they usually have a big footprint inthat place.”

5 UK Landscape of Wealth,

Barclays Wealth Insights white

paper, 2007

6 Ibid

7 www.mastercard.com/uk/wce

/PDF/23323_WorldMasterCard_

PressRelease_280907.pdf

8 www.businessweek.com/

magazine/content/04_10/b3873

084_mz020.htm

9 www.philanthropyuk.org/Reso

urces/USphilanthropy

10 Ibid

Definitions of wealth

High net worth (HNW), super-high net worth (SHNW) and ultra-high net worth (UHNW) areterms used in the private banking and wealth management industry to define the level of wealth ofclients. HNW individuals are those with over £500,000 of investable assets, SHNWs have in excessof £1.5 million and UHNWs more than £15 million.5 All three groups in the UK have grown fastover the past few years, and it was forecast (in 2007) that there would be over a million high networth households by 2017.6

The “mass affluent” are people who have liquid assets to invest but not at the level that would tra-ditionally place them in the realm of private wealth management clients. Definitions vary: BarclaysWealth defines mass affluent as having between £250,000 and £500,000 of aggregate wealth,7

MasterCard as having earnings of between £35,000 and £70,000 per annum,8 and Charles Schwab ashaving between $100,000 and $1 million to invest.9 A useful working definition is the one employedby Philanthropy UK, which defines the mass affluent as the wealthiest 10% of the population.10

In this report we use HNW broadly to mean the very wealthy (ultra, super and regular HNWs)and mass affluent as roughly those in the wealthiest 10% of the population who are not HNW.

Philanthropists who were living andworking in London tended to divide theirefforts between a focus on a place very closeeither to their home or work, and a focus onissues of interest that might also be London-wide issues. There was no discernible differ-ence between those choosing work or homeas their principal target. David Robins,chairman of New Philanthropy Capital andformerly of investment banks UBS andING Barings, said: “People who work in theCity think of their home as their communi-ty more often than their workplace and thatis because working patterns have changed –people used to stay with the same companyfor a long time and felt great affinity to thatcompany, but now they move around muchmore.” However, hedge fund managerMichael Hintze (42) suggested that “home”was no longer a simple concept becausemany of today’s high net worth individualshave more than one home and move aroundfrequently. Wandsworth, where he lived,had a less transient population than areassuch as Belgravia and Chelsea that con-tained many foreigners and people with sec-ond homes, and “which might make it hardfor them to connect with their community”.Commuting, owning multiple resi-

dences and working for global companieshave influenced the way people perceivecommunities of place today. MichaelCampbell, chairman of the Ellis CampbellGroup and of Hampshire CommunityFoundation, (36) said that an increasinglymobile population had had a profoundeffect in his area: “Communities in thebroader sense have broken down for differ-ent reasons. Most people commute, so theyare not working where they live and do nothave that same relationship with a place.Many of the old anchors are missing – nopub, no local shop, no local school, and thechurch is no longer providing the samesort of cement that it used to.”Some economic migrants retain a

responsibility to their community backhome. A 2002 survey on community giv-

ing in Silicon Valley found that 78% ofpeople who had lived in the region for fiveyears or less identified more strongly withthe place they grew up in than SiliconValley itself.11 “Diaspora” philanthropy hasbecome an important force though it isdifficult to put a figure on it.12 There anincreasing number of organizations aimingto encourage and assist diaspora philan-thropists: The Asian Foundation forPhilanthropy, for instance, is a UK-basedcharity that aims to help British Asianswho want to contribute to social and eco-nomic development in India by removingmany of the barriers to giving overseas. Itenables donors to find effective, credibleorganisations and advises them on tax.Philanthropists such as Cobra Beerfounder Lord Bilamoria and mining mag-nate Anil Agarwal are notable examples ofdiaspora givers in Britain.Although some individuals retain a

sense of responsibility to their place of ori-gin, others feel a responsibility to wherethey are now. One private equity profes-sional said: “I could have decided that mycommunity is my hometown…I still goback a lot but I live here, so I feel that mycommunity is where I am now.” Hisyoung family had helped him to put downroots. Another interviewee explained: “Itis easier to relate to a local community ifyou are part of a church or your childrenattend a school. For a single person withno children and no religious involvementit can be difficult to see where the ties withlocality are going to come from.”Entrepreneur and local philanthropistMatthew Bowcock (34) said: “Many peo-ple in Surrey do not come from Surrey –they may come from Liverpool or Bristolor Scotland – but I find they do stop andthink about their relationship with, say,Dorking, and whether or not it is just adormitory, if I say something to them like:‘You might not think that Dorking is yourhome town, but your children do – yourfamily do’.”

Building bridges

12

11 Giving Back The Silicon

Valley Way, Community

Foundation Silicon Valley, 2002

12 Johnson P, “Diaspora philan-

thropy: existing models, emerg-

ing applications”, Alliance maga-

zine, vol 10 no 4, December

2005


Community and philanthropy

Dr Helen Bowcock commented in aspeech to the Community Foundationserving Tyne and Wear early in 2008 thatshe saw today’s mobility as an opportunityfor philanthropy: “If people want to makeconnections, to be visible, perhaps even toseek status in what has become an increas-ingly mobile society, isn’t philanthropy away to do that?”13 Even among highlymobile professionals who may never be inany one place for more than a few years,there are those who recognise the valuethat attachment to a locality can have.During a career in finance spanning morethan 25 years, Nick Ferguson, chairman ofSVG Capital, (16) has lived all over theglobe, from New York to Singapore, butthe moment he found his “home” was stilla revelation. “Everybody needs a sense ofplace. I had always had a funny feeling thatI thought was adrenalin, ambition or wan-derlust but the moment I closed on buyinga small farm in Scotland it went away andit has never come back. That told me I hadgot my sense of place.” The bulk of his phi-lanthropy is now concentrated on Argyll.A number of interviewees expressed

uncertainty about the role of philanthropyin their local community because of theincreasingly domination of the State overthe voluntary sector. State contributions tovoluntary groups have risen by 36% in thepast five years and the jump between2004-05 and 2005-06 (the latest dataavailable) was particularly large – a totalincrease of £3.3 billion.14 This increase hasbeen accompanied by a significant shifttowards the Government contracting withcharities for the delivery of specific servic-es. In 2000-01, 55% of State funding wasin the form of grants that allowed charitiesto operate with a degree of autonomy, butby 2005-06, less than 40% of state fundingwas of this type with centrally directedcontracts now forming the core.15 Thisshift has led some to suggest that charitiesare being “muzzled by contract andneutered by subsidy”.16 Although some

philanthropists may be attracted to lever-aging State spending, for many such astrong government hold on the voluntarysector can be a disincentive as they do notwant their money and efforts simply bolt-ed on to government funding and used tomeet government goals.

It is not just the changing nature of statefunding to voluntary organisations thatdeters some private individuals from sup-porting the sector, but more generally theincreasing centralisation of local govern-ment – about 96% of its revenue comesfrom central government.17 This wasexplored in detail in Policy Exchange’s pub-lication The Decline and Fall of LocalDemocracy, which concluded that: “Localgovernment has its hands tied: it cannotrespond to local needs, it cannot raise itsown local income, it has little scope for tar-geting and working in partnership withefficient service providers in the private andnon-profit sector and local people have noone to call to account.”18 Philanthropistscould be added to this list; our intervieweesfelt unsure about where they fitted into thejigsaw of local government and other serv-ices at the community level.Stephen Hammersley, CEO of the

Community Foundation Network,observed recently in an interview with TheGuardian: “In this country, even when wetry to decentralise, all too often we stilldon’t quite manage to get down to thegrassroots.”19 The Government’s GrassrootsGrants programme (discussed in section 2)is designed to stimulate private philanthro-py for such projects, and may help to clari-fy the roles of the different sectors involved.

13 Bowcock H, speech to the

Community Foundation serving

Tyne & Wear and

Northumberland, 2008

14 UK Voluntary Sector Almanac

2006, NCVO

15 Ibid

16 Whelan R, Involuntary Action:

How Voluntary is the ‘Voluntary’

Sector?, IEA Health and Welfare

Unit, 1999 as reported in an arti-

cle by Frank Prochaska for the

Social Affairs Unit, March 2005

17 Wilson D and Game C, Local

Government in the UK, Palgrave

MacMillan, 2006

18 Travers T and Esposito L, The

Decline and Fall of Local

Democracy, A History of Local

Government Finance, Policy

Exchange, 2004

19 Brindle D, “Giving a Lead”

The Guardian, 2008, at

www.guardian.co.uk/society/200

8/apr/30/voluntarysector1

“ In this country, even when we try to decentralise, all toooften we still don’t quite manage to get down to thegrassroots”Stephen Hammersley

1.2 Communities of interestYoung, mobile people with high earningspotential may not be inspired by a partic-ular place until later in life when they havea family and feel it is time to put downroots. Nevertheless involving them in giv-ing early in their careers is vital for devel-oping a British culture of philanthropy.For this group, communities of interest,based on schools, universities and faith, orcauses, such as the environment or health,are likely to take precedence over localityat first.Technology – above all, the social net-

working capabilities of the web – and trav-el present new opportunities for commu-nities of interest to thrive. MatthewBowcock (34) summarised the potential:“I think people build their own philan-thropic communities, particularly whentheir community is a cause. With themodern social networking technologiespeople can build completely new commu-nities out of philanthropy, but they are aslikely to be virtual as geographic.” AdeleBlakebrough of CAN/Breakthrough (45)felt that non-geographic communitieswould be increasingly important for phi-lanthropy: “I think that community ofinterest is as important as community oflocality. A good example would be FathersDirect, a community made up of singledads all over the country. Or AmnestyInternational as a bigger one – it is irrele-vant whether their offices are inEnniskillen or in Bedford, people areattracted to it for the issues and form acommunity around them.”Michael Hintze (42) summarised how

communities of interest and place canoverlap: “Nowadays with killer telecom-munications and travel, the definition ofcommunity has changed and communitycircles can be created from diasporas.Things I support philanthropically becauseof community connections are my old uni-versity, the University of Sydney, thechurch, and where I live in Wandsworth.”

1.3 Social capitalThe more connections there are betweenmembers of a community, whether basedon place or interest, the stronger the com-munity itself becomes. The more connec-tions there are within the network as awhole, the more value, or social capital, allits members get from being a part of it.The concept of social capital is usuallyassociated with the political scientistRobert Putnam: “Whereas physical capitalrefers to physical objects and human capi-tal refers to the properties of individuals,social capital refers to connections amongindividuals – social networks and thenorms of reciprocity and trustworthinessthat arise from them.”20 Thus social capitalhas both internal and external features. Forthe individual, building a strong networkof social connections will usually benefittheir own interests. Putnam points out: “Awell-connected individual in a poorly con-nected society is not as productive as awell-connected individual in a well-con-nected society. And even a poorly-connect-ed individual may derive some of the spill-over benefits from living in a well-connect-ed community.”21

But we should not forget that commu-nity can be the basis for exclusion ratherthan inclusion. According to AnthonyCohen: “‘Community’ involves two relat-ed suggestions: that the members of agroup have something in common witheach other; and the thing held in commondistinguishes them in a significant wayfrom the members of other possiblegroups.”22 For some communities it is vitalthat they be outward-looking and inclu-sive, others may be deliberately inward-looking and this might be their mainattraction. Putnam distinguishes betweenthose with “bonding social capital” andthose with “bridging social capital”. Hewrites: “Some forms of social capital are, bychoice or necessity, inward looking and tendto reinforce exclusive identities and homo-geneous groups. Examples of bonding

Building bridges

14

20 Putnam R, Bowling Alone:

The Collapse and Revival of

American Community, Simon &

Schuster, 2000

21 Ibid

22 Cohen A, The Symbolic

Construction of Community,

Tavistock, 1985

social capital include ethnic fraternalorganisations, church-based women’s read-ing groups and fashionable country clubs.Other networks are outward looking andencompass people across diverse socialcleavages. Examples of bridging social cap-ital include the civil rights movement,many youth service groups, and ecumeni-cal religious organisations.”23

Communities sharing common leisure,political or academic interests are likely toinvolve people of similar backgrounds andto have a high stock of bonding social cap-ital. Communities defined by philanthrop-ic goals seem more likely to form linksbetween individuals from different walksof life and so increase their members’ stockof bridging social capital. MatthewBowcock (34) stressed its importance:“Often we live in our worlds in which weassociate with our own little strata and werarely look outside that. So it can be sur-prising to find there are pockets of depriva-tion and people living different lives rightalongside you and that is the most valuableplace to get integrated. It is getting toknow the local youth worker who runs thecommunity centre or the person who runsthe disabled association that matters. It issupporting them that brings aboutchange.”Philanthropy can both strengthen exist-

ing community organisations and buildnew ones by linking donors to the commu-nity they live in. Jim McAllister (24)agreed: “It is not all about money – it isabout involving yourself in the communi-ty. I have had many instances when peoplewant to get involved once they see I amcommitted and not just a fly-by-night.”Michael Campbell found that he becamemore involved in the community aroundhis home in Perthshire than he had in hisoriginal home Hampshire because in orderto get the initiative he became involved

with in Perthshire off the ground: “I had togo out and start talking to the relevantlocal people, meeting people from all walksof life.” However he also thought thatdonors should not have unrealistic expec-tations about the effect their philanthropywould have on their place in the commu-nity: “It can happen that the donor feelsmore a part of the community throughtheir philanthropy, but that is an addedadvantage – feeling that the wider commu-nity is more cemented and more cohesiveis enough.”The relationship between donor and

recipient can be uncomfortable, bringingto mind notions of largesse and hand-outs– “a slightly uncomfortable power relation-ship” as Matthew Bowcock called it. Hesuggested that three different constituen-cies were involved: “recipients of projectswho might have mixed feelings about itand perhaps even resentment that thedonor has so much and they do not; work-ers – often volunteers – many of whom areeasy to form a relationship with because ofthe common interest; and finally, the bigfish in the local pond – the local council-lors, community activists, the mayor andother people involved in local activity whoare often pleased to see people investing inthe community.”Engagement is most likely to develop

between donors and those in the second ofthese constituencies – the workers in com-munity organisations. Michael Head,chairman of Kent-based furniture manu-facturer Crown Products, said that throughhis involvement with local voluntaryorganisations: “I learnt how difficult it is toraise money, and I learnt how many smallorganisations there are around us that havecommitted people running them. They areoften good at what they do as their corebusiness, but struggle with fundraisingbecause it is not their expertise.”


Community and philanthropy

23 Putnam R, op cit

2Communitiesof place

2.1. MotivationOur previous report on philanthropy, Giveand Let Give, suggested that an individual’s

philanthropic “journey” followed a similartrajectory to their professional career – “anindividual is motivated to start on a jour-

16

Nick Ferguson,

Argyll and London

“Everybody needs a sense ofplace,” said Nick, “I had alwayshad a funny feeling that Ithought was adrenalin, ambi-tion or wanderlust but themoment I closed on buying asmall farm in Scotland it wentaway and it has never comeback. That told me I had gotmy sense of place.” Nick’s fami-ly had deep roots in Argyll, butit had taken spells in London,Germany, the U.S. andSingapore to make him realisethat this was really where hisheart lay, so when he decided toget more serious about philan-thropy it was obvious thatArgyll had to be a part of it.Although he had spent a lot

of time in the area, and knewthat “there were only two EECdeprived areas left in the UK,and that’s Argyll and WestCornwall,” Nick was still awarethat he needed help to find theorganisations doing the work onthe ground. A chance conversa-tion with a friend in Vermontwho had faced a similar prob-

lem when starting to give locallyoffered the solution. “I askedhim: will you hire somebody?And he said ‘No - I go to thelocal Community Foundationand give them a donation andthey give me some of their stafftime to do a mapping of theissues affecting the area.’”Realising that this approachcould also work for him, Nickcontacted the CommunityFoundation Network, who wereable to put him in touch withthe Scottish CommunityFoundation (SCF).Nick and his wife Jane estab-

lished a similar relationship withthe SCF as his friend had inVermont: he outsourced theresearch into the issues affectingArgyll and the organisationsworking there to the SCF, inreturn for a contribution totheir core operations. The map-ping exercise helped them todetermine how to act on theirmotivation: “We were driven byour passion for Argyll, and thenby the wish to help the peopleliving there improve their lives.Then we had to make a deci-

sion on where we could havethe greatest effect. We decidedto focus on young peoplebecause we felt that was wherewe could have most impact andbecause they are the future. Weset out a simple “mission state-ment” namely to help strength-en communities by investing ininitiatives which would improveaccess to learning, education,training and employment.”The focus on children and

young people manifests itself ina number of different ways.Nick believes: “We can help atdifferent stages of their lives,from parenting, advice, buildingself-confidence, education andtraining through to creating jobopportunities.” This has ledNick and his wife to getinvolved with organisationsranging from Home-Start,which provides mentors foryoung families – to the ArgyllConstruction Skills TrainingCentre in Lochgilphead whichprovides training and appren-ticeships in construction toyoung people in the area, whopreviously had to go all the way

Communities of place


to Glasgow if they wanted toqualify as builders.As well as straightforward

grant-making, Nick and hiswife have got involved withmicrofinance through theirpartnership with the S.J. NobleTrust. This is designed toencourage entrepreneurship inScotland. Nick explained: “Ifsomeone has a need for moneythat the bank will not supply, orthey cannot afford bank rates,we will give them either a grantor an interest-free loan.” Thisloan involves minimal paper-work, as “the loan document isbasically a sentence on a pieceof paper that says ‘I will repaythis if I can’”. Some people havequestioned whether this caneven be worth the card it iswritten on, but Nick said: “Itcertainly is in a community,because everyone will know ifthey cheat on you, and will notbuy whatever it is they are sell-ing.” By his reckoning, theirpartnership with the S.J. NobleTrust has created about 160jobs at minimal cost, andbecause some of the money wasgiven as loans it is now beingrepaid and can be used again,allowing the initiative to gofrom strength to strength.Nick believes that giving

locally has two major advan-tages for the results-orientedphilanthropist: “It is easier tohave a major effect, and you canalso see that effect for yourself.You know when you’re havingan impact.” The ability to goand see for themselves whattheir money is doing has notonly given Nick and his wife

confidence in their giving, buthas also given them a sense ofcommunity with those in theorganisations who share theirpurpose. “It is really interestingto go and meet and talk to thesepeople. And they can see you asa friendly partner – they doincreasingly ask us things like‘how do we solve this?’ or ‘doyou know someone who mighthelp on this?’”Although the impact may be

greater and easier to assess, localinvolvement often requiresmore work at the outset to findthe right projects. Nick pointedout: “We don’t need to do anawful lot of work to give £1,000to the British Museum. We doneed to do a lot of work whenhelping something like theHome-Start expand fromKintyre to Cowal – I want tomeet them and feel comfortableabout the leaders, and about theissues.” But Nick does not real-ly see this as a barrier because heunderstands the importance ofdue diligence from his profes-sional experience. He said: “Partof the reason we are doing ourphilanthropy very carefully isbecause it is like any other formof investment: if you do it in ahurry you will get it wrong. Wewere very honest with ourselvesabout how little we knew,which is why we worked withthe Scottish CommunityFoundation for a whole yearbefore we even started, just tounderstand what the landscapewas, and why we continue towork with them and with S.J.Noble Trust now. Both do afirst-class job.”

Although Nick is comfort-able with some aspects of thevisibility that comes withbeing a philanthropist – he is,after all, chairman of theInstitute for Philanthropy andchairman of the CourtauldInstitute of Art – he is morecircumspect about the workhe does in Argyll. In fact,when it came to establishingtheir own family charitabletrust, he and his wife decidedto call it the Kilfinan Trustrather than have their ownnames on it. “Some friendslocally know what we do, butblowing your own trumpet isnot what you do in that partof the world. If someoneasked me if the Kilfinan Trustwas mine I would not lie, butI would not offer the informa-tion first. But I could not careless if people know what wedo in West Kensington andwill happily talk about it.”Nick is beginning to over-

come this tension, by choosingvery carefully the way in whichhe is public: “What we aredoing more of, is telling friendswho say ‘we would like to dosomething in Argyll’. Theymight have come from thereand be part of the diaspora, orthey might have bought a houseup there years ago.” Nick andhis wife have begun to harnessthis enthusiasm by encouragingmatched funding from thosewho are interested. Nickexplained: “On one project I’vealready talked to two peopleand said, ‘look, I’ll do 20 percent, would you do 20 per centtoo?’”

ney and builds up to a crescendo depend-ing on career development, age and wealthcreation”.24 For many the first act of givingis the result of being asked to do so byanother member of their community,whether a work colleague, fellow church-goer or neighbour.Martin Smith, former deputy chairman of

New Star Asset Management, recalled: “I dis-covered I had some ability to persuade other

people to support things that I was support-ing myself, as long as I was leading from thefront. So I was not shy about saying to oth-ers, ‘I think this is really worthwhile and ifyou think it is worthwhile would you like tocome alongside me?’” He confirmed our ear-lier finding that a sense of social responsibili-ty was an important reason for starting thejourney: “I formed the view pretty early onthat with capital accumulation came the

18

Building bridges

Michael Oglesby,

Manchester

“I think that anyone whoworks and lives in a region hasa responsibility to ensure thatthe region prospers and worksproperly and the only way todo that is by getting involved,”explained Michael. And he hascertainly got involved – as wellas being Vice Lord Lieutenantof Greater Manchester andchairing the boards of a num-ber of public institutions suchas the Royal Northern Collegeof Music, Manchester CancerResearch Centre and MIDAS(the inward investment bodyfor Manchester) he is also anactive philanthropist in theNorth West. This philanthro-py is partly done personallyand partly through the com-pany philanthropy ofBruntwood Group, the prop-erty company he and his fami-ly own and run. He foundedthe company 30 years ago,and has grown it into one ofthe leading commercial prop-erty owners in the region,with over 65 buildings inManchester, Liverpool andLeeds. As he looks out overManchester from his office 24

floors up above the city’s cen-tral plaza he notes: “We ownroughly a quarter of all thecommercial office space in thecity, and that gives us a realand tangible relation with ourlocality. As we have expandedinto other cities in the region,we have formed the same sortsof bonds in those places.Doing what we do – owningand running property – meansthat you cannot really helphaving a strong sense of iden-tity with where you live andwork.”For Michael, philanthropy

was one obvious way of play-ing what he saw as his appro-priate role in Manchester: “Iowe this city a great debt. Iarrived here 40 years ago withmy family, and during ourtime here the place haschanged beyond recognition.As an entrepreneur, when I setout I never thought that Iwould get to the situation Ifind myself in now. It seemsonly right to put somethingback, because Manchesterplayed such a large part in mybeing able to get where I am.”The fact that Bruntwood is afamily company means that

this division between his per-sonal and the company phi-lanthropy is less clear than itmight otherwise be; the fami-ly’s values run right throughthe company. They give eitherthrough the family charitabletrust or directly from the com-pany, which on a practicallevel allows them to separatethe grants they make. Michaelexplains why this is important:“We do not want to complete-ly impose our interests on thecompany, and we recognisethat there are some things wewant to fund that are probablynot right for the company tofocus on.”Michael believes that keep-

ing Bruntwood’s giving sepa-rate from his family giving iscrucial because he sees philan-thropy as a key part of defin-ing the ethos of the company.“We want all our employeesand customers to understandthe values and commitment tocommunity that are at theheart of this company. Thesehave to belong to the compa-ny rather than just us as afamily, although our valueshave obviously helped shapethose of the company.”

24 John R, Davies R, Mitchell L,

Give and let give: building a cul-

ture of philanthropy in the finan-

cial services industry, Policy

Exchange, 2007

responsibility of capital redistribution.”Another interviewee said: “The country

house which I have is very nice, but it isnot mine, it just happens to be that I amthe current generation living in it. In 100

years’ time, or even 20 years’ time, it willbe somebody else living there, so just likewith the money, I have a responsibility touse it as a way of giving back to the com-munity it is located in.”



Bruntwood’s corporate philan-thropy involves all the compa-ny’s employees through thingssuch as matching individualdonations and offering twodays paid leave a year for vol-unteering. The power of phi-lanthropy to unite people isnot lost on Michael. As well asbringing together employees,he believes it can play animportant role within families,particularly those who ownbusinesses, because it can helpthem define and maintainshared values outside theframework of the company:“Not all family members areor want to be involved in run-ning the family business, sothere is a danger of a gapappearing between those whodo and those who do not.Philanthropy brings all the

members of the family togeth-er and can give them some-thing to share outside thebusiness.”For those who have found-

ed family businesses, sharingtheir philanthropy with theirheirs apparent can help guar-antee that any eventual succes-sion does not result in theheart of the company beinglost. Michael said: “When itcomes to passing on the busi-ness to the next generation,you want to make sure thatyou are not just passing on abusiness ethic but a muchwider legacy. Philanthropy isvery much part of that.”As Bruntwood’s operations

have expanded from its originsin Manchester to cover agreater swathe of the NorthWest, Michael’s philanthropy

has expanded alongside them.But this expansion will notcontinue to a national level. Heexplained: “Although we dogive to some national causes,that’s never going be the focusof what we do. We tend to givegrants in the £10,000 to£20,000 range – the sort ofamounts that probably wouldnot make a huge difference to abig national charity, but canhave a massive impact onsmaller, local organisations.What is more, not only canyou be confident that yourmoney is having a greatereffect, but you can really seethat effect as the outcome ofyour giving is on your doorstep.For a businessmen like mebeing able to see that your cashis making a visible difference isincredibly appealing.”

Alexander Hoare, London

Alexander is Managing Partnerof one of Britain’s oldest privatebanks, C Hoare and Co, and isclear about the motivations forfocusing his personal and com-pany philanthropy on the localarea in London: “I think a lot ofphilanthropic engagement isabout enlightened self-interest,so I am not ashamed or embar-rassed to say that the bank’scharitable trust has the localcommunity as one of its criteria

for giving. I think it has servedus well for 300 years and I amnot about to change that.”It is not just the long history

that enables him to see thevalue of giving to organisations“within half a mile” of FleetStreet, but more the dailyresponsibility of operating there:“Where you work is where youhave staff, you have customersand you have suppliers, so thereis a sort of nexus of operationsaround a given place, whether

you’ve been there for 300 yearsor three years.” He does admit,though, that the question ofpersonal affinity with a place ismore complex. “I live inBayswater and I don’t reallyknow anyone in Bayswater –but then I’ve only lived there fortwo years. Before that I lived inChelsea, where we have abranch, we have a large chunkof our customer base and quitea few of the family. So whenChelsea Hospital had a huge

20

Building bridges

appeal, I thought ‘we all loveChelsea Hospital – we enjoydriving past it every day, I playcricket facing there, so why notsupport that?’ And he concedesthat, “In Chelsea, our homeand our work are very closelyconnected.”Alexander’s sense of local

community is strengthened byhis Christian faith and hisinvolvement with his parish,although as he points out, thismay in fact be another factor inhis current lack of identificationwith Bayswater, as he stillattends his old church inChelsea. His churchgoing pro-vides him with a ready-madenotion of “local”, which thosewho do not attend any form offormal worship might struggleto find in a city as vast anddiverse as London. But hethinks the challenge is “to findthe level at which people feelthat the benefit is going to thecommunity that they want it toget to.” He believes this couldaddress a basic human desire:“Community is a kind ofhuman driver or need. I thinkmost people would rather be ina community than not.”There are further reasons for

local philanthropy being appeal-ing, as Alexander explained: “Ihave more confidence aboutwhere our money is going witha local initiative and we getmore visible feedback. It cer-tainly is not that we do not giveat all to big charities, but we aremore minded to give to thingswhere we are really making adifference and we are confidentthe money is being spent well.”

Alexander also feels a sense thatit is easier to have an impactwith smaller sums at a locallevel and finds that appealing:“I do not have unlimited sums.I am not the Prime Minister – Ihave small sums and I targetthem to people doing goodwork locally.”Alexander’s interest in oper-

ating at a grassroots level stemsfrom his approach to business,where he says: “I do believe insmall initiatives, businesseswhich are close to their cus-tomers, close to their staff,close to where they live.” Thisled to a similar approach in hisphilanthropy, where he “foundthat microfinance is a way ofhaving small sums workingreally well across much of thethird world.” The success of hisexperiments with microfinanceraised a question: “Building onthat I thought: how can youhave similar success in modernindustrial Britain? And Ilatched upon social entrepre-neurship as an answer.” Henow supports a number ofsocial enterprises in London,particularly through hisinvolvement with the charityTraining for Life, which runsinitiatives such as the HoxtonApprentice and theWestminster Centre forIndependent Living.Even a committed local phi-

lanthropist such as Alexander,who has deep roots and knowsthe area well, admits that it canbe difficult to give effectively ata community level. “There are alot of charities – small charities– out there with fantastic poten-

tial, but the trick is to findthem.” His solution is to enlistthe help of Capital CommunityFoundation, one of the LondonCommunity Foundations.“What they do makes a lot ofsense – they aggregate a certainamount of expertise in how toget stuck into the London com-munity. That saves us an awfullot of work, as well as lesseningthe risks of failure or missedopportunity.”He believes that the strength

of Community Foundations liesin their local expertise and ishappy to make grants to CapitalCommunity Foundation’s cen-tral endowment so that it canuse this expertise to distributethe money to communityorganisations. He worries thatthe increasing focus on creatingtailored funds for donors couldbe detrimental for CommunityFoundations because “theymight all spend too much timeworrying about how theirinvestments are managed andnot enough time on their corebusiness.” Banks, such asHoare’s, could potentially play akey role in overcoming the ten-sion: “One way forward mightbe for Hoare’s bank to have adonor-advised fund and for ourseveral hundred customers to beable to say “do this thing, dothat thing, do it this way” andso on. Then the CommunityFoundation could get on withtheir core business of applyingtheir local knowledge to makegrants to deserving organisa-tions, and we could manage thefunds – which, after all, is ourcore business.”



Michael Oglesby (18), chairman of theBruntwood Group inManchester explained:“As an entrepreneur, when I set out I neverthought that I would get to the situation Ifindmyself in now. It seems only right to putsomething back, because Manchester playedsuch a large part in my being able to getwhere I am.” Although Nick Ferguson (16)of private equity group SVG Capital, felt his

“sense of place” in the highlands of Scotland,he also dedicated significant effort to his phi-lanthropy in London because he spendsmuch of his time there: “Wherever you areyou should be involved. If you are givingphilanthropically, then part of it should be inyour local community, so I am involved inthings in London as well as Scotland.”Matthew Bowcock (34) in Surrey sum-

Michael Head, Kent

Michael runs a businessfounded by his father afterWorld War II. It originallymade wooden toys, whichwere in short supply at thattime, but over the yearsCrown Products has become aleading kitchen and bedroomfurniture manufacturer. Thebusiness started in Londonbut moved to Kent in the1960s.Years spent living and

building a successful familybusiness in Kent and beingone of the largest employers oflocal people there have rootedMichael in the area and hefeels he has “a commitment tothe district”. When it comesto his philanthropy, he saysthat he considers his commu-nity to be, “CanterburyDistrict because I work andlive in it.” He feels a deepsense of responsibility and astrong pride in the area and hewants to have a hand in pro-viding better opportunities tothe people of Kent. Heexplained his philanthropy asfollows: “Wherever possiblewe focus our support onthings that are close or con-nected to the business. If we

are helping the local school,for instance, there is a reason-able chance that we are help-ing the children of someonewho works for us.”The focus on young people

is a running theme. Like manyphilanthropists, Michaelrelates this interest back to hisown upbringing: “When I was13 I belonged to youth clubsand tennis clubs that someonesomewhere had set up for kidslike me to benefit from. I sim-ply want to support peopledoing that kind of thing andmany other things that benefityoung people today.”It was an impressive inter-

view by two teenagers fromthe local secondary school fora project they were doing thatreally got him started on hisphilanthropic journey. It was aschool with a poor reputationbut the girls so impressed himthat he called and asked if hecould make a donation to theschool. Four years of workinteracting with that school,together with being involvedwith Canterbury City Counciland an organisation whichbecame Canterbury 4Business, and leading a£700,000 fund-raising drive

for his village hall left him acommitted philanthropist.With Kent Community

Foundation he set up theCrown Charitable Fund witha half-million pound endow-ment to ensure there is a cer-tain amount to give, in perpe-tuity, to local organisations.Subsequently he has estab-lished two more funds withKent Community Foundation– one for the New MarloweTheatre and one for the SpiresAcademy, formerly theMontgomery School inCanterbury, an opportunitythat emerged from his involve-ment with Canterbury 4Business.Like many philanthropists

who give through CommunityFoundations, help in findingthe right local projects is key.He explained: “It is muchharder to give away money ata local level. You can givemoney to big internationaltype charities or even Save theChildren or the RSPCA, butto give money locally and feelthat your money is used wiselycan be difficult.”He is a strong advocate of

local giving, not just becauseof his sense of responsibility to

marised this sentiment: “Will I live in Surreyuntil I die? Possibly not, but it does not mat-ter – right now it is where I live and I havean obligation to it.”Guy Hands (40) of private equity compa-

ny Terra Firma felt the responsibility for hiswhole firm: “As people working here, we are

transitional, we come in and we go out, butwithin the Southwark community there arepeople who live here all the time and theireconomic position is very different to ours,their age group is quite often different – veryyoung and very old – and at Terra Firma wefeel that we should support the current needs

22

Building bridges

give back to the area in whichhe has had business success,but also because of the posi-tive experience being closelyinvolved with the projects cangive. He said: “I want to goand look. I don’t want to lis-ten to someone talking to mefor half an hour, I can tell inten seconds for myself. Forinstance, when I walk intoschool assembly at the SpiresAcademy, I can see the differ-ence immediately.”He takes his role as a phi-

lanthropist very seriously andhe wants his money to bringabout positive change. Of theSpires Academy he said: “It isscary as hell. We pretty muchown this school which has 350pupils and I find that a hugeresponsibility.” Although hetries to remain “invisible” (hewas clear that he would onlyparticipate in this research if itencouraged more philanthro-pists to act) and he does not“do thank yous”, he realisesthat his role in these projectsis somewhat public and hedoes not want them to fail –although he gives the impres-sion that is more becauseMichael Head does not abidefailure than because he is wor-ried about his reputation. Heused the Crown name for thefund with Kent Community

Foundation so that any of thefamily can participate in itshould they wish to do so infuture but he admits that ithas raised the company’s visi-bility in the area, particularlygiven that its business profileis fairly low.He is very hands on about

his major projects – by hisown admission, he is a “lousychairman, better as a direc-tor”: “I have learnt so muchthrough my involvement. Ihave learnt how difficult it isto raise money, and I havelearnt how many small organi-sations there are around usthat have very committed peo-ple running them. They areoften very good at what theydo as their core activity, butstruggle with fundraisingbecause it is not their expert-ise.”He also explains that he has

learnt just how far his moneycan go, not just for the majorSpires Academy type projects,but the smaller ones fundedthrough the Crown CharitableFund too: “It is hard for mostpeople to imagine just howmuch difference five hundredor a thousand pounds canmake in a given situation.”But he recognises that giv-

ing lots of small amountseffectively to a large number

of small organisations requiresa lot of administration andcareful project vetting – tohim that is the beauty of KentCommunity Foundation. Hesays he found the concept of aCommunity Foundation quitestrange to start with, he wasnot sure he wanted a thirdparty to administer his family’scharitable giving, but he couldnot be more effusive in hispraise now: “It can be a diffi-cult concept to sell to people,but once you get involved in ityou realise it is genuinely fan-tastic. How often have youthought ‘I’d like to fund X YZ be it £5,000 or £500 mil-lion’ but you just don’t knowhow to get started? And if likeme, the thought of lots ofadministration, bureaucracyand other obstacles put youoff, then the simplicity andease of working with aCommunity Foundation is arefreshing solution – it turnedmy idea into a workable reali-ty. Normally in life things thatappear to be too good are toogood, but this one is not likethat; it really does work. Foranyone interested in gettinginvolved with, or giving to,their local community, I urgethem to get in touch withtheir local CommunityFoundation.”

of the community that houses us.” Sir PaulNicholson, chairman of County DurhamCommunity Foundation, and former chair-man of the Vaux Group, shared this view: “Ifa company is operating in a tangible commu-nity, particularly something like a brewingcompany, it relies on its local people and itmust be seen to be a responsible citizen inthat community. Employees must be proudof working for the company and customersmust feel happy about buying the product.”David Robins, formerly of investment banksING Barings and UBS in London alsoagreed: “You cannot exist as a company, youcannot exist as an individual and turn a blindeye to what is going on in the community ofwhich you are a part.”This view was echoed by owners of fam-

ily businesses. Grant Gordon pointed outthat the line between the individual and thecompany is more blurred for family busi-nesses, so it perhaps easier for them tounderstand their role in the local commu-nity: “I do not think family businesses havea magic formula. If you take it back tobasics, they tend to be not just about wealthcreation and successful enterprise but areunderpinned by a family who bring to thebusiness a certain set of values. In those val-ues there is usually an element of realisationthat the family has done well by where theyare and the people who have helped themalong the way, so it is fitting to put some-thing back into that community.”Jim McAllister (24) of Rutland Group isentirely motivated by his ability to improvethe communities he becomes a part ofthrough his work in property development:“I do not see how you can possibly work ina community without getting to know it.The first thing I do when I am involvedwith a community is find out what theproblems in that community are and thentry and resolve them.” Some philanthropistsfound their motivation was tied to love of aspecific place. Londoner David Gold, for-mer investment banker and now CEO ofthe voluntary sector recruitment agency

ProspectUs, said: “I was brought up inLondon and I love London. I am passionateabout it and I hate the fact that not every-one gets the same opportunities”. NickFerguson (16) felt a “give where you liveresponsibility”, but was also driven by “pas-sion for Argyll, and then by the wish to helpthe people living there improve their lives”.This theme was echoed by Scottish entre-preneur Angus MacDonald: “The WestCoast and the Highlands of Scotland is thearea I have a real interest in and there is nomoney there, no indigenous money andthere has been a brain drain for 200 years, soit really needs a hand.”The idea of a social contract between

individuals and society forms a core part ofthe teachings of many religions on the virtu-ous life. Former Prime minister Tony Blairechoed this when explaining his motivationfor establishing a Faith Foundation in anarticle for Philanthropy UK: “So muchphilanthropic effort has a religious motive.Helping others is a central tenet for everymajor religion, and countless voluntarygroups are rooted in their members’ faith.”25

Some religions even go beyond a generalendorsement of giving and have a traditionof tithing; stipulating that one must giveaway 10 per cent of all earnings. LordGriffiths of Fforestfach, vice-chairman ofGoldman Sachs International, reminiscedthat during his upbringing in post-warWales, “there was an expectation that peoplegive a tenth of their income; the only ques-tion was should the tenth be before tax orafter tax?”26 In a recent interview withPhilanthropy UK, Sir Trevor Chinn CVOexplained: “Giving to charity is deeplyembedded in Jewish life and teaching. TheHebrew word for charity, Tzedakah, meansrighteousness, for charity is a duty. InEastern Europe, Jews had charitable organi-sations for all aspects of communal life – thepoor, the sick, the handicapped, forrefugees. Everyone was supposed to give tocharity; even a pauper was obligated to con-tribute a nominal sum…. So charity is not a

25 Blair T, “My Philanthropic

Journey: Giving Back with pas-

sion and Commitment”, in

Philanthropy UK Newsletter,

Issue 33, June 2008

26 Lord Griffiths was interviewed

for our last report, Give and let

give, published in December

2007. This quote is part of the

profile in that report.



27 Philanthropy UK Newsletter,

September 2008,

http://www.philanthropyuk.org/N

ewsletter/Sep2008Issue34/

Makingacapitalcontribution

choice.”27 The challenge presented by tryingto promote role models to build a philan-thropic culture in the UK is that for somephilanthropists driven by faith, the compul-sion to give comes with the caveat that one’sgiving must not be spoken about.Alexander Hoare explained that his faith

is an important element of his philanthrop-ic motivation: “I am a Christian and I getsome of my kicks out of running a bank, butI remember I’ve got a ‘higher authority’ upthere and I see the bank as an opportunityfor me to try and do His will through phi-lanthropy.” He conducts most of his philan-thropy around the Hoare’s Bank headquar-ters in central London and is driven by adesire to build the bank into its communitybut also to ensure that the locale is a safe and

desirable place to be. “It is about enlight-ened self interest. I am not embarrassed tosay that one of the bank’s charitable trust’scriteria is local community. Personally Idon’t want to get knifed, so if something wedo can contribute towards tackling knifecrime, then so much the better.”Michael Head told us that as a family

business deeply rooted in their area, CrownImperial was well aware that the benefits oftheir giving in the community may comeback to them in many different forms: “Wehave worked here as a business for 40-oddyears and have a commitment as to the dis-trict. Wherever possible we focus our sup-port on things that are close or connectedto the business. If we are helping the localschool, for instance, there is a reasonable

24

Building bridges

Jim McAllister, Surrey

and elsewhere

“I define community as beinganyone or any place that isaffected by anything that I amdoing,” said Jim McAllister,chief executive of propertydevelopment firm the RutlandGroup. Rutland has develop-ment projects all over the UK,and Jim has a clear view of hisresponsibilities: “Wherever wehave projects, I get involved inthe community. It would beeasy just to come in and makemoney but I don’t see howyou can work in a communitywithout getting to know it.Anyone who does that is wast-ing their time and it is the sortof thing that gives developersa bad name. I am an environ-mentalist though, so I amalways trying to leave some-thing behind me that is animprovement to an area ratherthan just an effect.”

The extra responsibilityand visibility developers havein a local community alsobrings the power to effectchange in many differentways. Jim said: “I realised earlyon that developers, particular-ly property developers, havean enormous opportunity toachieve good if they interactproperly with the communityand an enormous ability to beable to affect an area wherethey are working.” He alsopoints out that the range ofways to act philanthropicallymay be broader for a develop-er: “Philanthropy does not justneed to be about givingmoney; it can take many dif-ferent forms. Being a develop-er gives me the ability to beable to put things into a com-munity that would normallybe beyond the reach of evenwealthy individuals, because Ican use the system to improve

the community, which is diffi-cult in other ways.”Simply having land and

property in an area opens thedoor immediately for helpingthe local community, as Jimexplained: “We set up a schemeteaching young people to bemechanics. We reasoned: ifthey are going to steal cars, let’sget them away from that andteach them how to build carsand repair them instead. Wecould do that because of ourlarge land holdings.” The com-munity can also benefit directlyfrom a developer’s core activi-ties. Jim recounted how, as partof a development project nearHeathrow, he had tried tomake sure the community wasinvolved: “As we were buildingheadquarters for IBM, Cisco,SAP – all these big companies– we actually took all the localparent-teacher associationsround those buildings so we



could show them how a build-ing comes from the ground up.They ended up seeing it beforeanybody else did in its finishedstate. And we could say tothem, ‘If your children stay inschool and you encouragethem to do so, they can workin buildings like this. There isnot a wall between this busi-ness community and yourcommunity over there; yourchildren can work here.’ Thatis philanthropy but in a differ-ent way, if you see what Imean, it is not money, butit is contributing to thecommunity.”In the Hounslow project,

as with any sympathetic devel-opment, there were also overtbenefits to the communityfrom improvements to thelocal environment. Jim is care-ful to point out the impor-tance of giving the local resi-dents a sense of ownership:“As part of what we did, webuilt the largest public park inLondon in the 20th centuryand we gave it to that com-munity. Before it ever formallyopened to the public, we tookall those local residents into itand we walked them roundand said, ‘This is yours now.’”“It is not all about money –

it is about involving yourself inthe community. And thatmight mean money, but it ismost important to haveengagement.” Jim’s workinvolves many different areasand he considers himself a partof all those communities, withresponsibilities to each one. Heexplained: “I do not see how

you can possibly work in acommunity without getting toknow it. The first thing I do isfind out what the problems inthat community are and thentry and resolve them…I havehad many instances when peo-ple in the community want toget involved once they see I amcommitted and not just a fly-by-night.”Acting philanthropically in

the local community alsoappeals to Jim’s desire to haveimpact. He pointed out: “Iwant to affect the communitiesthat I am working in. I cannotdo that by giving nationallybecause it would never perco-late down. So I tend to focus ata local level because I feel thatis how I can best help.” He canalso more easily assess whatthat impact is: “At a communi-ty level you can actually see theeffect of your giving. Whenyou get a card from a group ofkids you have helped that theyhave all signed, you think, ‘thatis having an effect’. I wouldrather do that than go to awider stage, because I want tosee the results of what I amdoing.”There can be difficulties: “I

have had to refuse to give tosome things simply because Ifelt it would be misunder-stood. I have had to say, ‘Icannot do this because I donot want to seem like I amtrying to gain favour in thiscommunity.’” He believes thatbeing engaged helps to over-come misconceptions peoplemight have, but has alsofound that the vehicle he uses

for his giving has made it easi-er too. He explained: “Wehave set up a fund at our localCommunity Foundation andone of the great advantages isthat it makes it easier to focuson the things we are interestedin. We get hundreds of grantrequests, and what I can nowdo is direct people to theCommunity Foundation, asall our giving goes throughthat. So we are not saying noto them, we are saying, ‘Sendit to the CommunityFoundation, they will analyseit and if they feel that it fitswithin our criteria then youwill receive a donation.’ Thebeauty of it is that if it doesnot fit our criteria, it might fitsomeone else’s, so theCommunity Foundation canpoint them to a differentdonor.” His involvement withSurrey CommunityFoundation has led to himtaking a position on its boardand he is now keen to fly theflag for CommunityFoundations and local giving.“You must not show off or beboastful about giving. It mustbe done in a sedate way. Butat the same time it is impor-tant to get the message acrossto others who might give in acommunity. Some of us whoare donors at the CommunityFoundation have been meet-ing local people who we knoware wealthy and who are notyet tuned into the community.Because if we can show themwhat their peers are doingwithin the community, itmight make them think.”

chance that we are helping the children ofsomeone who works for us.”Guy Hands had a word of caution for

philanthropists driven by a desire toimprove their local community (40). Heexplained that the more a philanthropist isintent on bringing about social change, thegreater the risk that the actions will createtensions: “Once you move from reactivecharitable giving to having an effect onhow the community acts, rather than justhelping at the edges, there is going to besome debate about whether that is good orbad. It is not a completely clear thing.”

2.2 MethodsMost of our interviewees who were givingin their locality did so either through theirown foundation or were benefiting fromthe expertise of a local CommunityFoundation (CF). The very highest networth individuals with their own familyoffices or family business usually have theinfrastructure and administrative resourcesthey need. They are sufficiently wellknown in their community that they donot need to go out and search for localcauses or projects to support because theyare already targeted by fundraisers. Forthose individuals for whom it does notmake sense to start their own foundation,either because they do not have the appro-priate level of wealth, or they do not wishto set up the infrastructure required to runit, or because they simply do not knowhow to go about it, CommunityFoundations are one solution. They canprovide administration and have expertlocal knowledge.Even though he already had his own pri-

vate foundation, Nick Ferguson (16)decided to enlist the expertise of theScottish Community Foundation (SCF) tohone his philanthropy in the Highlands.He makes a donation to SCF’s centralendowment each year, and in return it pro-vides a number of hours of research and

evaluation by a member of staff. Heexplained: “Philanthropy is like any otherform of investment, if you do it in a hurryyou will get it wrong. We were very honestwith ourselves about how little we knew,which is why we worked with the ScottishCommunity Foundation for a whole yearbefore we even started, just to understandwhat the landscape was, and why we con-tinue to work with them and with the S.J.Noble Trust now. Both do a first-class job.”

2.2.1 Community FoundationsCommunity Foundations (CFs) are chari-table trusts whose main aim is to supportprojects that engage local people in makingtheir communities better places to live.They build endowments and make grantsto local organisations, as well as managingfunds on behalf of individual and corpo-rate donors. The first CF was set up inCleveland, Ohio in 1914. There are nowover 830 in the US, of which 717 aregrant-making. By 2006, these had com-bined assets of just under $50 billion andmade grants of around $3.6 billion in thepreceding year.28 They are among the mostgenerous of American foundations,accounting for only 1% of all grant-mak-ing foundations in the country but about9% of total giving.29 The CommunityFoundation model first arrived in the UKin the 1980s. The Charities AidFoundation (CAF) used funding from gov-ernment and the Charles Stewart MottFoundation to cover the administrationand start-up costs of six CFs. By March2007 there were 57, holding over £160million in endowments and managing afurther £40 million in associated trusts. In2006-07 they made grants of over £75 mil-lion.30

The early CFs focused on attractingdonations from members of the communi-ty in order to build an endowment thatcould be used to make grants to local char-ities. Endowment funds remain thebedrock funding, although the donor-

28 The Foundation Center, Key

Facts on Community

Foundations, April 2008

29 Ibid

30 Ibid

26

Building bridges

advised fund is an increasingly importantvehicle.31

The Community Foundation Network(CFN) is their umbrella body in the UK.Stephen Hammersley, CFN’s chief execu-tive, explained that its work includesstarting CFs, supporting their growthand creating opportunities for them todevelop and raise new funds for philan-thropy. “We are a charity where ourboard is comprised of our members so weare owned by the CommunityFoundations in that sense.” Sir PaulNicholson, a trustee of the CountyDurham foundation, described CFN’srole as “cross-fertilisation and ideaexchange between foundations”.Some of the early CFs are now signifi-

cant sources of local funding and commu-nity leadership. For instance, in the year toMarch 2007, the CF serving Tyne & Wearand Northumberland managed £43 mil-lion on behalf of more than 140 donorfunds and awarded £7.8 million in grantsto almost 1,700 local voluntary organisa-tions.32 The typical organisation funded bya CF is not a big-name charity, saidStephen. “It is usually a volunteer-ledorganisation with three or four staff…theymake a good contribution to the localestate by making it a better place to live, orby giving young people something to do,or by helping people coming out of prisonto settle back into the community, thatkind of thing.”In association with Coutts private bank,

CFN has launched the Grassroots PersonalFund, designed to allow individual donorskeen to support local and grassroots organ-isations to take advantage of the moneyavailable from the Government’sGrassroots Grants. The latter is a £130million programme of investment fundedby the Office of the Third Sector anddelivered by the Community Develo-pment Foundation (CDF). The pro-gramme is scheduled to run from 2008-2011 and is divided into two parts: an £80

million small grants fund for communityorganisations; and a £50 million endow-ments programme to enable local fundersto generate additional donations on amatched-giving basis and invest them inendowments. The Coutts fund is astraightforward product offered to thebank’s clients, allowing them to givemoney towards the endowment of any CFthat is eligible for matched fundingthrough the Grassroots Grants.The benefit for the donor is that for an

effective cost of around £75,000 they cangive £256,420 in endowment funding.33

This provides a real incentive, for thosewho are keen to make their philanthropicgifts work as hard as their for-profit invest-ments. The benefit of generating endow-ment funds for CFs, and for local volun-tary organisations in general, is that thecapital is protected, thus providing a sus-tainable source of non-governmentalmoney for the community sector. And bydonating in this way, philanthropists inter-ested in community-level giving can drawon the extensive local knowledge andexpertise of the network. StephenHammersley called it “a remarkable initia-tive with the potential to transform localcharitable giving”.

Benefits for donorsInterviewees who had used CommunityFoundations were unanimously positiveabout their experience, and thought thatCFs could help to overcome barriers tolocal giving. The principal attractions theycited of giving through CFs, were theaccess to local expertise and projects, thechoice to be anonymous or not, the abili-ty to pool funds with others on a chosenproject and the possibility of making taxefficient donations to organisations thatare not registered charities because theCommunity Foundation, which distrib-utes the grants, is itself a registered chari-ty. Given that 50 per cent of communityphilanthropy is distributed to non-regis-

31 A donor-advised fund is a

ring-fenced vehicle for charitable

giving established by a public

charity or other host. Donors put

cash or assets into the vehicle

and then recommend recipients

and the size of grants.

32 www.communityfound

ation.org.uk/aboutus

33 An initial donation of

£100,000 is brought up to

£128,210 by Gift Aid. Then,

100% of matching money takes

it up to £256, 420. If the donor is

a higher-rate taxpayer, he can

reclaim the difference between

higher rate and basic rate tax

paid on his donation ((40%-

20%) of £128,210= £25,642.

Then £100,000- £25,642=

£74,358)



34 This is an estimate from the

Community Foundation Network

based on surveys and feedback

from members, but CFN

believes the actual percentage

may be higher than this

28

Building bridges

tered charities, this is an important bene-fit.34

Local expertiseOne of the main barriers to giving at alocal or community level, according toalmost all our interviewees, is simply thatof finding worthwhile grassroots organi-sations and projects to fund. MichaelHead (21) thought: “It is much harder togive away money at a local level. You cangive money to big international-typecharities or even Save the Children or theRSPCA, but to give money locally andfeel that your money is used wisely can bedifficult.” Community Foundations cangive donors confidence in making dona-tions to small organisations, by acting inan accreditation role. Many of theseorganisations will not be registered chari-ties, so it can be difficult for a donor tojudge their legitimacy. Michael Campbell(36) said: “If you are talking to a volun-tary group doing innovative things in asmall village somewhere, you have no ideawhether they are valid or not, regardlessof how good they may seem on the sur-face. So at this level you really do need anintermediary to make sure that yourmoney is going to be spent wisely.”George Hepburn believed this was animportant role for CFs: “It is akin to mak-ing small cap investments. You need moreadvice on picking projects that you do notknow – you need somebody to vouch forthem.” They could also “play a brokeringrole in putting wealthy donors in touchwith good local projects”.

Matthew Bowcock (34), a CommunityFoundation Network (CFN) trustee,thought this could be a huge draw for busy

donors: “There is a large mass of peoplewho want to do interesting projects but donot have the time to go out and find them.The Community Foundation’s value isbrokering the community groups with thecapacity to fund them.” Explaining whyHoare’s bank had decided to use theLondon CF, Capital CommunityFoundation, for some of its giving,Alexander Hoare (19) explained: “Thereare a lot of small charities out there withfantastic potential but the trick is to findthem. Capital has a systematic way offinding them, and that saves us a lot ofwork and reduces the risk of missedopportunity because we can rely on theirexpertise.” Sir Paul Nicholson also saw thevalue of CFs for his company’s philan-thropy, calling them “a convenient vehiclefor a big organisation to get into the local-ity”. Katharine Barber, director ofCapital, said: “Many people in London orelsewhere set up sizeable private charita-ble trusts, but are not necessarily gettingthe satisfaction out of that experience thatwe could offer them. Often they say ‘Ihave struggled to find the local organisa-tions I wanted to reach,’ and that is wherewe can really help.”A donor can use the local expertise of a

CF in different ways. Some are happysimply to give their money to the CF andlet it decide where best to use it.Entrepreneur Angus MacDonald, forinstance, has set up a named fund at theScottish Community Foundation.Having specified the funding criteria hewas happy to let it get on with things. Heexplained: “I think giving money away isa very special skill and not something Ireally have any knowledge of.” MichaelCampbell (36) has enjoyed being moreinvolved, but still thought the expertise ofthe CF was vital: “It can provide a donorwith the ability to be more focused, so hecan say, ‘These are my interests’ and theCommunity Foundation can say, ‘I’ve gota fantastic case here in Hythe’ or ‘I’ve got

“ There are a lot of small charities out there withfantastic potential but the trick is to find them”Alexander Hoare



a very deserving cause in Portsmouth andyou can go look at them. If you do notlike either of those I can point you inanother direction.’ There is no way thatthat donor, who is probably very busy,could investigate for himself where thoseopportunities are. The CommunityFoundation gives him the ability to learnso much more.”

Managing visibilityPhilanthropists in Britain are oftenuncomfortable with being known as adonor. Apart from the cultural barrierpresented by the fact that the British donot like to talk about money and themedia’s tendency to include philanthro-pists in the celebrity category, there is apractical concern for donors: if theybecome known as givers, they are likely tobe inundated with funding requests. Thismay be particularly acute when givingwithin a community of which they are amember, so any tension arising from theimbalance in wealth is felt more keenly. ACF can set up named funds, which allowdonors to control the level of visibilitythey have. Matthew Bowcock (34)explained: “One of the reasons I like theCommunity Foundation is because it hasallowed us to set up a named fund, in ourcase the Hazelhurst Fund. It does nothave our name on it; it is the name of ourhouse. A number of people do know it isus, but it still means that I can go to thelocal youth group and say ‘I am from theCommunity Foundation…’.”Michael Campbell (36) agreed: “Your

degree of visibility as a donor via aCommunity Foundation can be as high oras low as you want. That is the greatadvantage. And your degree of involve-ment can also be as high or as low as youwant. You can gear your giving through aCommunity Foundation in exactly theway you want so you can be really handson or you can be totally invisible, with ananonymous fund, and nobody would

even know that it was you.” AngusMacDonald thought that there were lim-its on how much protection using a CFcould give a publicity-shy donor: “In real-ity it would take people 15 seconds tofind out that I was the guy behind myfund. But if I go into the village hall thatI have part-funded and look at the list ofdonors, it says ‘the Moidart Trust’ thankgoodness. It is useful to be that one stepremoved, but I do not want to exaggerate;it is not a big step.”

Maintaining focusCommunity Foundations should under-stand donors’ core interests, so that theycan filter out grant requests and presentthem only with funding opportunitieslikely to be of interest. And if a request isdeclined, the CF may be able to put it toone of its other donors. This is a hugeadvantage from the charities’ perspective,as any fundraising request they make tothe CF will not only be directed to morethan one donor, but more importantlythey will be the right donors. JimMcAllister (24) explained: “One of thegreat advantages of setting up a fund atour local Community Foundation is thatit makes it easier to focus on the things weare interested in. We get hundreds ofgrant requests and what I can now do isdirect people to the CommunityFoundation, as all our giving goesthrough that. So we are not saying no tothem, we are saying, ‘Send it to theCommunity Foundation, they willanalyse it and if they feel that it fits with-in our criteria then you will receive adonation.’ The beauty of it is that if itdoes not fit our criteria, it might fit some-one else’s, so the Community Foundationcan point them to a different donor.”Michael Campbell agreed: “One of the

attractive things about the CommunityFoundation is that an application doesnot go to a fund, it goes to the founda-tion, and the foundation looks at it and

35 Hepburn G, Gazing Idly into

the Obscure Distance: Directions

for Community Foundations over

the Next 20 Years, Community

Foundation Network, 2007

30

Building bridges

says ‘It is in this poor part of the countyand it is for disabled kids – I know justwho will be interested in that.’ And per-haps one donor is interested in that par-ticular area and another donor at theother end of the county is interested indisabled kids, so they can broker the rela-tionship to say ‘Well, let’s suggest that thismuch comes from this fund and thismuch comes from that fund’, which oftenworks well.”

The future for Community FoundationsAlthough the philanthropists who hadused CFs were positive about them, mostof the rest had never heard of them. Thoseinterviewees who were involved either at aboard or executive level in CFs wereunder no illusions that there was still ahuge amount of work to be done for theCF model to fulfill its potential in theUK. They all recognised that there waswidespread ignorance, particularly amongpotential donors, about what CFs are,what they do and what benefits they offer.George Hepburn believed that theyshould be a natural home for new philan-thropists and could promote socialchange in their communities. Their devel-opment had been distorted in recent yearsby having to manage government grantcontracts and by the misapprehensionthat they only made small grants. “Aclearer sense of purpose and direction isneeded.”35

Donors as championsMatthew Bowcock (34) recalled that:“Once the director of the CommunityFoundation realised I was willing to givetime to help, she wanted me in every singlemeeting with a potential donor, because Italk not so much as a trustee but as adonor. I say: ‘Here is what I’ve been able todo, and here is why I have enjoyed it andhere is what you have to be careful of ’ andgive a little bit of advice and guidance. Andthe best salesmen for CFs are the donors,

because if one donor says to another ‘Thisworked really well for me’, that is one ofthe most powerful messages.” MichaelCampbell (36) likewise said that he washappy to act as an ambassador: “I am aclient and also chairman of a CommunityFoundation, but it is like the chap wholiked the razors so much that he boughtthe company – I really do think the prod-uct is exceptionally good.” Michael Head(21) echoed this sentiment, saying: “It canbe a difficult concept to sell to people, butonce you get involved in it you realise it isgenuinely fantastic.”

Building strong donor communitiesThere are all round benefits of forming astrong donor community, not just attract-ing other donors. George Hepburn saidthat in his experience: “One of the bestthings we can do is just put people intouch with someone who is a few yearsahead of them in philanthropy, to talkabout some of the issues.” RosemaryMacDonald told us that at Wiltshire andSwindon Community Foundation, whereshe is director, they have consciouslydecided to make a selling point of theirdonor community: “One of the things weare offering to our donors is engagementwith the local community, a social life andintroductions to other people who are likethem. And that is appealing because whenpeople buy their farmhouse in the middleof a field with no neighbours, it can be amassive culture shock.”Matthew Bowcock (34) has witnessed

firsthand the attraction for many donorsof meeting like-minded people in arelaxed atmosphere: “We find that invit-ing our existing fundholders along toevents with prospective fundholdersworks very well. Philanthropists caninfluence other people enormously, andoften organisations forget that rich peoplelike to hang out with rich people, theylike sharing the same problems. If you canput philanthropists together with other

36 UK Giving 2005/06,

CAF/NCVO

37 The Collaborative City:

Working together to shape

London’s future, Young

Foundation, 2008



London: a special case

A survey of individual giving for 2005-06 showed that Londoners gave more on average than any-where else in the country per head of population. Only 53% of Londoners were donors, one of thelowest figures in the country, but their gifts were substantially more than those of donors else-where.36

The sprawl of separate communities and the capital’s sheer size makes motivating commu-nity philanthropists a challenge. A recent report reviewing London’s needs referred to its com-munities as: “less coherent than those in other parts of the country”.37 Nevertheless, Londonhas some historic charitable trusts with large, established endowment funds which have pro-vided consistent support to the capital for generations such as The City of LondonCorporation’s City Bridge Trust and The City Parochial Foundation. London’s new Mayor,Boris Johnson, is soon to launch The Mayor’s Fund with philanthropist Sir Trevor Chinn asthe Chairman. Details of The Mayor’s Fund are yet to be announced but there is likely to be astrong focus on tackling some of the deep rooted social problems in the capital through find-ing and supporting existing successful grass roots projects across boroughs. Michael Brophy,former CEO of Charities Aid Foundation and now vice-chairman of the Capital CommunityFoundation, thinks that a pan-London identity may be starting to emerge: “People associatewith bits of London. In the past it has been said that there is no such thing as a pan-Londonidentity, although arguably with events like 7/7, the Olympics and shared concerns like gunand knife crime, this is changing.”London’s working population is highly mobile and diverse in terms of background with many

commuters coming in from outside the capital, or living on one side of the city and working onthe other side. Several interviewees thought the gruelling work and commuting schedule of theCity’s financiers was a deterrent to them connecting locally. Jim McAllister (24) summarised:“Sitting there in a glass box, they will never get involved in the community. And they never see thecommunity in which they live because they leave early in the morning and come back late at night.Somehow there has to be a way to get them to see the communities both in which they work andlive and that will change their attitude to both.”Fred Mulder has witnessed this lack of local connection in The Funding Network (TFN), the

giving circle he set up in London to which charities are invited to make presentations: “I do notthink that people in London have a great sense of community and at TFN we do not do much tofoster local support of the local community in London, but elsewhere we do; TFN Oxford is doingvery well in that regard.” One reason was the number of international organisations based inLondon which meant that the demands were often different to elsewhere in the country: “OutsideLondon, the proportion tends to be about 80% local organisations to 20% national or internation-al organisations at TFN events, whereas in London it is more like 50:50.” He felt this was not onlybecause of the nature of charities available, but also that the workforce in London had greaterdiversity of backgrounds and a more global perspective.Katharine Barber, Capital Community Foundation’s director, recognised the diversity of

London’s population compared to other cities when she said: “The challenge for anyCommunity Foundation is to respond to the identity of Londoners on many different levels.”Katherine also believed that focusing on citywide themes, such as gun and knife crime, but withindividual projects operating at a grassroots level in London’s communities would be vital. Andof course, building donor relationships would be critical to its success: “We need to create adonor base with some super-high net worth individuals to act as leaders to others who are keento give at a less substantial level.” Capital CF is trying to attract more private philanthropistsand build up a London Endowment Fund. Michael Brophy has written that London needs “a

prospective philanthropists, they reallyenjoy the freedom of that environment.”This was echoed by Angus MacDonald,who emphasised the benefits for CFs inencouraging these sorts of donor net-works: “It is a great opportunity for thembecause if they can get the rich philan-thropic people with interests of their owntogether so that they bounce ideas offeach other and stimulate thoughts, thenthey will benefit too.”Building strong donor communities also

means considering the mass affluent. CFsneed to consider getting such donorsinvolved early in their careers, using theirrelatively small amounts of money collec-tively to bring about greater change thanwould be otherwise possible and establish-ing long-term relationships with them sothat they can act for them when they havebigger gifts or investments to make. SirPaul Nicholson told us that “the bestdescription of Community Foundationscame from America: they enable peoplewith more modest means to make a majorcontribution.”

Offering flexible service to donorsOur interviewees agreed that one of thegreatest attractions of CommunityFoundations for donors was the ability tomake the service fit the client’s needs, andthat this message needed to be communi-cated effectively to potential donors. Thetraditional role of a CF was to collectdonations to build an endowment thatcould provide long-term funding to

organisations working in the community.However, community philanthropy expertShannon St John has argued: “The wide-spread perception that traditionalCommunity Foundations sustain theiroperations by building endowments forthat purpose is a misconception.”41GeorgeHepburn explained: “It is asking a lot forpeople to give us £1 million or £10 mil-lion for endowments just like that. Theyneed to build their trust in us and we needto earn their respect. We try to involvethem in how their money is spent andnever forget it is their money. And somepeople will never want to give up thatcontrol in perpetuity and prefer to handus the money year on year.” NickFerguson (16) is an example of someonewho wanted to manage his money him-self, given that is partly what he does for aliving, but wanted to give through a CF inorder to access their local expertise, andthe Scottish CF were able to provide astructure that worked for both them andthe Fergusons.Many CFs are increasingly focused on

providing donor services rather than pureendowment building. This trend began inthe US, where increasing numbers of CFsbegan to establish donor-advised funds sothat individual donors or families could setup named funds within the foundation andretain some control over the distribution ofgrants.42 This focus on a donor’s interests iscritical to the future development of CFs inBritain. Michael Brophy wrote in his pam-phlet for Capital Community Foundation:

38 Brophy M, Why London

Needs A Rich, Powerful

Community Foundation, for

Capital Community Foundation,

2008

39 The five London CFs are:

Capital Community Foundation,

Thames Community Foundation,

St Katharine’s & Shadwell Trust,

East London Community

Foundation and North West

London Community Foundation.

Capital CF and Thames CF

announced in summer 2008 that

they were to merge at the end of

the year.

40 Carrington D, The London

Community Foundation: Review

of Development (1997-2003) and

of Future Prospects, report com-

missioned by the Charles

Stewart Mott Foundation and

the Office of the Deputy Prime

Minister, 2004

41 St John S, “Questioning the

conventional wisdom”, Alliance

Magazine special feature Focus

on Sustaining Community

Philanthropy: Looking for New

Models, March 2006

42 This concept of “servicing

donors” was first floated in the

US by Bill Davidow, a prominent

Silicon Valley business leader, in

a speech to the fall conference

of the Council on Foundations

in Miami, September 1990

32

Building bridges

powerful injection of private capital.”38 There was a previous attempt from 1997 to 2003 to forma London-wide organization which could strengthen the development of the existing CFs in thecapital, of which there are five.39 Money that had originally been raised for the development ofthis London CF was instead used to commission a comprehensive review into its futureprospects.40 It noted that there are peculiarities to London which suggest a pan-London CF hassignificant challenges. Michael Brophy said of the challenge for CFs in London: “We have got ahuge journey to travel down to unlock people’s imagination about what they can actually achievewith philanthropy in London. The private donor to date has ignored our sort of philanthropywhich is not the case in the regions.”



43 Brophy M, Why London

Needs A Rich, Powerful

Community Foundation, Capital

Community Foundation, 2008

44 Such as Barry Gaberman of

the Ford Foundation, quoted in

Alliance magazine, March 2006

“We think of our supporters as clients.Clients and providing service may seem tosome at odds with charity. We think not.Our value is to work out with a foundationor a company (and its employees) but aboveall with individual clients how best to deliv-

er in London what they want to achieve.”43

A further development is themed funds,which could give to organisations outside aCF’s geographic area and even overseas,though some are uneasy about this shift ofemphasis.44

3Communitiesof purpose

3.1 MotivationGuy Hands (40) explained the ethosbehind his philanthropic journey: “Theoverall binding question for what I do phil-anthropically is this: in an ideal world, whatwould I want this community to be like? Iknow that utopia is impossible, but I wantto know how my contribution around theedges can be most effective in at least work-

ing towards that utopia.” All philanthropistswant to bring about change, but some aremore driven by an innate sense of duty andsocial responsibility. Others combine theirsense of responsibility with a passion forchange which makes them incredibly pur-poseful and if time and skills allow them tobecome personally involved in a hands-onmanner, frequently highly effective.

34

Matthew Bowcock,

Surrey

After living and working allover the world, Matthew soldhis technology start-up com-pany to a UK company andmoved to Surrey. He had noties or roots there and, by hisown admission, he knewnothing about the local com-munity or its needs. He wasvery aware that Surrey is com-muter territory and has amobile population. Ratherthan being deterred by thisenvironment, he saw it as anopportunity: “All the morereason to be communityminded.” Much of his com-munity philanthropy is under-taken jointly with his wife, Dr.Helen Bowcock, who is nowundertaking research intocommunity need in Surrey.Rather than what is often

deemed the more conventional

method of the communityfinding donors and drawingthem into charitable initiativesthrough fund raising activities,Matthew used their philanthro-py as a way of integrating him-self into the community. WhenMatthew described his motiva-tions, he said: “It is aboutbuilding yourself into the com-munity”. When it comes tocontributing in a community,Matthew believes there are twokey drivers: “Either someonegets involved with their geo-graphic community becausethey come from there and feel asense of loyalty to it, or they getinvolved because they actuallywant to get engaged physicallyand mentally and they want tobelong in their community, toparticipate in it.”He sees the latter as an

opportunity for a new genera-tion of philanthropists today

given our more mobile popula-tion of the 21st century:“When people move fromLondon or overseas to a newpart of the UK at a certainstage in their life, they arrive tolive in a place, they have nosocial networks, maybe just acouple of friends through work,and they want to build socialcapital. This is an opportunityfor philanthropy.” In fact, inMatthew’s case it is about morethan just building himself intothe community since he isdeeply driven by an innatedesire to bring about socialchange. He just prefers it to bein Surrey so that he under-stands the role that the organi-sations he is supporting canplay in local society. “Will I livein Surrey until I die?” saidMatthew; “It does not matter,right now it is where I live andI have an obligation to it.”

Communities of purpose


Matthew has high hopesfor what communities canachieve, believing that strongcommunities make for bettersocieties. He believes thatstrengthening relationshipsbetween ‘haves’ and ‘have-nots’ is vital and that philan-thropy has a key role to play.Now that he is an active phi-lanthropists with a thrivingtrust managed by the SurreyCommunity Foundation,Matthew has had his eyesopened to the vast dividebetween the relatively welleducated, professional popula-tion of Surrey – largely com-muters – and the populationof local people who are gener-ally in less well paid jobs andsome of whom have sufferedfrom the weaknesses affectingmany areas of Britain today.Matthew said that until hestarted to actively supportlocal charitable projects, “therewere places I never knew exist-ed – a housing estate downthe end of a road just past ourhouse, for example.” Matthewtries to address areas of depri-vation with social change ini-tiatives and has a particularinterest in how to turn hous-ing estates around throughinitiatives which are led byresidents.But he did not find it easy

to uncover causes and proj-ects. Matthew recounted: “Tobegin with I found it very,very difficult to give ourmoney away in Surrey. It wasnot until I started to under-stand the concept of aCommunity Foundation that

I actually started to find thegroups to get involved with.Giving away money is much,much harder than peoplethink.” Helen reinforced thisin her speech to The Tyne andWear Community Foundationin early 2008 saying: “TheSurrey CommunityFoundation has provided aneffective means for us to targetand evaluate grant applica-tions. Perhaps of most impor-tance, it has connected us withour local community, provid-ed connections which had notexisted for us since neither ofus is from Surrey. It hasopened our eyes to the socialneeds on our immediatedoorstep to which, I hate toadmit it, we were completelyoblivious.”So impressed were they

with what Surrey CommunityFoundation could offer them,they threw themselves whole-heartedly into it. Helen is nowundertaking research into thescope for community philan-thropy in Surrey and Matthewis on the boards of the SurreyCommunity Foundation andthe umbrella organisation, theCommunity FoundationNetwork (see page 26).Matthew is a great believer

in carrots instead of sticks andhe is very clear that “thebiggest motivational carrot ofall is engagement.” Heexpanded: “Encouraging anindividual to become involvedwith a cause, participate in agroup’s activities, visit the siteof the group’s activity, join thediscussion about the organisa-

tion’s future, become a trusteeor whatever it may be is thesingle biggest trigger for main-taining someone’s interest.” Itis not about “performance tar-gets and growth” but in the“qualitative dimension, theimpact that the service has onpeople’s lives and what wouldhappen if that service wastaken away.” Conducting phi-lanthropy locally, in his geo-graphic community allowshim to ‘‘engage’’ with groupshe supports with his effortsand his money. Matthewsummed it up as follows: “Ifind the ability to live andbreathe exactly what our sup-port is offering is a key moti-vator to keep going.”His enthusiasm for bring-

ing about social change andfor understanding whatMatthew calls “the socialdynamic of change” appears tohave helped him to overcomewhat both Matthew and otherinterviewees have referred toas “a slightly uncomfortablepower relationship.” By thisthey mean the tension thatsometimes exists betweendonors and the workers incharitable organisations, butmost frequently and moreacutely, between donors andbeneficiaries. He tries to becareful that his actions are notdivisive. He recognises thevalue of philanthropic activityin building bridges in commu-nities – the bridge among thedonor community itself(Matthew refers to donors as“the best salesmen” for bring-ing other donors on board to

Matthew Bowcock said: “I find the abili-ty to live and breathe exactly what our sup-port is offering is a key motivator to keepgoing.” Many find it equally important tohave some control or to observe the resultsof their philanthropic endeavours. DavidGold explained that a desire to take anactive role in their philanthropy had influ-

enced his family’s decision to focus onLondon: “We insist that the trustees visit allof the projects twice each year in order toensure we are using our money wisely, sologistically it is much more straightforwardif we limit ourselves to London. And franklythere is enough need here.” Jim O’Neill(38), chief global economist at Goldman

36

Building bridges

a cause) and the bridgebetween the donor communi-ty and the people operatingthe charitable organisationscan be very rewarding andrelationships are relativelystraightforward. However, thebridge between donor andbeneficiary can be more com-plex depending on the issuebeing addressed and he is sen-sitive not to patronise or causeresentment at this level.He believes that much of

this possible tension can beavoided through communica-tion. He explained that experi-ence as an entrepreneur build-ing businesses can be valuableto the many social purpose

organisations he visits today –site visits are a key part of hisactivity as they help him toconnect with his community,understand local needs andensure that he uses theirmoney to great effect.Matthew finds it difficultwhen determining how tospend his money whether toaim for “a large impact on asmall number of lives or smallimpact on a large number oflives” and whether to “treatthe symptom or try to addressthe cause.”Ultimately he is driven by a

sense of responsibility towhere he lives today and toimprove the quality of life for

people around them. This isdriven by an interest in socialchange and a desire to be ableto “touch” his philanthropy.He recognises that, in today’sworld of mobility, philanthro-py will not necessarily bedefined by geographical com-munity. Matthew summarisedthe future for philanthropy bysaying: “I think people buildtheir own philanthropic com-munities, particularly whentheir community is a cause.With the modern social net-working technologies peoplecan build completely newcommunities out of philan-thropy, but they are as likelyto be virtual as geographic.”

Michael Campbell,

Hampshire and

Perthshire

“I have always had a probono element to my workinglife,” said Michael, chairmanof the Ellis Campbell Group.He explained that being self-employed has allowed himgreat freedom in this regard:“I have always been able todo roughly what I want, so Isuppose I’ve always spent onaverage about 30 per cent ofmy time on pro bono things.

For a long time though, ourfamily charitable giving wasreactive, as it so often is – wedealt with things as theyappeared or waste-paperedthem. Then around the endof the 1980s we decided as afamily to refine our thinkingand set up a charitable foun-dation that would have alocal emphasis.”Michael is clear about what

underpins his philanthropy:“Communities in the broadersense have broken down for

different reasons. Most peoplecommute, so they are notworking where they live anddo not have that same rela-tionship with a place. Many ofthe old anchors are missing –no pub, no local shop, nolocal school, and the church isno longer providing the samesort of cement that it used tofor communities.” Michaelfirmly believes that local phi-lanthropy, done properly, canbe a tool to help rebuild andstrengthen weakened commu-



nities. He said: “I think with-out a doubt it can, and we tryto focus our giving as much aspossible on anything that wethink will help reconnectcommunities. Anything thathelps to reform community is,to my mind, terribly impor-tant because with communitygoes responsibility, and itseems – although this may bea generalisation – that respon-sibility is something that islacking today.”Although community

breakdown is the issueMichael addresses, he is drivenby his active involvement inthe projects he supports. It isimportant to him to be closeto projects and engage in ahands-on manner. “You havegot to have a hand somewhereclose to the tiller.” Having agreater level of engagementwith the organisation andcauses he is donating to ismore rewarding for him thanpassive giving. “The benefit ofgetting more closely involvedis that you can understand theissues and organisations thatmuch more. There are somepeople who like to write acheque and others who like toget their hands a bit dirtier. Ithink there is a huge benefitto getting a bit closer to someof these projects and seeing ifthere is something to be doneto help them work more effec-tively.” Michael believes thatin most cases philanthropistswill be able to add value:“Many of the people whomight be philanthropists havegot skills in terms of manage-

ment or specialisms whichthey could bring to bear andwould be enormously helpful.”Michael does warn, however,that a local philanthropistshould not assume that theirinvolvement will automaticallyconnect them with the othermembers of the communitythey might be trying to help:“I do not think one shouldlook for a close relationshipbetween donors and benefici-aries. It is unreasonable toexpect this as generally peopledo not want to be the subjectof philanthropy and the closerthey get to the source of themoney the more uncomfort-able they get.”However, Michael’s own

experience has strengthenedhis connection with the com-munity. As well as the work hedoes in Hampshire, he and hisfamily are also involved inPerthshire, where they havehad a home for many years,and their philanthropy therehas had a huge impact ontheir relationship with theplace. “Although our day-to-day involvement in Perthshireis less, we have probablybecome more involved in thecommunity through our activ-ities Perthshire than throughmost of our involvement inHampshire.” When they firstdecided to focus their givingin Scotland as well asHampshire they realised thatit was a different experience,as they were more removedfrom the recipients of theirgifts. A chance conversationwith a friend led them to the

door of the ScottishCommunity Foundation,where they set up a fund tohandle their giving inPerthshire, which “turned outto be an enormous success.”A few years later, Michael

decided to narrow their focusin the area: “I wanted toestablish an initiative in ourlocal town to address a partic-ular problem, which was thatthe police presence had beenremoved. There was drugpushing going on in front ofeveryone’s eyes and the youngpeople were becoming discon-nected from the community,from ambition and fromeverything else. I wanted toget a youth initiative estab-lished, but I knew it would behard from a distance. So Ispoke to the CommunityFoundation and said ‘this ismy idea, can you help me?’and they said ‘of course’. Ihelped set up the initial com-mittee, but they then tookover the running of it. And ithas proved to be a great suc-cess, and even spread to therest of highland Perthshire.”The project has forged linksfor Michael across the localcommunity. “In order to getthe initial committee togetherit meant I had to go out andtalk to the relevant peoplewho would help. So I metpeople from all different strataand walks of life which helpedme become more bound intothe community even though Ido not live there all the time.”He subsequently became

involved with his local

Sachs, said that this was also one of the keyfactors in the decision to focus the charityhe co-founded, SHINE (Support and Helpin Education), on London in the early days:“We wanted to make sure that we couldproperly monitor the effectiveness of themoney we were giving.”Michael Hintze (42) was clear that bring-

ing about change was an important motiva-tion for him. But he needed to give within

frameworks that allowed him to understandthe level of influence he was having. So byfocusing his giving to projects near his homein Wandsworth, to his alma mater inSydney, to a community he is part ofthrough his faith, and to a community he ispart of through his interest in the built envi-ronment for example, he can stay in controlof his activities and understand their influ-ence. He concluded: “If I was giving money

38

Community Foundation inHampshire, which he current-ly chairs, and he is happy toextol the virtues of these vehi-cles to other philanthropists.“I am like the chap who likedthe razors so much that hebought the company,” hejoked, “I really do think theproduct is exceptionallygood.” One of the main bene-fits is the level of local expert-ise Community Foundationshave: “They can provide adonor with the ability to bemore focused, so he can say,‘These are my interests’ andthe Community Foundationcan say, ‘I’ve got a fantasticcase here in Hythe’ or ‘I’ve

got a very deserving cause inPortsmouth and you can golook at them. If you do notlike either of those I can pointyou in another direction.’ Hepointed out that this level ofattention to a donor’s specificneeds can be incredibly help-ful: “There is no way that thatdonor, who is probably verybusy, could investigate forthemselves where thoseopportunities are. TheCommunity Foundation givesthem the ability to learn somuch more.” When it comesto making donations,Community Foundations canalso offer another advantageto donors who might be wor-

ried about becoming a mag-net for fundraising appealsbecause they act as “an inter-mediary.” Michael explained:“Your degree of visibility as adonor via a CommunityFoundation can be as high oras low as you want. That isthe great advantage. And yourdegree of involvement canalso be as high or as low asyou want. You can gear yourgiving through a CommunityFoundation in exactly the wayyou want so you can be reallyhands on or you can be total-ly invisible, with an anony-mous fund, and nobodywould even know that it wasyou.”

Jim O’Neill, London and

Manchester

Jim O’Neill, chief global econ-omist at Goldman Sachs andfounder chairman of the chil-dren’s educational charitySHINE (Support and Help InEducation), admits that hisupbringing had a huge influ-ence on his approach to phi-lanthropy: “I came out ofschool in Manchester withpeople who were very disad-

vantaged and it has alwaysstuck with me. There werepeople who were a lot brighterthan me, but because of theirbackground and family cir-cumstances had no real chanceof getting anywhere, and thathas always influenced me.”A visit to the charity, Kids’

Company, through theGoldman Sachs CommunityTeamworks program was thespur to serious philanthropy.

He explained: “The influencewas always there, so as soon asI came into more significantwealth following the GoldmanIPO I was easy bait to thinkabout doing something interms of giving money. ThenKids’ Company just crys-tallised in my mind that Iwanted to focus on educa-tion.” This also appealed to hisprofessional outlook. “I am aneconomist and I believe the

Building bridges



most important thing is toraise productivity, and educa-tion is critical for that.SHINE as an organisationbelieves in projects to helphighly disadvantaged butaspiring children, particularlyat primary level.”Along with a handful of

like-minded City colleagues,Jim set up SHINE to try toaddress the problems of edu-cation in deprived parts ofLondon. But they did notallow their enthusiasm to rushthem into anything. Insteadthey approached it as theywould a new project at work.Jim said: “We got three peoplewe knew to do a ton ofresearch for us for six monthson everything that was goingon in education.” The organi-sation started with a board offive trustees, all of whomcame from City backgrounds,and were keen to apply therigour and focus on resultsthat they shared in their workto the way SHINE operated.This approach is a definingcharacteristic of the organisa-tion. “New trustees or newpeople we associate ourselveswith have to buy into our phi-losophy otherwise it does notwork.”SHINE’s work is primarily

focused on projects inLondon, and the successes ithas had so far indicate that ithas a positive impact on thecommunities in which it oper-ates. When asked whether hefeels more a part of these com-munities as a result of his phi-lanthropy, Jim is cautious: “I

would not be arrogant enoughgiven my current situation tothink that being involved inSHINE means I am going tobe hanging out with the kidsin one of our schools in theEast End!” But he is sure thatit has built a communityamong those who get involvedin funding SHINE and arebrought together by the com-mon goal of improving educa-tional provision for children.By way of evidence he said:“We are just embarking onselling tables for our annualfundraising dinner. I have sentout messages to people thatotherwise I would not reallytouch base with, but there is asense that many of them arekindred spirits, so theirresponse is ‘Yes, definitely!SHINE is such a good thing,and you guys do it in such away that the dinner is a funnight as well.’ That is reallystrong.”As well as dictating the

central theme of his philan-thropy, Jim’s upbringing ledhim to the conclusion thatthe majority of his effortsshould be focused on London,where he lives and works. “Iwas so aware from my schooldays of the disparity betweenrich and poor that can exist inthe space of a few miles, so itwas obvious to me that weshould do what we were goingto do here in London.” Actinglocally also has another bene-fit that appealed greatly to theresults-oriented philanthro-pists involved with SHINE.“One of the strong beliefs we

had - and this just comes withwho we are as business people- was that we wanted to makesure that we could properlymonitor the effectiveness ofthe money we were giving.That has been a huge influ-ence on what we do withSHINE, and keeping track ofour impact is so much easierwhen our staff can just hopon the tube and go and seethe projects we are funding.”The SHINE model has, to alesser extent, also been rolledout in Manchester, but Jimadmits that the greater dis-tances involved can present achallenge to the desire tomonitor impact: “We havethree-and-a-half full-time staffhere in London. InManchester we have to relyon a link person, so find weare a bit less comfortable withwhat we do there, as we are soused to having it all withintouching distance.”Because he is so close to

the projects that SHINEfunds it is much more appar-ent when the relationship witha grantee is not going accord-ing to plan. And Jim is honestabout this being one of therealities of philanthropy.“There have definitely beendecisions we have regrettedand pulled away from. Thereare no hard feelings on theorganisations we were fund-ing, it is just that some of thethings we touch will turn outnot to have been the rightthing for us to have done withour money, based on subse-quent information.”

to aid in Africa, it is not clear to me that Iwould feel able to manage that properly inmy current set up.” Michael Campbell (36)summarised that in order to have influence:“You have got to have a hand somewherevaguely close to the tiller.”

Michael Oglesby (18) said: “Not onlycan you be confident that your money ishaving a greater effect, but you can see thateffect because the outcome is right on yourdoorstep. For a businessmen like me, beingable to see that my cash is making a visible

40

Building bridges

Guy Hands, Southwark

and Kent

Guy is Chief Executive Officerof Terra Firma, the privateequity firm which was estab-lished in 2002 as the inde-pendent successor to NomuraPrincipal Finance Group setup in 1994. Terra Firmainvests across a range of indus-tries including renewable ener-gy, aircraft leasing, residentialproperty and gas distributionbut is best known for its own-ership of Odeon, the cinemachain, and EMI, the recordlabel. Guy and his wife Juliaare active philanthropists andTerra Firma supports a num-ber of charities and causes inSouthwark, where their officeis located.Guy has experienced many

diverse communities at differ-ent stages in his life includinghis secondary school, universi-ty, home and work place. It ishis desire to support thesecommunities that drives hisphilanthropy. He explained:“The overall binding questionfor what I do philanthropical-ly is this: in an ideal world,what would I want this com-munity to be like? I know thatutopia is impossible, but Iwant to know how my contri-bution around the edges canbe most effective in at least

working towards that utopia.”For each community he

supports, the needs are verycarefully assessed. InSevenoaks, a fairly wealthyarea of Kent, his generosityfills the gap of non-govern-ment funded projects such ashospices and caring communi-ties for the elderly. InSouthwark, Terra Firma focus-es on the development of amore equal and diverse socie-ty. Guy explained: “As peopleworking here, we are transi-tional, we come in and we goout, but within the Southwarkcommunity there are peoplewho live here all the time andtheir economic position is verydifferent to ours, their agegroup is quite often different– very young and very old –and at Terra Firma we feel thatwe should support the currentneeds of the community thathouses us.”Giving cannot just be

about the past, so in thinkingabout supporting their sec-ondary schools, for example,Guy and Julia feel that it isimportant that the schools donot rely solely on supportfrom their alumni. They alsoencourage the parents of cur-rent pupils to get involved inprojects. Guy explained: “It’salmost saying, if I was there

today, what would I want?”Guy is frank that his first

efforts at giving were not espe-cially rewarding. “My initialexperience at community giv-ing was quite disappointingbecause a number of the chari-ties I chose to support wereinefficient and disorganisedand I did not feel that mysupport had any lastingeffect.”It is important to Guy to

be able to see the effect of giv-ing, and to be certain that thesupport is fostering long-termchange. “If you cannot see theimpact, it is very difficult for abusinessman to give. A com-munity charity may notalways have the advantage ofscale, but it does have theadvantage of closeness andbeing able to demonstratefirst-hand what it does.”And like many hands-on

philanthropists, he wants toremain connected, to establisha relationship with the recipi-ent organisation. Such rela-tionships form the bedrock ofan on-going desire to give,and he summarised his expec-tations as follows: “For thesmaller size gifts, a thank-youletter is fine, for the mediumsize gifts, I want to understandthe effect and whether theobjectives have been achieved



and for the larger size gifts Iwant to understand that and Ialso want to understand whateffect that charity or appeal ishaving on culture and widersystem change.”He is realistic about the

challenges of making lastingsystem changes, particularlywhen operating at the locallevel. “It is rare to come upwith a local approach thatcould both be scaled upnationally and that is unique.It is similar to business in thisregard – the number of timesone comes up with a businessidea that is different, thatnobody else has thought of,that can then be scaled outnationally, is pretty small.”Despite this, he does acknowl-edge that the success of hisefforts to persuade Mansfield,his Oxford College, to takemore applicants from lessprivileged backgrounds has ledother colleges and universitiesacross the country to adoptthe same approach. Similarly,providing grants for less eco-nomically able children toattend the international bac-calaureate private schoolSevenoaks is another initiativewhich can be rolled out else-where.Guy’s reaction regarding

the volume of fundingrequests that land on his deskis typical of a visible philan-thropist. He clearly finds itemotionally tough to makethe decisions on what to sup-port. “Each year we try toweigh up how to spend ourbudget for our philanthropy

and each year it is very, verydifficult because the peoplearound us have expectationsand they can be difficult todeal with. There are excellentcharities addressing criticalcauses, but perhaps they caneasily raise money elsewhere.There are important charitiesthat have got themselves hope-lessly into debt and perhapswe can clear that debt andmove them on or perhaps theywill just get into debt again.There are friends doingfundraising that we perhapsdo not think will be very effi-cient or effective and they canbe the most difficult to handlebecause we know them.”These decisions are difficult

because with system-changingphilanthropy comes a debateabout whether the cause isworthy or not, and he is verykeen for his philanthropy tobe an overall force for good.Although he is dependent onhis wife for his philanthropicdirection at home and on theemployees’ charitable trustcommittee at Terra Firma fortheir work in Southwark, it isclear that his leadership anddeep consideration of the bestway to conduct his charity isessential to what he does.Colleagues describe hisinvolvement at work as “sym-bolic as well as practical” inthat he acts as a role modeland also matches all employeedonations to the charitabletrust.He hopes his employees see

him as a role model in philan-thropy and unusually for a

financial institution, the firstitem on the agenda of theMonday morning meetings isoften a report from the charitycommittee or a presentationfrom a beneficiary charity.However, he does not want tobe seen to impose, saying: “Ido not judge people onwhether they give or not, infact I do not know who hasand who has not given, but Ithink it is important as anemployer to provide an outletfor people to give and to showthem that I think it is impor-tant.”Giving employees the

option to donate to charities,he believes, gives them agreater sense of civic participa-tion: “It shows that there issomething beyond doing thebusiness which is importantbecause it gives people a realconnection and a realism. It isvery easy in the City to getdisconnected from society, yetunderstanding that society ismultilayered is very, veryimportant.” He is keen to clar-ify that it is not just hisemployees that benefit; addi-tionally he believes it is benefi-cial to society if the charitiesthey support recognise thatTerra Firma employees are“not just suit-wearing bean-counters, but have a humanside as well.”He recognises however, that

monetary donations help onlyup to a point. It is up to indi-viduals to build bridges acrossthe different layers of societywhich requires time and effortas well as money. He notes

42

Building bridges

difference is incredibly appealing.” MichaelHead (21) was clear that for him beingable to see the results of his giving wasmuch more effective than having it report-ed to him: “I want to go and look. I don’twant to listen to someone talking to me for

half an hour, I can tell in ten seconds formyself. For instance, when I walk intoschool assembly at the Spires Academy, Ican see the difference immediately.”Not everyone felt they had to be in

direct contact with the things they were

that for the majority of socie-ty, large sums of moneybecome impossible to relateto, saying: “For most peoplein society, a £1,000 gift is anenormous amount of money,

and so to hear that someonein the City has given £5 or£10 million, does not reallyregister in the same way as itis impossible for most peopleto visualise that sort of money,

so they hear it, but then it isgone. By contrast, meetingsomeone and seeing that per-son cares and is willing to givesome time, is probably moreeffective in building bridges.”

Michael Hintze, London

Michael is the founder andchief executive of CQS, one ofthe largest European alterna-tive asset management groups.While the Hintze family livesin Wandsworth, Michael grewup in Australia where heattended the University ofSydney and earned a place atHarvard Business School, afterwhich his career in financebegan. To consolidate theirgiving and take more responsi-bility for their philanthropy,he and his wife Dorothyestablished the Hintze FamilyCharitable Foundation in2004.His early education at St.

Leo’s College, a school run bythe Christian Brothers inSydney, helped to shape hisview of community and fuelleda sense of obligation to giveback that continues to this day.Although he works in a globalindustry and travels all over theworld, he has experienced first-hand the opportunities provid-ed by travel and technology:

“Nowadays with killer telecom-munications and travel, the def-inition of community haschanged and community circlescan be created from diasporas.”When asked to define the

role of community in influenc-ing his philanthropic activity,Michael explained: “I have myold university in Sydney andHarvard Business School, thenthere is my church activitywhich expanded to theVatican Museums in Rome,then we have got our localcommunity at home wherethere is no question that thework we have done with theWandsworth Museum is aboutsupporting the community inwhich our children are grow-ing up and to which we havean obligation to give back.”This view is also reflectedthrough CQS which donatessubstantial amount to com-munity causes.Whilst the traditional

‘home’ community he nowlives in with his family and inwhich his children go to

school is one importantframework for his philanthro-py, he is also influenced bycommunities that have formedaround his interests such asthe arts, education, healthcareand religious causes.For Michael it is the com-

munities in which he givesthat provide him with the con-text and framework thatenable him to make sure hismoney is benefiting peopleand causes to the maximumeffect. He may wish to havebroader influence in his phi-lanthropy, but he aims to doso through channels which feeltangible to him. He explainsthis saying: “One of the driversfor me in my philanthropy isthe ability to influence. I thinkif I was giving to causes inAfrica, I would not have thesame ability to influence as Ihave by giving to the commu-nities in which I am involvedon a daily basis, whether thatis where my children are grow-ing up, the church or my almamater.”



He expands on this pointexplaining how his day jobalso influences his philanthro-py: “We do like to see what isgoing on so there is an ele-ment of a market place, and asa trustee of the Institute ofEconomic Affairs, that is quiteimportant to me.” He alsoprefers to do high impact butlower profile philanthropy say-ing: “Giving to big causes cansometime be a bit of a mediaevent and I prefer the morecommunity type of event.”At home he feels the pull

of his local community verystrongly but thinks thatWandsworth may be differentto other London boroughs inthis regard: “I like where Ilive, I feel very connected tothat area and we enjoy oursupport of Trinity Hospiceand Wandsworth Museumenormously. But Wandsworthhas a less transient populationthan London boroughs likeBelgravia and Chelsea thathave many foreigners in themand many people with secondhomes elsewhere that it mightmake it hard for them to con-nect with their community.”His support of Trinity

Hospice has been crucial tothe institution. He believesthat when the hospice was indire need of funding it wasclever to target local residentsand it was right that theysupported it: “TrinityHospice is a hospice thatserves the community and issupported by the community,it is good for these organisa-tions that serve the commu-

nity to be funded and run bycommunity members as aforce for good.”Michael believes that if

individuals are visible in theirsupport of projects or causesin their community then theywill be that much more com-mitted. Of his own support ofthe Wandsworth Museumwhich was going to be closeddown before he stepped in hesaid: “I will try my utmost tomake this work and that ispartly because it is on mydoorstep and part of a com-munity in which I feel veryembedded.”But all the time that he is

operating at this very locallevel in Wandsworth, he alsoconsiders the broader pictureand the broader framework inwhich he has lived his life andhad his successes: “The UKhas been very good to me inallowing me to achieve thingsI want to do and much ofwhat I do philanthropically inthe UK is driven by that desireto give back to the country forwhat it has given me. I believevery strongly this is an obliga-tion.”He reflects on how philan-

thropy can help to buildbridges across society andrelates a story about giving tohis alma mater, the Universityof Sydney, where he was oneof the first people to give asignificant amount for a verylong time. When he wasinterviewed by reportersabout the gift he was treatedwith some suspicion as he wasnot integrated into that com-

munity and they did notknow him well. Once hestarted to explain his storyand where he came from, theatmosphere softened. Thescepticism was highlighted bythe fact that he was the firstbig donor to the University,something which has nowchanged as more donors havefollowed suit.He used to be uncomfort-

able with people knowingabout his philanthropic gifts,but he has become acutelyaware of the importance ofbeing public to a certaindegree in order to inspire andencourage peers to action andof the importance of actingtogether in a community ofphilanthropists in order tobring about change. Hisrecent appointment as atrustee of the NationalGallery has allowed him to dothis at a new level. He sum-marised: “No man is anisland…Giving to a cause oran organisation can broadenthe net and build a peer net-work of donors, there arefriends and colleagues whosometimes support what I doand I sometimes support whatthey do.”Nonetheless, he is realistic

about what such publicity cando to the individual and aboutthe ability to build bridgesacross different groups in soci-ety through philanthropy.“When you start giving thesort of money I am giving andrunning the sort of organisa-tion I am running, the worldbecomes pretty strange.”

44

Building bridges

The Arts: a special case

Arts organisations often have strong groups of supporters and are particularly well placed to fostera sense of community among donors. Vernon Ellis, the recently retired international chairman ofAccenture, is a keen supporter of the arts, chairman of English National Opera, the ClassicalOpera Company and a trustee of the Royal College of Music. In his experience, arts organisationscan foster a sense of community among their supporters: “At the Classical Opera Company, forinstance, we built a network of supporters who all got to know one another, and we would haveevents to bring them together. We had one event at the Barbican as part of the Mostly Mozart sea-son and got a lot of our supporters along – we then held a dinner afterwards for them and therewas an obvious sense of community.” And, he added: “People do like to join together with otherlike-minded donors, but they also like the sense of community they develop with the artists. Insome ways, this is easier to achieve with smaller organisations but it is certainly possible also toachieve with larger organisations, for example with a production syndicate or the young singersscheme for supporters at English National Opera.”

This greater sense of collaboration between donor and recipient is peculiar to the arts. A patronof the arts and an up-and-coming young musician have a shared interest or purpose in a way that adonor to a homeless charity and a homeless person, for instance, could not be said to have. Thedonor and the musician, artist or actor are members of the same community of purpose or interest.Michael Campbell (36) noted: “…generally people do not want to be the subject of philanthropyand the closer they get to the source of the money the more uncomfortable they get”. But this dis-comfort is reduced by the more overt element of enlightened self-interest involved in giving to thearts: the end result of supporting arts institutions will usually be a performance or an exhibitionthat the donor will enjoy in addition to the normal satisfaction derived from philanthropy.

In some cases, this sense of enlightened self-interest on the part of the donor is pretty strong, asVernon explained: “As well as supporting the art forms that they care about, the privileged access tostar performers that can come through philanthropy is also an attraction.” The bonds formed betweensupporters and artists are real and strong: “There is in many cases a sense of truly getting to know andlike the artists, who are usually very likeable and interesting people. And the feeling of being closer tothe artistic endeavour is very appealing for many donors.” Speaking of his own experience, he said: “Itis great fun – I have a lovely relationship with a lot of musicians, and sometimes we have had events atmy house where people come and play. It is not why I do it, but it is a wonderful extra benefit.”

Supporters of the arts may have strong views of their own on what they like and how thingsshould be done. If these views conflict with those of the people running the organisation, it can beproblematic. However, Vernon believed that although this occasionally still happened, it is less likelynow that donors and artists had a better understanding of each others’ concerns and needs: “Oftenwhat caused problems was an artistic director having a very purist approach that disregarded theviews of both supporters and audiences; it was very producer-led. In most cases now there is recogni-tion that although one does not simply abandon standards, one has to take account of public tastesand the realities of commercial pressures otherwise the organisation will simply go bankrupt.” Takinginto account the views of donors and audiences was increasingly important according to Vernon,because: “In the past, the danger of going bankrupt was pretty remote because the Arts Councilwould be on hand to bail you out. That is not really the case now, so arts organisations need to have abetter understanding of private funding and the needs of donors.”

There is still a substantial amount of public funding alongside the private funding in the artssector and donors have had to accept an appropriate level of control. Vernon pointed out: “If anorganisation is receiving substantial public funding, should a handful of private donors be able tohave a huge say in the running of that organisation? The answer, surely is ‘no’.” But if a small

funding, but wanted to keep abreast ofhow their money was being used. JimMcAllister (24) was clear that the fact thathe could have impact at a local level of akind that he could not at a national orinternational level made him determinedto stick to the former: “I want to affect thecommunities that I am working in. I can-not do that by giving nationally because itwould never percolate down. So I tend tofocus at a local level because I feel that ishow I can best help.” Guy Hands (40) saidthat, in general, “if you cannot see theimpact, it is very difficult for a business-man to give. A community charity maynot always have the advantage of scale, butit does have the advantage of closeness andbeing able to demonstrate first-hand whatit does.” This was a point of view endorsedby Alexander Hoare: “I have more confi-dence about where our money is goingwith a local initiative and we have more

visible feedback. We also give to big chari-ties, but on the whole we are more mindedto give to things where we feel we are mak-ing a difference and can be confident themoney is being spent well because we cansee the effects. We have a finite amount ofmoney, so we either a) pour it into a bot-tomless pit, or b) put it somewhere wherewe can see it working really effectively.Which do we do?”

3.2 Methods3.2.1 Venture philanthropy and socialinvestmentMany of the philanthropists we interviewedwho have created their wealth themselvesand done so fairly quickly through businessor finance want above all to apply their skills.Breakthrough (45), the partnership of pri-vate equity firms Permira and more latterlySVG Capital with CAN (formerly



organisation is almost entirely funded by one person or a small group of people: “In that situation,there does not seem to be anything inherently wrong with that donor completely dictating whathappens. Of course, that may not be the best thing from the point of view of artistic vibrancy, andyou might struggle to find a good artistic director who was happy with that level of control by adonor, but there is nothing wrong with it in theory.” He does not believe that this would arise veryoften because for most donors: “The attraction of a small organisation is the sense of involvementone has, rather than the level of control one can exert.”

CAN/Breakthrough

CAN (formerly CommunityAction Network) is a socialenterprise practitioner network,which together with privateequity firm Permira, launchedBreakthrough. Breakthrough isa fund that invests in socialenterprises, leveraging the skillsand resource of Permira to helpsocial enterprises ‘scale up’ theiractivity. CAN helps to findsocial enterprises from acrossthe UK that are suitable for

Breakthrough investment.Once Breakthrough invests

in a social enterprise, Permirapartners and investment profes-sionals work closely with theinvestee company, helping it togrow and develop by offeringadvice and mentoring alongsidethe substantial financial supportthat comes from theBreakthrough funds. Only cer-tain enterprises are suitable forBreakthrough funding. Socialenterprises need to be at the

right stage of their develop-ment, ready to ‘scale up’ andable to properly exploit theincreased funding thatBreakthrough brings. The socialenterprises operate “like busi-nesses”, “they might be not-for-profit”, argues Permira, “butthey are run efficiently andeffectively, utilising the skillsand experience of Permira pro-fessionals to help them becomestronger and more successful.”Ian Sellars, a partner at

Building bridges

46

Permira, works with Law forAll, a social enterprise based inActon and Cambridge, whichdelivers high quality social wel-fare legal advice. What moti-vates him is the opportunity toapply business skills to a socialenterprise that was fulfilling animportant community role. Justas with the portfolio companiesat Permira, he is driven by“making it a success” – “Wewant to attach ourselves to aclear social desire but equally wewant it to make it work.”Breakthrough measures suc-

cess in many different ways. It isabout efficient use of money,but there are also specificbenchmarks for each company.For example, it might be num-ber of people trained or tonnesof furniture recycled: “Generallythere is no one magic solutionfor a social problem - it is differ-ent for each area. But it can bepossible to use business skills toattack a social issue as Law forAll has done, adapting a modelthat has worked in one area, towork in another, with specificidentification of the new area’sneeds and local characteristics.”The long-term plan for first

two Breakthrough funds is simi-lar to a private equity fund, butwithout the financial return. Ianexplains: “Although some of theorganisations we back will con-tinue to need funding, for us itis not just about the money, it isabout developing the businessand when we get to a pointwhere we feel we have done thatsuccessfully, then probably thefunding should stop. We shouldsuggest other ways of raising

money and we should select anew enterprise to develop.”Ian also highlights how

much Breakthrough is a part ofthe Permira culture: “It is justvery much a part of Permira, itis what Permira does and every-one knows about it, and every-one knows how we do it.”Denise Holle, CAN’s Social

Investment Director, thinks thatthe Breakthrough investment inLaw for All and the relationshipbetween the Permira team andthe Law for All team has muchwider impact and potential:“Two Permira staff have sup-ported this social enterprise fornearly three years. The generali-ties of this relationship arereplicable, and there is widersocial impact both in terms ofinspiring other Permira staff andpartners, as well as the Law forAll staff and customers whobenefit. Social enterprises likeLaw for All really value theopportunity to work withPermira, and I know Permirafeels the same way.”Adele Blakebrough, former

chief executive of CAN andchair of the Breakthrough advi-sory panel, is enthusiastic aboutthe ongoing effect ofBreakthrough and the impor-tance of such models: “Thisself-sustaining business modelhas become a vibrant part ofour enterprise culture. Permira’sbusiness-like approach to gener-ating social change makes it anattractive investment for agrowing number of venture phi-lanthropists.”Adele is tireless in her work

as a broker between business

and social enterprises andbelieves that despite the veryspecific needs of individual grassroots organisations, the generalmodel can be replicated againand again to great effect. Sheconcludes that this is one of thekey motivators for those fromthe business community whoare motivated enough to volun-teer their time and skills: “Thething that really gets the team atPermira excited is making a pos-itive impact on society. So thepitch is always, this solution isgreat for this social problem,and if you support it and it issuccessful, it can be replicated.”Adele summarises her view

of community when it comes tophilanthropy and social invest-ment: “Community is eithercommunity of place or commu-nity of interest – so that isneighbourhood, geographicallocation or community of inter-est of any sort, all of which areequally valid and importantwhen it comes to philanthropyor social investment.”But she has concerns about

the over-use of the word com-munity and the fact it can meandifferent things to different peo-ple. She explains why she prefersthe word society: “Every time Iam about to use the word com-munity, I like to substitute itwith ‘society’. Some philanthro-pists feel they ought to make acontribution to ‘society’ and forbusiness people that society isoften global because that is theworld they work in, but theyalso understand that they live inthe UK or somewhere wherethey make their money.”

Community Action Network) was estab-lished specifically to allow private equityprofessionals to apply their skills to “invest-ments” in the social sector. This approach,which views charities and social enterprisesas investments in need of the capital andadvice required for sustainable growth, isoften called venture philanthropy. Businessentrepreneurs engage with social entrepre-neurs to bring about effective and efficientchange. Together they form a communityunited by purpose – the use of skills to deliv-er an end goal.Permira says, of its breakthrough fund col-

laboration with CAN: “They organisations

we are working with might be not-for-profit,but they are run efficiently and effectively,utilising the skills and experience of Permiraprofessionals to help them become strongerand more successful.” Similarly, Shaks Gosh,CEO of the Private Equity Foundation(PEF) that set out with the ambition of cre-ating a collaborative, industry-wide philan-thropy vehicle, explained: “We form SWOTteams, with a private equity person in chargeas the deal captain.” Although this approachdoes not suit all charities, it can bring aboutdramatic changes for those that it does.(There has been much debate about howwidely the “social return on investment”



The Private Equity

Foundation

The Private EquityFoundation is backed by over70 private equity firms andtheir advisers (banks, lawfirms, consultants, recruit-ment agencies and accountan-cy firms) who have cometogether to create a charitablefoundation that representstheir industry. They are unit-ed in their desire to empoweryoung people to reach theirfull potential and all of theparticipant organisationsinvest both their money andtheir time through PEF tocharities that address thisissue. Sir David Walker,author of the 2007 report onUK private equity, hasexpressed how he sees the roleof PEF: “As the private equityindustry takes its place in theBritish business community itneeds a voice – that’s theBVCA – and it needs a con-science – that’s the PrivateEquity Foundation.”

When established in 2006,despite the prevailing criticismof the private equity industryfrom the public, trade unionsand government, PEF washailed as a milestone in phil-anthropic collaboration. Itschairman, Ramez Sousou,CEO of TowerBrook CapitalPartners, was adamant that itsorigins predated the attacks onprivate equity. Its ambitionsare to create a collaborative,industry-wide philanthropyvehicle committed to realsocial impact.Shaks Gosh, chief executive

of the foundation who comesfrom a non-profit background,said: “The original intention ofthe trustees was to create acommunity of like-mindeddonors. At least in the begin-ning, that was even moreimportant than the social mis-sion. They were all alreadydoing a lot philanthropically asindividuals, and the foundationwas not meant as a replacementfor this, but as a valuable addi-

tion. That has certainly beenborne out by our experience, asthe value of having a vehiclethat the private equity industrycan unite behind is enormous.”PEF recognises that this

community has the ability toraise large sums of money.Indeed, in its first year of oper-ation it raised an incredible£4.5 million in Europe and afurther $1.7 million for the USarm. Shaks recalls how, in theearly days, chairman RamezSousou challenged thefounders of PEF to think aboutmaking impact by collectivelyraising a significant sum, ini-tially targeted at a nationalchildren’s charity. “The inten-tion was to get people to actcollectively to drive socialchange. But as well as thatfocus on social change, PEF isalso about getting the privateequity industry into the mind-set of being intelligent donors.”Shaks admits that the notion ofcollaborative philanthropy wasnot always easy to sell: “At first

Building bridges

48

a lot of people had the attitudethat philanthropy is a personal,private matter. In the 18months I have been workingon this, though, I have seen areal change and now many ofthem are saying, ‘this is reallygood – we can achieve far moreif we work collectively and itmakes it much easier to getproperly engaged.’”Although the money is crit-

ically important, PEF believesthat its donor community alsohas a wealth of expertise andskills that can help to trans-form many of the charities inwhich it invests. Empoweringprivate equity professionalsand their advisers to put time,energy and skills into thesocial sector is part of PEF’smission. “We looked at whatprivate equity firms do in theirday-to-day business andpicked ten things that wehighlighted as the key ‘toolsand techniques’. We thenadapted these to use in ourcharitable work.” The termi-nology and techniques usedare familiar to the privateequity professionals who getinvolved, and so are the meth-ods. “We form SWOT teams,with a private equity person incharge as the ‘deal captain’,and then assemble a groupwith an accountant, a lawyer,a strategy consultant and soon. When we grant money toa charity, it is for three yearsand we also provide the chiefexecutive with the support ofthe team we have assembled,who can help with strategicplanning, financial manage-

ment or whatever is needed.Just like a business invest-ment, the idea is to work withthe charity to ensure that atthe end of the three yearswhen we exit, the charity is ina much better position interms of scale, finances orstrategic clarity than it waswhen we first got involved.”Shaks is certain that acting

as the broker that can enableprivate equity people to givemore than just money in aneffective way is useful both forthe donors and the recipientcharities. “Our donors find itreally useful to have someonewho can say ‘if you don’t justwant to give from the heart,but want to achieve realchange, then these are theorganisations to back and hereis how you can get involved.’We have donors who havebeen giving for 20 years ormore, but still come backfrom the first meeting we setup with a charity saying,‘that’s the first time I have everreally engaged with a charitylike that!’” This intermedia-tion role is crucial to bridgethe gap in experience andunderstanding that there canoften be between businesspeople and charities. It isoften difficult for donors tofind good small charities toback, and conversely it is hardfor many charities to reach outto these sorts of donors,because as Shaks points out:“They often cannot putresources into dealing with theparticular needs of these kindsof donors when they only

have limited funds availableand they dealing with some ofthe most in-need people in thecountry. That is where we canhelp charities, because we canremove that burden.”PEF’s aim of creating a com-

munity of socially responsibledonors in the private equityindustry means that it is awareof the need to inspire people toaction and to keep them going.Part of the way it does this is byremoving the barriers to gettinginvolved for busy professionalsin the industry, and enablingthem to engage in a way thatplays to their skills and is long-term. And the model has thepower to draw in those frombeyond the narrow privateequity community, as Shakspoints out: “The people in theteams we put together, not justthe private equity guys, but thelawyers, the consultants and soon, they really get involvedwith the charities in a heavilyengaged way because they areusing their business skills.” Aswell as engaging peoplethrough the head, PEF alsorecognises the importance ofengaging heart, and enablingpeople to see the effects of theirgiving. For instance, Shaksexplains that they organiseevents with the charities andprojects they fund: “One exam-ple is a community centre inNewham that we have helpedto fund. We are organising aday when our donors can comealong to see the work that hasbeen done.” And this doesn’tjust help people see the workdone by the particular charities

approach that venture philanthropy oftendemands can be applied because many char-itable outputs cannot be easily measured.)Neither Breakthrough nor PEF is operat-

ing in a specific community of place butboth are communities of individuals boundby their desire to be an agent of change andwith the talent to do so. Such an approachmeans that they naturally operate at locallevel. It is their skills and their access toother skills through business networks thatallow them to achieve their goals.David Blood, co-founder of sustainable

investment company Generation Invest-ment, is motivated in his personal and pro-fessional life by his ability to use his skillsfor change: “My vision was, and still is,that maybe we can move away from the

model of half your life, or whatever pro-portion, being commercial and some of itnot-for-profit. What if you actually com-bined them – is that possible? And this isin some respects what Generation is tryingto do.”45 Angus MacDonald’s focus onrural poverty in Scotland has also beenpartly motivated by the desire to apply amethod for achieving the change he wantsto see: “My major criterion is to find a ven-ture philanthropy approach which is basi-cally delivering outcomes through encour-aging entrepreneurship in rural Scotland.”The social investment market is an

emerging market which uses investmentpractices traditionally used in the private sec-tor to provide capital and financial supportfor charities and social enterprises. It is prov-



45 David Blood was interviewed

for our last report, Give and let

give, published in December

2007. This quote is part of the

profile in that report.

PEF funds, Shaks thinks, butalso gives people a wider per-spective on their community:“Many of the donors we takealong will probably never havebeen to Newham, so it is notonly a chance for them to seethe work that is going on, butalso gives them a glimpse of aside of London that they per-haps have not seen before.”PEF so far has supported

mainly small, community-based organisations, usuallywith a turnover of below £5million, but this could change.“The purpose of PEF is to

address the problem of youngpeople not in education,employment or training, andnot to create great charities forthe sake of it. We will supportwhichever organisations wethink can best help us achieveour goal, regardless of theirsize.” She recognises that thechoice between supportingsmall charities and larger onescan be difficult: “There is oftena conflict between the desire towork with smaller organisationswhere you can have a greaterimpact, and the desire to workwith larger organisations where

you can have a wider impact.In the future, we will probablyhave a mixture of the two inour portfolio.” Shaks also seespart of PEF’s strategy as usingthe greater impact it can haveon smaller organisations to helpthem expand and achieve widerimpact: “The hope is that inthree years’ time, the organisa-tions we are working with willbe reaching two to three timesas many people, and hopefullynationwide. We really want toscale up the examples of bestpractice that we have rigorouslytested.”

Venturesome

Venturesome is an intermediarythat provides its donors withthe opportunity to participatein the innovative social invest-ment market. These donorscould not participate in thismarket on their own, and

require the expertise, processand infrastructure provided byVenturesome.John Kingston, who found-

ed Venturesome, says: “Thosewho have participated in thefund could not have done so ontheir own because of the high

transaction costs involved in ourdeals and the portfolio approachrequired to invest effectively.However, I establishedVenturesome with a view tostimulating a social investmentmarket and it would be over-stating my aims if I said that I

ing attractive to philanthropists who arekeen to see the skills and practices which cre-ated their wealth in the private sector adapt-ed for the charitable sector. Venturesome(49) is a social investment fund that pro-vides capital to civil society organisations. Itis an example of an intermediary that com-bines mainstream lending and investmentpractice in the charitable and social sector. Athird of the capital is provided by individualphilanthropists, who are attracted by thepotential for building a social investmentmarket. John Kingston, founder ofVenturesome, said: “As an intermediary,Venturesome has brought together a rangeof investors who can achieve somethingtogether which they could not achieve alone.Intermediaries have a crucial role to play indeveloping donor or investor communities

united by their purpose, in this case to builda social investment market.”Retail bank Triodos, an ethical bank that

offers savings accounts and investments anduses its finances only for projects with socialand environmental benefits, believes that itscustomers are attracted by its ability to con-nect them with improving their communi-ty. Triodos uses depositors’ money to lend tosocial projects and businesses. WhitniThomas, an investment manager in theTriodos venture capital division, said: “Ithink that connection within a communityis one of the main reasons why people comeand put their savings with Triodos. We tellpeople whom we lend their money to,because they want to know and feel con-nected to, say, an organic farm in theMidlands or a turbine up near Lancaster

Building bridges

50

also had the specific intentionof creating a specialist commu-nity of investors, even thoughthat is what has emerged.”John founded Venturesome

in 2001 after a career that hadspanned the private and chari-table sectors. It is a high-riskfund that identifies and servesthe unmet capital needs ofsmall and medium-size chari-ties and social purpose organi-sations. It uses risk capital toexplore new approaches tofinancing these organisations,operating in the space betweenproviders of traditional chari-table grants and providers ofbank loans at market rates. Itcarefully balances financial riskwith social impact. Themoney is recycled once repaidin order to achieve moreimpact. Since its launch, thefund has made 170 commit-ments, worth £10 million, ofwhich £4.9 million has already

been recycled, with losses ofonly about 5%.The Venturesome

Investment Fund is now £7.8million, supported by a mixtureof, grant-making trusts, banksand generous individuals. Itsparent, Charities AidFoundation, is its biggest sup-porter having provided the ini-tial backing for the fund in2001. The funding structure isas follows:

� Charities Aid Foundation:£2.8 million / 37%

� Private individuals£2.2 million / 29%

� Grant making trusts£1.2 million / 17%

� Banks£1.4 million / 18%

The five private individualswho have invested inVenturesome are all from thefinancial services sector, recog-

nising the power of the invest-ment and efficient use of capi-tal in the charitable sector. Thisenlightened group of investorsis physically brought togetherby Venturesome every yearwhich helps to motivate themand establish them as a special-ist community of donors sup-porting social investment.Despite the fact that John

says the investor communitythat has evolved in support ofVenturesome as an intermediarywas unintentional, it is an inter-esting example of the potentialfor intermediaries in the futureas new investment models aredeveloped. John explained: “Asan intermediary, Venturesomehas brought together a range ofinvestors. Intermediaries have acrucial role to play in develop-ing donor or investor commu-nities united by their purpose,in this case to build a socialinvestment market.”

which their deposit is being used to support.I think that sense of community, of feelingmore directly connected with the recipientsof their money, is one of the main reasonsthat people bank with us.”Both Venturesome and Triodos are, in

their different ways, investment clubs. Theinvestors in Venturesome’s case and deposi-tors and clients in Triodos’ case are provid-ing the capital to be used for social changeand they are all achieving more as a groupthan they could alone. This notion ofachieving more as a group is an importantdevelopment for the growth of philanthro-py and social investment in Britain. Like-minded peer networks made up of individ-uals with the same skills sets will be criticalvehicles for delivering funds and expertise tocharities and social benefit enterprises.Shaks Gosh (47) said of PEF: “The originalintention of the trustees was to create acommunity of like-minded donors. At leastin the beginning, that was even moreimportant than the social mission. Theywere all already doing a lot philanthropical-ly as individuals, and the foundation wasnot meant as a replacement for this, but as avaluable addition. That has certainly beenborne out by our experience, as the value ofhaving a vehicle that the private equityindustry can unite behind is enormous.”

3.2.2 Donor communitiesBeing part of a defined donor communitycreates a peer network that can be highlyeffective in motivating philanthropists tostart their journey as well as creating aframework which assists them to continuealong it. Most people start giving becausethey are asked by a peer to give to some-thing they are involved in. This peer pres-sure is also an important element in keep-ing philanthropists going. Michael Hintze(42) reminded us: “Giving to a cause or anorganisation can broaden the net and builda peer network of donors. There are friendsand colleagues who sometimes supportwhat I do and I sometimes support what

they do.” Joining with peers reduces therisk of getting it wrong in the early daysand allows people to learn in a safe envi-ronment before branching out on theirown. In this way donor communities canact as philanthropy “incubators” and cando so at all levels of giving. There is also animportant role for intermediaries, expertsand inspired leaders to develop both for-mal and informal giving circles and donorcommunities that provide an infrastruc-ture, a network of peers, and above all,confidence, to individuals starting out ontheir philanthropy journey.Private banks have unparalleled access

to significant numbers of high net worthindividuals and tend to have unique andstrong relationships with their clientswhich are an excellent starting point forbuilding donor communities and encour-aging philanthropy. Alexander Hoare ofprivate bank C. Hoare & Co said: “I thinkHoare’s should have a donor advised fundfor its several hundred customers.” Couttsprivate bank has recently established twothemed donor advised funds – on theenvironment and on microfinance – thatallow clients to club together and eithertake the advice on the topic and then con-duct their philanthropy themselves orinvest through the fund as a group. TheseCoutts funds are being launched inresponse to direct requests from clients forsuch a product. Mark Evans, head of fam-ily business and philanthropy at privatebank Coutts, said: “Although clients areshowing equal interest in theMicrofinance and Environment AdvisoryServices and Donor Advised Funds, theDonor Advised Funds are attracting mostattention. In addition to market informa-tion and signposting, clients are sayingthey want the opportunity of learningfrom each other as well as being able topool their resources to increase the impactof their giving.” The new Coutts productspoint to the role of defined communitiesin keeping philanthropists going on their



journey as well as providing the frame-work for motivating them to take the firststep.Some of the Community Foundations

are working to form donor communitiesaround their products. Katherine Barber,director of Capital Community Found-ation said: “One of the key factors in oursuccess, in addition to leadership, is goingto be about putting the donor experienceand the causes they can support at the fore-front. From this, flows the service andproducts we offer, the way we communi-cate impact and the environment in whichour donors are invited to operate.Historically the drivers came from the vol-untary sector. We need drivers from theCity. We need to create a donor base withsome super-high net worth individuals to

act as leaders to others who are keen to giveat a less substantial level.”There are informal ways of creating

donor communities and peer groups too.Individuals such as Nick Ferguson (16)have done it without really intending to.He said: “As people get to know aboutwhat we do, they come to me and they say:‘We would like to do something in Argyll,can we come in alongside you?’ So despitetaking our time to understand the needs inArgyll, to define our purpose, to identifythe right organisation and our efforts tostay below the radar, we are creating some-thing of a following.”

3.2.3 Giving circlesThe communities and networks describedabove are all what Bearman and Rutnik

Building bridges

52

Rosa, UK Women’s Fund

launched by Maggie

Baxter (www.rosauk.org)

Rosa is the first UK-widewomen’s fund and its founderMaggie Baxter believes it couldbe “potentially revolutionary”as a body that is “the onlyexclusive advocate and funderof organisations working withwomen and girls throughoutthe UK.” Maggie was grantsdirector at Comic Relief formany years and then directorof Womankind Worldwide,where she became convincedthat women were the mostlikely people to fill the hugegap in funding of women’sprojects. Rosa was launched inspring 2008 to “championwomen and invest in initiativesto tackle the problems womenand girls still face in the UK.”Specifically Rosa is a phil-

anthropic fund dedicated to

supporting women’s charitableinitiatives across the UK. Oneof Rosa’s core aims is to pro-mote philanthropy by womenas well as for women. It aimsto create solidarity amongwomen, to develop a “sister-hood” that gives them thecourage and confidence toinfluence change for womenthrough their giving. Rosa’sfirst online campaign,Celebrate Her, encouragesdonors to dedicate their gift toan inspirational woman intheir lives. Maggie explainsthat getting more womeninvolved in philanthropy is akey motivation for her: “Iwant it to be new money froma giving circle of new womendonors. I do not want to justtake existing charitable fundsand grant them on.”The philanthropic funds

raised will be spent on grants,

research and influence onwomen’s issues. The grant-giv-ing will be backed up bystrong, evidence-basedresearch in four areas: safety,economic justice, health andwellbeing, and equal represen-tation. Through its grants andresearch, Rosa wants toencourage policymakers andlarge trusts and foundations tomake women’s issues a priori-ty. Maggie explains her vision:“Rosa will have opinion andinfluence; she will be wise,committed, determined, a lit-tle bit sassy and a little bitnaughty.”Through her extensive net-

works Maggie has raised corefunding for the first threeyears and a significant propor-tion of funding for grant-giv-ing, research and influence onwomen’s issues. She hopesRosa will award about

would call “shared giving” in contrast togiving vehicles.46 Giving circles are groupsof individuals who come together, pooltheir financial contributions and deter-mine where to donate or invest theirmoney and/or their time. They learnabout the cause, the community theydecide to support and about philanthropy.All giving circles have their own character-istics. Some are very small, others verylarge. Some are very exclusive, othershighly inclusive. Some are focused on sup-porting a geographical area, others on aspecific issue; some do not have a desig-nated target area or cause for their funds,but are defined by the type of person whois eligible to join them. Anyone can start agiving circle, although it will need a hostfor holding bank accounts and enablingappropriate tax deductions – to get roundthis administrative difficulty many circles

are hosted by an existing charitable organ-isation.47

Research into giving circles in Americaconcluded that they “promote collectivelearning, decision-making and giving.They build community by rallying indi-viduals who, over the course of their worktogether, have meaningful conversationsand make real-world decisions. Throughgiving circles, donors learn more aboutcommunity issues and become deeplyinvolved in non-profit organisations theymay never know existed.”48 The averagedonation level per year was $2,809 and themost common donation level was$1,000.49 Not all circles have a definedcontribution level. Those that do will notwant to set contributions at a level thatwould exclude potential members, particu-larly since giving circles are often seen as away of democratising philanthropy.



£400,000 in small grants atgrassroots level each year: “Wedo not need to be big, weneed to be strategic. We donot need £50 million to makea statement. We need to usesmall amounts of money wellto have influence. Rosa will donew and sometimes wackythings, some of which will fail– which is fine if others aresuccessful enough.”Maggie’s confidence in

women is unwavering:“Women are the ones whokeep families together, care forfamilies, educate families andkeep war out of communi-ties.” All her years atWomankind Worldwide havetaught her that “if youempower women, youempower an awful lot of otherthings to happen.” She is alsoconfident that the money can

be used in the most effectivemanner: “Women can achievean awful lot with £500.”She is confident that the

UK is ready for such a fund.There are dozens of women’sfunds in the US and othersacross the world in India,Africa and elsewhere. Two ofthe best known are the US-based Global Fund for Womenand Mama Cash, establishedin the Netherlands in 1983.Mama Cash started as a groupof five wealthy women activein the women’s movementwho clubbed together to makegrants to women’s projects; itis now an important women’srights organisation.The response in the UK

since Rosa’s launch in spring2008 has been encouraging.Maggie notes: “I have alreadyhad a couple of calls from

corporates since the launchwho have said that this isexactly the kind of philan-thropic product they want forwomen employees and thatthey want to look at settingup women’s giving circles inthe company.”She is determined that Rosa

will not only encourage morewomen to engage in philanthro-py but will also advancewomen’s rights. She believes thetiming is right for both culturalshifts: “It was not at all cool tobe green until quite recentlyand that has turned around. Ithink the same could happenwith women’s issues; that itcould become cool for womento get involved with empower-ing other women.” Her ambi-tion for Rosa is quite clear: “Iwant her to be influential and achange-maker.”

46 Bearman J and Rutnik T,

Giving Together: A National Scan

of Giving Circles and Shared

Giving, Forum of Regional

Associations of Grantmakers,

2005

47 Bearman J, More Giving

Together: The Growth and

Impact of Giving Circles and

Shared Giving, Forum of

Regional Associations of

Grantmakers, 2007. It estimates

that 68% of US charitable

organisations host circles.

48 Bearman J, op cit. It put the

number of circles in the US in

2004 at 200 and the 77 that

were assessed in detail had

raised more than $44 million and

engaged more than 5,700

donors. The same research

process in 2006 put the number

of circles at over 400 and

assessed 160 in detail which

had granted more than $65 mil-

lion and engaged more than

11,700 donors.

49 Bearman J, op cit

The Philanthropy Workshop (TPW) isa programme designed to bring togetherexisting and potential philanthropists tolearn about strategic philanthropy, leader-ship development and collaborative prob-lem solving. It was founded by theRockefeller Foundation in 1995, and since2006 has been run by the Institute ofPhilanthropy in London. Those takingpart in TPW attend three modules, inLondon, New York and a developing coun-try. There is also an alumni network ofthose who have attended the workshop,and this has itself developed into a power-ful tool for shared learning about philan-thropy – both successes and mistakes.Dr Sal LaSpada, CEO of the Institute

for Philanthropy, said one of the mainreasons for establishing TPW was tobring philanthropists together. “Many ofthem voiced frustration at how isolatedthey felt because they did not feel theycould talk about their philanthropy withfriends. They longed for an environmentin which they could discuss it openly inthe knowledge that everyone else was inthe same position, so that is what we try

and provide.” This shared learning hasalready led to action: members of thealumni network have launched three col-laborative ventures – on youth justicepolicy development, on supporting thedevelopment of renewable energy proj-ects in the developing world and onencouraging pluralism by supportinghuman rights and civil society projects inPakistan. (The latter was set up by agroup who attended TPW in New Yorkon September 11, 2001. Having seen theterrorist attacks from the window of theoffice block they were in, they subse-quently decided to look for projects tofund that could address the root causes ofdisaffection and radicalisation in theMuslim world.)Alumni of the UK TPW, which started

in 2006, have already formed a groupspecifically to exchange information.Called the “agora”, from the ancientGreek word for marketplace, it meets inLondon four times a year. Sal LaSpadacommented: “The group in London isincredibly active and engaged. Their ener-gy and enthusiasm has meant that they

Building bridges

54

The Funding Network

(TFN)

Dr Frederick Mulder, founderof The Funding Network(TFN), explained his motiva-tion for setting it up as follows:“Most of the time when you arespending money you have waysof checking out whether whatyou are doing is wise, but whenyou are giving money it is oftenjust you and the organisationyou are giving to. So I had theidea that having a peer group ofpeople to check things out withwould be a good idea.”First, Fred got involved with

founding the Network for

Social Change in 1985. Thiswas set up as a giving circle ofdonors, each with wealth of atleast a quarter of a millionpounds of liquid assets. It wasintended to be a private groupbecause there was a mixture ofinherited and created wealthamong its members, leading todiffering attitudes about visibili-ty. But Fred had a differentlong-term vision, and in 2002set up TFN because he “reallywanted to take this idea of giv-ing with a peer group and put itmore into the public domain,where it was open to anyone ofany level of wealth, so there was

no barrier.” He also thoughtthat the new organisationshould not take a lot of people’stime, so he decided that TFNwould have day events ratherthan residential conferences,and should have a format thatcould be easily replicated inother communities.TFN has certainly been suc-

cessful in this regard: followingthe initial events in London,TFN groups have now been setup in Bristol, Leeds, Scotland,Oxford, Toronto, andJohannesburg. The most recentTFN event in London raisedover £130,000 for the six organ-



isations invited to make presen-tations. And recently Youth –The Funding Network (YTFN)has been established in London,based on the original TFNmodel but aimed at attractingdonors under 30. Its first eventin June 2008 attracted 140young professionals between 20and 30 years old and raised over£6,000 for the nominatedorganisations, as well as promis-es of help with website designand pledges to undertakefundraising activities such as asponsored parachute jump.The main focus of its work

is the events it holds – aroundfive a year in London andslightly fewer elsewhere – whichbring together TFN membersand give them the opportunityto hear presentations by a hand-ful of organisations before tak-ing part in an “open outcry”bidding session where they canpledge donations to thoseorganisations.The organisations that are

invited to make presentations atan event are put forward byTFN members. Fred explained:“They have to put in a two-page application covering cer-tain points six weeks before theevent. Then we have a selectionpanel that any member can siton, unless they are sponsoring aproject at that event…We usu-ally have, say, three, four, fivetimes as many applications aswe have slots for. So there is alot of competition to get aplace.”The focus of the organisa-

tions tends to vary dependingon the location of the TFN

network. Fred explained thatnetworks outside London“tend to favour organisationsthat work in their local com-munity, or even if they areinternational in focus, theyhave roots in the local commu-nity somehow, so they proba-bly do more to foster a localsense of community.” In theoriginal, London-based TFNnetwork, the balance is abouthalf-and-half local to interna-tional, although even then Fredpoints out, “a lot of the localthings have some sort ofnational dimension.” He is notcertain why the London TFNhas less of a local aspect, butsuggests that it might be partlybecause “there are more inter-national organisations based inLondon” and also because“people in London just do nothave a great sense of communi-ty on the whole.” Although hedoes think there is furtherpotential for local giving inLondon because “people loveto support local organisationswhen they can. It is great whenlocal organisations find a wayof tapping into the money thatmay only be a mile awaybecause too often that canseem a big mile.” There areindications that this trendmight be starting to take hold– at the most recent TFNevent in London over half themoney raised was pledged totwo organisations focused onthe needs of disadvantagedyoung people in London.Fred said that there is no set

limit on donations – “there arepeople giving £100 or people

giving several thousand andthere are people all the way inbetween” – although mostdonations “are clustered aroundthe £100 to £300 mark.” He issure that this is one of theadvantages of giving commu-nally: “You know that at what-ever level you are giving, you aresomewhere on a continuumwith other people. That is veryreassuring, because I think a lotof people do not give becausethey are not sure if they arebeing overly generous or overlymean. They do not know what’sappropriate.”The members of TFN, Fred

thinks, fall into roughly fourcategories: those at the start oftheir “philanthropy career” whoare dipping their toe; those whosimply like communal giving asthe way of doing their philan-thropy; foundations which useTFN as a way of finding greatsmall projects; and some com-panies, which also use TFN as away of directing their corporategiving.One of the key features of

TFN, as with many giving cir-cles, is that its membership isconstantly changing. Fredexplained: “Some people loveus and leave us, or some peoplewill stay around and some willuse us to get to a certain stagebefore moving to somethingdifferent.” The crucial con-stant, though, is that unlikemany philanthropic organisa-tions, “we’re a network ofdonors – all the people on theboard give too, so we’re a com-munity of donors at variouslevels.”

have taken the lead in developing this ini-tiative.” According to Sal, it is only whenpeer groups and initiatives are developedby philanthropists themselves in this waythat they are successful: “It has to be driv-en by the donors and their interests. Ifthere was any sense that it was top-downor imposed from above, it simply wouldnot last.”Talk in Company (TIC) is an initiative

at the very informal end of the spectrum.It is an everyday, giving circle aimed atthe mass affluent in South London andlargely comprised of professional womenwho have taken time out to raise a fami-ly. Like the Rotary Clubs, it organisesmonthly lunch events with a high-profileguest speaker, as well as presentationsfrom charities and philanthropy experts,such as New Philanthropy Capital,TimeBank or the Institute forPhilanthropy. The events provide achance to hear directly from the peopleworking in charities, as well as a way tomeet like-minded people and to channelsome of the energy that they used to putinto their job toward something beyondthe daily domestic routine. FormerMerrill Lynch employee and TIC co-founder Deborah Davidson said: “We allrecognised this need to get together andfor once in a while to talk about some-thing other than schools, house pricesand kitchen extensions. We knew therewas this pool out there of bright, sparky,intelligent women who felt neglected.”

There is no pressure on attendees to give.The hope is that they will be impressedor inspired enough by what they haveseen and heard to follow up by them-selves. As well as encouraging potentialfuture donations, any profits from theevents are divided between a charity cho-sen by TIC and charities nominated bythe speakers. Another new initiative isUK Women’s Fund Rosa (52) started byMaggie Baxter which among other thingsaims to be a formal giving circle designedto create solidarity among women.The Funding Network (TFN) (54) pro-

vides a forum for getting people started ontheir journey. A number of charities areinvited to give a presentation and bid forthe support of the audience. It has no bar-rier to entry, is transparent, provides theinfrastructure for individuals to act andallows them to hear firsthand from a char-ity in a neutral environment with like-minded people. Dr Frederick Mulder, itsfounder, recounted that he had had “a badexperience” early on in his giving careerand thought that if there was a peer groupthat could check charities out, that wouldhelp giving enormously. Youth- TheFunding Network (YTFN), an offshoot ofTFN aimed specifically at under-30s, hasalso been a huge success.

3.2.4 Web 2.0Online giving has increased dramatically.The UK website, justgiving.com, brokethrough the £250 million mark for its

Building bridges

56

GlobalGiving,

www.globalgiving.co.uk

“A marketplace for good-ness” is how theGlobalGiving websitedescribes itself. The newGlobalGiving UK ChiefExecutive, Sharath Jeevan,explains it as a site “which

aims to provide psychologicalassistance to guide an indi-vidual through their givingdecision and to support themin their choice of what to doand how to do it.” The siteenables donors to browse forways to support internationaldevelopment projects around

the world, to select thosewhich inspire their passionand to support them with afinancial donation online.It was set up in the US in

2001 and launched in theUK in September 2008. It isa market place connecting“donors to doers” and has

4,800 charity members this year and glob-al online giving passed $13.2 billion. Inthe US, online giving rose 51% between2005 and 2007 to reach US$6.9 billion.50

However, at the community level manyexcellent projects remain below the radar

and cannot be found online. The launch oflocalgiving.com (59) next year will enableindividuals to search for projects by geo-graphical location and by issue, to set uptheir own donor profile, and to monitortheir gifts and the effect they are having.



50 Reported in ePhilanthropy.org

and based on research by the

ePhilanthropy Foundation.

facilitated $10 million indonations to some of the 450pre-screened grassroots projectsin over 100 countries that areprofiled on the website. Theaim is to connect what thewebsite calls “generous giverpeople” with “good idea peo-ple”. It explains:“GlobalGiving begins withthe dedicated, tenacious indi-viduals who are drivingchange in their communities.From running orphanagesand schools, to helping sur-vivors of natural disasters,

these people are do-goodersto the core.”It is targeted at the mass

retail market since it is a rela-tively low-cost way to aggre-gate lots of small gifts.Anonymity is important, how-ever, and Global Giving doesnot pass on donor details tothe charities themselves. Inthis way it protects the donorfrom the inevitable tide offunding requests once the firstgift has been made.It also provides an online

networking function for

donors. Some companies havea special arrangement withGlobalGiving which providesthem with the framework foran online donor communityto evolve within the company,supported by the company’sscheme for matching dona-tions. In the US, 15 compa-nies have already signed upincluding Ford, Gap,Hewlett-Packard, the NorthFace and Yahoo!,GlobalGiving also performsthis function for communityand family foundations.

Kiva, www.kiva.orgThis US-based web resourcecalls itself “a person-to-personmicrolending website, empow-ering individuals to lend direct-ly to unique entrepreneurs inthe developing world.” Its mis-sion is “to connect peoplethrough lending for the sake ofalleviating poverty.” It has cre-ated and connected a commu-nity of individuals who provideinterest free loans to specificsocial entrepreneurs in develop-ing countries. The focus is onthe individual to individualrelationship with phrases suchas “helping a real person” usedthroughout the site.A recent article in Forbes

referred to it as mixing “the

entrepreneurial daring ofGoogle with the do-gooderethos of Bono.” The same arti-cle notes that Kiva “merge[s]two recent socioeconomictrends –social networking andmicrofinance.” Microfinancetries to improve the economiccondition of people in thedeveloping world by givingthem small loans instead ofdonations.The site encourages indi-

viduals to lend $25 or moreusing PayPal or a credit card.Kiva passes the funds on toone of the 100 microfinanceinstitutions (MFIs) it partnerswith, who distribute the loanto one of their entrepreneurs,often together with training or

other assistance. Kiva’s lendersaren’t allowed to charge inter-est on their loans, and Kivadoesn’t charge interest to theMFIs. But the MFIs do chargetheir developing-world bor-rowers.Over time the entrepre-

neur repays their loan viapayments and updates postedon Kiva. When a lender isrepaid, they can recycle theirfunds to another entrepre-neur, withdraw them or evendonate them to Kiva itself tohelp with its operationalexpenses. However, CEOMatt Flannery has admittedin the past that there was stilla significant amount of donoreducation to undertake since

The forums, blogs, instant chat andother facilities of Web 2.0 make it a pow-erful tool for community building. Arecent study of online philanthropy mar-kets declared that they “promise to trans-form both the quality and quantity ofresources for human development.”51

However, if it is to provide more than one-off online gifts and short-term relief it willhave to find a way of enabling users to dis-tinguish strong from weak projects, and tomeasure the effectiveness of their onlineinvestments. Kiva (57), a US-basedmicrolending web-based resource, has

Building bridges

58

many donors are not recy-cling the funds but leavingthem in their Kiva accountwhen they are repaid after thefirst loan.Kiva funds itself by asking

for voluntary contributions,somewhat like a tip, and gen-erally receives about 8 percent. So for every $1 millionraised, it receives $80,000 topay engineers and program-mers. Kiva makes the com-parison with eBay, saying onthe site: “Like eBay and otheronline marketplaces, Kivahopes that an online lendingplatform will let unproven,riskier, field partners build agreat reputation throughlong-term performance. Inthe process, they should beable to raise capital fromother sources beyond Kiva toserve more of the poor intheir area.” (Forbes recentlyreported that eBay’sMicroPlace launched in 2007was an imitation of Kiva.)Although Kiva’s founders

have recounted how much

resistance they met at thebeginning, in June 2008 anastonishing $34 million inloans have been made throughKiva since it was establishedin 2005 with a 97 per cent ofactive loans paid on time anda default rate of less than 1per cent. The site supportsaround 270,000 lenders whohave assisted approximately40,000 borrowers in 40 coun-tries. Kiva ranks first amongits peers in the US, accordingto Alexa.com traffic ranks(based on a combined meas-ure of page views and users).Almost 50 per cent of its traf-fic comes from the US. Only4.5 per cent of its trafficcomes from the UK, where itranks third behind JustGiving and Oxfam. It hasabout 25 staff and almost 400volunteers.It is rapidly creating a

global online community ofdonors who want to supportinternational aid and con-necting them with a commu-nity of Kiva entrepreneurs in

developing countries aroundthe world. There is already aKiva fellows’ programme thatprovides individual volun-teers with the opportunity towork directly with one of thepartner microfinance institu-tions overseas. A furtherrecent development has beenthe introduction of “lendingteams”. These are affinitygroups created amongst Kivausers, in which memberscontinue to give individuallybut have their donationscount towards the gifts ofthe group as the whole.Lending teams have beencreated so far amongst thoseof shared faith, alumni ofuniversities and inhabitantsof particular cities, and Kivabelieves that these canstrengthen their overall offer-ing: “One of the most pow-erful things about Kiva isour community of lenders.[Users] now have the optionto connect with otherlenders and make an impactas a team.”

Global Greengrants Fund,

www.greengrants.org

Global Greengrants Fund(GGF) provides small grantsto grassroots environmental

groups around the world. Itscore aim is “to bridge the gapbetween those who can offerfinancial support and grass-roots groups in developing

countries that can make effec-tive use of that support.”Global Greengrants aims toprovide a way of overcomingthe difficulty of finding the

51 Bonbright D, Kiryttopolou N

and Iversen N, Online

Philanthropy Markets: from ‘Feel

Good’ Giving to Effective Social

Investing, Keystone/The Aspen

Institute, 2008

become a beacon for other web entrepre-neurs. In a recent Newsweek article, KivaPresident Premal Shah explained that itallows all of Kiva’s 100 or so fellows dis-persed around 45 countries to “co-createKiva” by logging on to the Kiva Fellows’wiki (a platform for collaborative contentwhich can be accessed and adapted byeveryone involved) for ideas, best practiceand solutions to problems.52 GlobalGiving(56) launched in the UK in September,having been online in the US for five years,provides regular updated feedback on proj-

ects and direct contact with the overseasentrepreneur receiving the donation.Amnesty International UK has recentlylaunched an online community for itsProtect the Human campaign as part of astrategy to activate a community aroundthe campaign. Kate Allen, director ofAmnesty International UK, was reportedas saying: “Protectthehuman.com is allabout giving that community an onlinehome – somewhere people can share views,have an argument or tell others about afilm or story they have found.”



Localgiving.com

This is a new, web-basedresource designed to overcomethe barriers that philanthro-pists face in finding local proj-ects to support. It will profilethousands of charities andoffer the opportunity to make

an immediate online dona-tion. Marcelle Speller co-founded the www.holiday-rentals.co.uk which she andher partner sold in 2005. Herexperience setting up a suc-cessful business that enabledusers to find and book private-

ly-owned holiday propertieson the web has led her to setup localgiving.com to enabledonors to locate and donate toprojects in their area. She isdoing so in partnership withthe Community FoundationNetwork, whose 50-plus

right overseas organisations tosupport because “grassrootsgroups are key to solving theintractable problems of pover-ty, powerlessness and environ-mental destruction.”Over the past 12 years,

GGF has made over 3,500grants to organisations in 120different countries. Thesegrants are typically between$500 and $5,000. It relies ona network of over 120 interna-tional volunteer advisers,linked in a series of regionalboards and a global advisoryboard to select projects. Thisnetwork of advisers “has theadded benefit of building apeer community that can pro-vide moral support, mentoringand monitoring.” This aspect

of Global Greengrants’approach has become increas-ingly important. As itexplains: “Our adviser net-work is already beginning totake on a life of its own, driv-en by collaborative energy,great ideas and a shared visionof a healthy planet. Our advis-ers now actively seek eachother out to confer on issuesthat may cross continents oroceans. Our grantees, too, arelearning where to go for helpfrom groups dealing with sim-ilar challenges.”The Global Advisory Board

is comprised of representativesof five international groups,each of which has a differentfocus that overlaps with anarea of GGF’s work. This

means that these five organisa-tions can get funding to grass-roots projects that they mightotherwise struggle to reach;conversely Global Greengrantscan use the expertise of theseorganisations to expand therange of its activities.Building a viable and

vibrant community that isgeographically dispersed inthis way is only possible withthe internet. The foundersunderstand its power:“Communication technologiescan now make this dreampractical and relatively inex-pensive. Better use of thesetechnologies is our next fron-tier. We need to know eachother, learn from each otherand work together.”

52 Huang L, “Power to the bot-

tom”, Newsweek, 6 September

2008; www.newsweek.com/id

/157540

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member organisations acrossthe UK have vetted the morethan 40,000 small local chari-ties and community groupsthat will be featured on thesite.Given the constant com-

plaint from philanthropiststhat they cannot find projectsto support, this will be a valu-able resource for increasing“give where you live/work”philanthropy. Marcelle said:“It aims to attract individualdonors, corporate donors andadvisers, as well as charities,intermediaries, local govern-ment and others. It willincrease the awareness of anddonations to voluntary com-munity organisations by giv-ing them an effective webpresence and online commu-nications tools.”The site will allow users to

search by region or countyand/or by cause. Each charityprofiled is given a page onwhich it outlines its purpose,why its community needs it,specific projects for which it iscurrently seeking funding, keyfinancial information andphotographs and testimonials.A large “Donate Now” buttonmakes the closing process easyto negotiate and leaves thebrowser in no doubt of thesite’s intent.Marcelle knows the tricks

of the internet trade and thesite will be designed with tem-

plates to enable local charitiesto add their own detailsonline, while ensuring optimalpresentation and comparabili-ty of charities and projects.There will also be an advicecomponent as a way of creat-ing a community of donorsaround the site who can sharetheir experiences – both goodand bad – and recommenda-tions over the website.Community Foundations

are the key to this site as theyhold much of the basic infor-mation on local projects.Working in partnership withthe Community FoundationNetwork is crucial for the con-tent of the site. But theCommunity Foundationsrecognise that they stand togain from it too given thefunds it could generate andthe ability it could create forthem to establish importantguidelines across the networkfor consistency and compara-bility of data for communitiesof interest, not just communi-ties of place.Over time, the website will

form a national online databaseof charities and potentialdonors as well as the ability tomatch one to the other. It willalso enable charities andCommunity Foundations tomanage information, onlinecommunication systems andnetworking opportunities betterso as to improve operational

performance. It will also be aresource for potential benefici-aries of the local charities tofind the one that meets theirneeds. But, if requested, donorswill remain anonymous andprivacy requirements will alwaysbe honoured. Localgiving.com’smultiple functions make itunique and a significant stepforward in the use of the webfor philanthropy.Although the Charity

Commission website andguidestar.org.uk provideinformation on thousands ofUK charities, this is largelyfinancial and organisationaland is not always presented inan appealing way to donors,with an ability to donateimmediately through the sites.New giving initiatives such asthebiggive.org.uk and global-giving.com are importantweb-based initiatives fordeveloping online communi-ties of givers. The distinctionof localgiving.com will be itsability to allow people tosearch specifically for volun-tary and community groupsin a particular area that isimportant to them – wherethey live, work, or where theywere brought up – and thento refine their search to issuesthey are interested in; andabove all, due diligence willeven have been carried out onthe charities by theCommunity Foundations.

4Role of communitiesin continuing action

Embarking on a philanthropic journey isoften said to be the hardest step to take. It isusually the step from being reactive in giv-ing to determining a focus and having aplan. The communities that give individualsthe infrastructure and confidence to getstarted also play a crucial role in keepingthem interested and active, even encourag-ing them to expand their activities. Two ele-ments proved especially important: beingpart of a donor community of like-mindedpeople and giving at a grassroots level. Thefirst provides an enjoyable social network inaddition to a certain amount of peer pres-sure and a sense of risk management ratherthan going it alone. The second offers theopportunity for direct involvement andobservation of results. The relationshipbetween donor and recipient has to be care-fully managed at this level, but if successful,then the bridges built with charity workersand across social strata can bind hearts andminds more strongly to a cause.

4.1 EngagementMatthew Bowcock (34) who is active inhis home community encapsulated the sit-uation: “If you engage with a cause, thenyou find yourself not just creating newsocial networks but bridging social divides,which in turn strengthens the communityyou live in or work in. You are thenembedded as part of the strength of thatcommunity and it is very, very difficult towalk away.” The more a philanthropistactively does, the more he or she feelsengaged and a part of whatever they are

doing. This is self-perpetuating, a virtuouscircle. And the more a philanthropist feelsinvolved, the more he or she is likely togive in terms of financial support. It is par-ticularly important to engage the massaffluent in this way early on in their careersso that they expand their activities as theirearnings and skills increase.Michael Campbell (36) put it very sim-

ply: “I have undoubtedly given more moneyto the organisations I got involved with.” Itis the skills of these individuals that add somuch value to their investments of time andmoney. Naturally, the success or failure oftheir philanthropic endeavours has a signif-icant influence on the progression of theirjourney. Major successes are highly motivat-ing. Sir Peter Lampl set up a summer schoolbringing non-privileged young people toOxford University, his alma mater, for aweek. His practical effort to address socialexclusion on a small scale was hugely suc-cessful and evolved into the much moreambitious work of his foundation, theSutton Trust. This supports projects thatprovide educational opportunities foryoung people from non-privileged back-grounds and conducts research and policywork in this area too. Sir Peter said: “I hadno intention of doing this. It snowballedafter the summer school. I was still in pri-vate equity then and it was a new area offocus. Now…it is what I do full time.” TheSutton Trust has been a catalyst – not onlyhas Sir Peter recently attracted his peers andlarge foundations as donors, but now theGovernment also funds summer schools atmost universities.


Some philanthropists prefer to offer theirtime and skills to beneficiary organisationsrather than running their own show, but ifthey are still working hard their time will belimited. Entrepreneur Keith Punler said:“Many charities these days want people’stime as well as money and that is not alwayseasy for busy business people.” However,our interviewees told us time and again thatthe more they engaged, the more inspiredthey felt to continue. At the local level, thephilanthropist who gives time as well asmoney can avoid coming across as flash, andinstead be seen as forging links, then build-ing networks and social capital. In this waycommunity-level philanthropy can outdolarge-scale, faceless national or internationalphilanthropy by contributing Putnam’s“bridging social capital”.Guy Hands (40) believes there is a

two-way benefit to engagement: “It shows[my employees] that there is somethingbeyond doing the business which isimportant because it gives them a realconnection and a realism. It is very easy inthe City to get disconnected from society,yet understanding that society is multilay-ered is very, very important.” But he alsopoints out that it is not just his employeeswho benefit, but society as a whole if thepeople at the beneficiary charities recog-nise that Terra Firma employees are “notjust suit-wearing bean-counters, but havea human side as well.”

4.2 Peer influenceAll our interviewees confirmed the impor-tance of peer groups. As well as individualsasking their peers to join them in support-ing a cause or an organisation, there is animportant role for inspired leaders, expertsand intermediaries to develop formal andinformal giving circles and donor commu-nities. These not only provide the frame-work, network of peers and, perhaps mostimportantly, the confidence required to getstarted, but also provide it on an ongoing

basis. The Funding Network (54) wasstarted up by inspired individuals keen toprovide potential donors with a communi-ty of givers and reference points for howmuch to give. The new UKWomen’s FundRosa (52) was also the inspiration of anindividual, Maggie Baxter, and provides adifferent sort of infrastructure. It isdesigned as a formal giving circle specifi-cally intended to create a solidarity amongwomen, to develop a “sisterhood” to givethem confidence to improve women’s livesthrough their giving. Private banks haveunparalleled access to high net worth indi-viduals and tend to have unique and strongrelationships with their clients which arean excellent starting point for buildingdonor communities. The two donor-advised funds being launched by Coutts –on the environment and microfinance asdescribed in section 3 – that allow clientsto club together and either take the adviceon the topic and then conduct their phi-lanthropy themselves or “invest” throughthe fund as a group are examples of whatprivate banks can offer.The potential power of web 2.0, through

reporting, feedback and “chat”, in generat-ing online communities for philanthropy isimmense. Web-based forums such aswww.kiva.org (57) and globalgiving.co.uk(56) that unite those wishing to supportsocial entrepreneurs in developing countriesare increasingly important not only for get-ting individuals started but for providing thepeer group that influences them to keepgoing.

4.3 “Touch”Successful business people who like to havean element of control over their giving alsoappreciate being physically close to theprojects and organisations they areinvolved with – what we call “touch”. GuyHands noted: “If you cannot see theimpact, it is very difficult for a business-man to give. A community charity may

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not always have the advantage of scale, butit does have the advantage of closeness andbeing able to demonstrate firsthand what itdoes.” Michael Hintze (42), who runs hisown foundation, said: “We do like to seewhat is going on so there is an element ofmarket place.” One private equity partnerechoed the sentiment of many colleagues:“Most things are easier to understand ifyou can touch them and feel them. If youcan meet the people either doing the workor benefiting from the work, it makes itreal. One of the biggest problems withdonating money is that often you have nosense of ownership or touch. The humantouch is a very strong feeling. If you cannottouch something, there is a risk it does notexist and it is much easier to engender thatfeeling if that thing is in striking distance.”A number of those we interviewed also

cited “touch” as the reason that they focusedtheir philanthropy on community andgrassroots organisations, rather than onnational or international charities.Alexander Hoare (19) explained: “You canhave more confidence about where yourmoney is going with a local initiative andyou have more visible feedback. We alsogive to big charities, but on the whole we aremore minded to give to things where youcan feel you are making a difference and canbe confident the money is being spent wellbecause you can see the effects.” It is notalways the geographic focus of the organisa-tion that appeals, though – the size of theorganisation is a key factor. Martin Smithsaid: “The difference between big charitiesand grassroots ones is like the differencebetween backing venture capital start-ups orbuying FTSE 100 shares on the stockexchange – both are legitimate activities butthe latter has never really appealed to me. Ihave been more interested in the start-up,venture capital end of things.”Many enjoyed the feeling that they

were able to have greater impact withsmaller sums than if they were to supporta bigger charity. Michael Oglesby (18)

explained that he finds giving grants of£10,000-£20,000 to small organisationsthe most rewarding: “Not only can you beconfident that your money is having agreater effect, but you can really see thateffect as the outcome of your giving isright on your doorstep. For a businessmanlike me being able to see that my cash ismaking a visible difference is incrediblyappealing.” Nick Ferguson (16) agreed:“Although the amounts we are givingaway are not unappreciable, I feel theywould not make a dent in the big chari-ties. Whereas if we give that money tosmall organisations up in the Highlands itmakes a huge difference because so fewpeople are really funding up there.”Others echoed that size isn’t everything

and that much can be achieved with a lit-tle if donated the right way to the rightorganisation. Alexander Hoare (19) said;“I am not the Prime Minister – I do nothave unlimited sums. I have got smallsums, so I target them to people andorganisations doing good work locally.”Maggie Baxter (52) said: “We do not needto be big, we need to be strategic. We donot need £50 million to make a statement.We need to use small amounts of moneywell to have influence…Women canachieve an awful lot with £500.”The publicity given to the large sums of

money raised by the super HNWs atevents such as the ARK dinner or throughthe hedge fund, the Children’s InvestmentFund may be distancing the mass affluentfrom philanthropy since they could nevergive on this scale. Guy Hands said: “Formost people in society, a £1,000 gift is anenormous amount of money and so to hearthat someone in the City has given £5 mil-lion or £10 million does not really registerin the same way. It is impossible for mostpeople to visualise that sort of money, sothey hear it, but then it is gone. By con-trast, meeting someone and seeing thatperson is willing to give some time is prob-ably more effective in building bridges.”


Role of communities in continuing action

4.4 Managing riskSeveral philanthropists highlighted thatthey felt a greater degree of reputationalrisk with their involvement in projects ororganisations especially if they were physi-cally close to their home. It was as if theytry harder with those projects because theydo not want to be attached to a failed proj-ect in their community. Michael Hintze(42) was honest about how he feels abouthis reputation with regard to his support ofthe Wandsworth Museum: “I will try myutmost to make this work and that is part-ly because it is on my doorstep and part ofa community in which I feel very embed-ded and partly because my reputation is onthe line!”Being part of a donor community

appears to be an important way of spread-ing the risk associated with investing inphilanthropic projects. Our intervieweesusually avoid funding 100% of a projectand confine themselves to a 20-25% stakeboth to spread the risk and also to ensurethat the recipient does not become com-pletely dependent on them. Nick Fergusonexplained: “We have a rule that we willnever fund more than a third of anything,and usually only about 20%. If you fundeverything yourself and it does not work,then you can find yourself in a real holesuch as closing down a charity. Andbesides, it is unhealthy for an organisationto have a single funder.”

Acting together with peers and friendsalso encourages shared learning about dif-ferent causes and about different approach-es to philanthropy. We noticed that manyof our interviewees conduct carefulresearch and take time to understand theissues they want to address. Nick Ferguson

(16) said: “Part of the reason we are doingour philanthropy very carefully is becauseit is like any other form of investment: ifyou do it in a hurry you will get it wrong.”Another private equity professional said:“It is incredibly difficult to find a companyto invest in, to turn around, make a suc-cess, improve and sell within five yearswith a return which is commensurate withwhat we have promised our investors. Youcannot just snap your fingers and make ithappen. Similarly, it is not easy to find acharity to give a million pounds over fouryears and be sure it is going to make a dif-ference – and if you get it wrong the mag-nitude of your mistake is that muchgreater.”Using an intermediary can be a great

help in finding good grassroots projects,and they also offer the donor the benefitof being able to research and vet localprojects, mitigating the risk of supportinga failure. Michael Campbell (36) said ofCommunity Foundations: “If you aretalking to a voluntary group doing innova-tive things in a small village somewhere,you have no idea whether they are valid ornot, regardless of how good they mayseem on the surface. So at this level youreally do need an intermediary to makesure that your money is going to be spentwisely.” Angus MacDonald echoed this:“The Scottish Community Foundationhelps me to find, assess and monitor effec-tive projects. It is a special skill givingaway money and it is not a skill I have. Ifsomebody on one of the islands came tome and asked for money for some diag-nostic equipment to measure the perform-ance of outboard motors, how would Iknow whether he was going to disappearto the Bahamas with that money or not?”Entrepreneur Keith Punler said of usingthe Scottish Community Foundation: “Itremoves the risk of getting involved withsomething very close to home where weare quite visible and that could end upbeing a mistake.”

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“ Philanthropy is like any other form of investment: if youdo it in a hurry you will get it wrong”Nick Ferguson

4.5 Providing feedbackIn recent years increasing attention hasbeen given to measuring the performanceof charities and to improving the quality ofreporting to their donors, though howmuch information donors really want is amatter of debate. David Gold commented:“I think there should be better measure-ment around outcomes but not outputs.Human capital is very precious, people areprecious. It is easier to measure financialreturn than return on human capital.”Nevertheless those interviewed for bothour reports confirmed that hearing howand with what effect their money had beenspent was vital for keeping them involved.If not, they were much more likely to giveup or turn their attention elsewhere.Philanthropists who were active in a local

community had much lower requirementsin terms of reporting than those who werenot. Michael Head (21) in Kent said: “Iwant to go and look. I don’t want to listen tosomeone talking to me for half an hour, Ican tell in ten seconds for myself. Forinstance, when I walk into school assemblyat the Spires Academy, I can just see the dif-ference immediately.” Michael Campbell(36) said that he did not expect too much:“Most of these organisations probably havea twice-yearly newsletter or something likethat, and I think that is enough to refreshyour interest. You see it and think, ‘Are theydoing that? I might give them a ring.’”Angus MacDonald said of his attitude tofeedback, “I think it was Carnegie or some-one like that who said, ‘all I want is to beinvited for a cup of tea – I may not be ableto come, but I would like to be invited.’ AndI think charities should realise that theywould do much better second time round ifthey have engaged the donor first timeround.”Experts in the sector confirmed this.

Stephen Hammersley, CEO of theCommunity Foundation Network told us:“We find that with many of the individualswho do their philanthropy with us, they just

want to know that a charity is good at whatit is doing, often they want to meet the keyplayers, and then they want to keep thingsas simple as possible. They do not ask forspreadsheets and analytical reports, they justwant to know that the charity is doing goodwork in as simple a way as possible.”Katherine Barber, director of CapitalCommunity Foundation in London hasalso noticed this: “We all do donor reportsbut it is definitely the visits that stick in peo-ple’s minds and that make them see the dif-ference they can make”. Keith Punler said:“We support charities that have a strongcommunication stream so that we knowwhat they are doing and can see measurableoutcomes. It is not always necessary to haveformal reports, just communication of somesort about outcomes.”But several observed that some financiers

who are used to daily detailed reports andspreadsheets will naturally expect suchreporting in their philanthropy too. MaggieBaxter said: “How are hedge fund managerswho work 24 hours a day ever going to havea relationship with their community? Itmay be that the only way they know how toengage with a community project is to see aspreadsheet or analysis. It is fine if that isthe case, but recipients of their donationsneed to be able to respond to that. Theyneed to accept that donors engage with phi-lanthropy in different ways and – if theywant to attract more and varied donors –they need to be open to developing differ-ent kinds of relationships.” Without visitsor good communication links, it can be dif-ficult for donors to hear the truth at times.As charities become more professional intheir fundraising, the more they may tendto tell donors what they want to hear, ratherthan what is actually happening.

4.6 Managing the power relationshipSeveral of our interviewees raised the delicacyof relationships between donors and recipi-ents. Michael Hintze (42) self-effacingly


Role of communities in continuing action

said: “When you make the sort of money Ihave been lucky enough to make and yougive the sort of gifts I have given, the worldbecomes a very strange place.”We found thatmost of the philanthropists we interviewedwere very sensitive about this and about theway they handle themselves in their differentdonor and recipient communities. “Peoplecome to Wiltshire to hide their money, notflash it around,” commented RosemaryMacDonald, director of Wiltshire andSwindon Community Foundation.Matthew Bowcock (34) called the ten-

sion that can exist between donors and theworkers in charitable organisations “aslightly uncomfortable power relation-ship”, though it applies even more todonors and beneficiaries. He tries to ensure

that his actions are not divisive and is care-ful not to patronise or cause resentment.He believes that much of this possible ten-sion can be avoided through engagementand communication so that philanthropycan be rewarding and effective for all –donor, charity worker and beneficiary.Michael Campbell suggests that an indi-vidual should be aware of this tension andtake it into account when assessing the wayin which they hope to build connections ina community: “I do not think one shouldlook for a close relationship betweendonors and beneficiaries. It is unreasonableto expect this as generally people do notwant to be the subject of philanthropy andthe closer they get to the source of themoney the more uncomfortable they get.”

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5Barriers to communityphilanthropy

5.1 Finding projectsThe most frequently mentioned barrier togiving in a community was the difficulty offinding the right projects. The smallestoften fall below the radar of individuals,researchers or other experts yet may offerthe best solutions to local problems. KeithPunler said: “The community groupsknow better than anyone else what is need-ed at grassroots level.” Many of our inter-viewees had found that giving money awaywas more difficult than they thought. GuyHands (40) recounted: “My initial experi-ence of community giving was quite disap-pointing because a number of the charitiesI chose to support were inefficient and dis-organised and I did not feel that my sup-port had any lasting effect.”Matthew Bowcock (34) said: “To begin

with I found it very, very difficult to givemoney away in Surrey. It was not until Istarted to understand the concept of aCommunity Foundation that I actuallybegan to find the groups to get involvedwith. Giving away money is much, muchharder than people think.” MichaelCampbell (36) confirmed this: “Peoplecome across Community Foundations andthey have a ‘eureka’ moment. They sud-denly realise: ‘This is where the knowledgeis.’”This need for access to projects inspired

Fred Mulder to get involved with theNetwork for Social Change and then to co-found the Funding Network (54). He sawthe power of developing a peer group toaddress the problem. “I would like to see aculture developing of small, informal giv-

ing circles based in homes, churches, andsocial clubs,” he said. Organisations suchas New Philanthropy Capital, which pub-lishes thorough research-based reports onthe charitable sector and individual chari-ties, are improving the quality of intelli-gence available.Web-based communities are emerging,

such as globalgiving.org (56), kiva.org (57),localgiving.com (59) (all profiled in Section3), which provide access to vetted projectsas well as building communities aroundissues. LocalGiving.com, currently beingestablished in partnership with theCommunity Foundation Network, has thepotential to transform community givingat the local level where the majority ofprojects remain under the radar. It will bean important tool for making philanthro-py accessible and easy for the mass affluent.

5.2 VisibilityMany of our interviewees were going pub-lic for the first time only because they feltthat this would encourage others to followtheir example.53 Our interviews were allwith self-made entrepreneurs and business-men who had perhaps not had to live inthe public eye previously. Many did notwant to attract media attention for beingwealthy or for “doing good”; as they felt itwas often negatively interpreted in thepress. However, Musa Okwonga, AssociateDirector for Communications at TheInstitute for Philanthropy believes that themedia’s relationship with philanthropistshas improved over the last few years:


53 Many philanthropists remain

anonymous because this is a

requirement of their faith

“Philanthropists often have a concern thatjournalists will be intrusive. Yet in recentyears, the media have generally been posi-tive in their coverage of philanthropy: thismay be due as much to intrigue at the vastsums being pledged as it is due to interestin the areas that these philanthropists aretackling.” Nonetheless, Jim O’Neill (38)said: “I don’t mind being known for itwithin the world in which I operate, I justdon’t want the intense media coverage.”Nick Ferguson (16) varies his approach inLondon and Argyll: “Some friends locallyknow what we do, but blowing your owntrumpet is not what you do in that part ofthe world. If someone asked me if theKilfinan Trust was mine I would not lie,but I would not offer the information first.But I could not care less if people knowwhat we do in West Kensington and willhappily talk about it.”Personal status is a sensitive subject in

philanthropy. Our interviewees generallydid not want to discuss it at all, particular-ly the effect that philanthropy has on theirstatus in their community at home. Butcomments from advisers and intermedi-aries suggest that although recognitionwithin a donor community may be rewardenough, greater personal status certainlyacts as a motivator. One adviser comment-ed: “For some people public recognition, anational honour, association with the greatand the good, the clubbiness of it all is veryimportant. Many of our donors give to usbecause they can sit next to the Duke at adinner. And my biggest job is to organisethe seating plan at these dinners. I oncesaw someone complain about only beingon the Duke of Edinburgh’s table and notthe Queen’s table!”The status attached to acts of philan-

thropy has changed over time with theshift from predominantly inherited wealthto self-made wealth.54 Unlike the dukesand lords of the past who grew up with theduty to act as stewards to family funds andtheir community, today’s philanthropists

have the choice about whether to enhancetheir personal status in the community andin the public eye more broadly – but it is asubject which it is impossible to discussdirectly with them.There are practical issues too. Many

worried that visibility results in a deluge ofrequests for funding and that can be awk-ward, particularly at the local level. GuyHands (40) said: “There are friends doingfundraising that perhaps we do not thinkis very efficient or effective and they arethe most difficult because we know them.”In addition it can be awkward living prac-tically next door to somebody who isbeing supported by your giving. Nobodylikes to think of themselves as somebodyelse’s burden or as the object of philan-thropy. And most philanthropists areuncomfortable being seen as paternalistic,particularly at home. This can be enoughto put some off giving in their local area;others turn to Community Foundationsso that they can be anonymous if theywish. Keith Punler said: “I am happy touse the Scottish Community Foundationas a bit of a mask in some ways. First, I donot want to have to justify having given toone cause and not another. Second, whileI am happy to divulge what we do if ithelps to promote it for others I do notwant to shout about it. And third, itremoves the risk of getting involved withsomething very close to home where weare quite visible that could end up being amistake.”

5.3 Undefined roleSeveral interviewees referred to the fact thatthe provision of their local services is nowhighly dependent on the State. Many donot want their funds used simply to prop upstate-funded activities supported by state-funded foundations. Like the greatVictorian philanthropists they want to havetheir own distinct role. Alexander Hoare(19) felt particularly strongly about this:

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54 76.2 per cent of entrants on

The Sunday Times Rich List for

2008 had wealth that was classi-

fied as “self-made”, as opposed

to inherited. When the first

Sunday Times Rich List was

compiled in 1989, roughly 25 per

cent of the entrants had self-

made wealth, with the rest hav-

ing inherited it

“Before Sir William Beveridge, the commu-nity was deeply involved in the hospital, theschool and any sort of local provision. TheState came along and nationalised it all,interfering and monopolising, and now itdoes not work. The answer is self-evident;people need to handle it themselves.”But Nicola Horlick sees a real role for

philanthropists alongside the basics provid-ed by the State: “You can’t rely on the Stateto provide the soft elements; the frills. Wehave a fantastic health service provided bythe State, but you can’t expect it to do every-thing.”55 George Hepburn, chief executiveof the Community Foundation servingTyne & Wear and Northumberland, alsosaw a significant role for CFs in workingalongside the State to support the voluntarysector. He commented: “One of my mostsupportive colleagues remains disappointedthat Community Foundations have notbecome more strategic funders of the volun-tary sector. The vast majority of our grantsare for under £5,000. There is nothingwrong with that and we know the value ofbuilding the grassroots. But it would be ashame if we got trapped in that box. Thesector needs more well-funded posts andsome of our best grants have been toincrease the management capacity in smallgroups that give them the ability to grow.”However, precisely what the role of

today’s philanthropists should be is notclearly defined. George Hepburn com-mented on how different the role of leadersis in different parts of the country. “Peoplehave a strong sense of community here [inthe North East] and they do not expectothers to deal with their problems for them.This stems back to the Jarrow March in1936 when protestors against unemploy-ment and poverty marched from the NorthEast to London but nothing was done forthem. Nobody listened to them, nobodyunderstood them, nobody offered to helpthem and they realised they were going tohave to look after themselves.” MagnusLinklater recently wrote that we as a coun-

try actively shun our philanthropists.Telling the story of Carol Hǿgel who hereported has brought £20 million of phil-anthropic funding into Britain supportingthe London Philharmonic Orchestra andthe Edinburgh Festival among other things,he suggested that we might cherish such acontribution, “that governments and coun-cils, mindful of the benefits that they havegained…and the money they have saved inthe course of it all by not having to do itthemselves, would take care to foster goodrelations with such a valuable source ofpresent and future generosity.”56 However,he explained that when the Treasury intro-duced its new measures for non-domiciledresidents, no recognition was given to thosewho had made substantial contributions toBritish society. In fact, he reported, whenfriends of Carol Hǿgel wrote to the PrimeMinister and the Chancellor of theExchequer on her behalf about her inten-tion to leave Britain because of the £30,000that she is required to pay as a non-domthat “feels like a fine imposed on her forhaving the temerity to bring her wealth toBritain”, they received no reply.

Despite political rhetoric about individ-ual responsibility, there are few signalsfrom the Government that indicate adefined role for philanthropists. HazelBlears, Secretary of State for Communitiesand Local Government, at the launch ofthe recent White Paper, Communities inControl, praised the third sector for sup-porting democratic communities and vol-unteering. But she did not mention thecontribution of private philanthropy indeveloping strong community services and


Barriers to community philanthropy

55 Nicola Horlick was inter-

viewed for our last report, Give

and let give, published in

December 2007. This quote is

part of the profile in that report

56 Linklater M, “Welcome to

grasping Britain” The Times,

April 2008

“ There is a need for more understanding of the role ofprivate support for social purpose within a modern societyin which the state assumes basic responsibilities for socialjustice”Michael Brophy

sustainable community level organisa-tions.57 The National Association forVoluntary and Community Action didinclude philanthropy in the context of giv-ing money or volunteering in its June 2007report on the importance of local grant aidfor thriving communities: “Local peopleassociate to help each other perhaps initial-ly in informal groups and then more for-mally in recognisable VCS organisa-tions…Others may not have the time tovolunteer but express their commitment totheir community via charitable giving.Such philanthropists are often willing toallow their donations to local causes to beused to match a grant intended for thesame purpose, so that the value of the ini-tial grant can be multiplied several timesover.”58

Frank Field MP highlighted the role ofphilanthropy in liberating civil society inhis 2008 Allen Lane lecture: “…whilephilanthropy has a role in innovation, Iwould suggest its role above all else is inestablishing centres of power and influ-ence counterpoised to governments. It isin this role that philanthropy becomes a

crucial part of sustaining the freedomwhich a thriving civil society bestows onits citizens.”59 The suggestion that philan-thropy is a counterbalance to governmentgoes some way to explain why its roleremains undefined. In some cases, whichinterviewees did not want quoted, weheard of local councils obstructing theirinvolvement in local services and there arefrequent reports of such events in thepress. Some councils consider local phi-lanthropy a threat, rather than an asset towork with for social change, and thereforeprefer to block it.In a recent pamphlet making the case

for the Capital Community Foundation inLondon, Michael Brophy, former CEO ofCharities Aid Foundation, stated: “Thereis a need for more understanding of therole of private support for social purposewithin a modern society in which the stateassumes basic responsibilities for social jus-tice.” If citizens are to be re-engaged in cit-izenship, as Michael puts it, and to becomea force for social change, there will have tobe a cultural shift regarding the role of phi-lanthropists in Britain.

Building bridges

70

57 Communities in control: real

people, real power, Department

for Communities and Local

Government, 2008

58 Sustaining Grants, NAVCA,

June 2007

59 Field, F, “Acceptable behav-

iour contracts for the super-

rich”, Allen Lane lecture,

February 2008, www.allenlane.

org.uk/2008.htm

6Communityphilanthropy andan action agenda

Relatively small investments of money canachieve an enormous amount at grassrootslevel, something which the vast majority ofour interviewees found very rewarding andappealing. However, local solutions to localproblems tend to be highly tailored and usu-ally cannot be replicated without adjust-ments, which requires resources and funds.Given that only a small proportion of theState’s support goes to smaller charities, theyare in great need of private philanthropy.60 Arecent publication by the Local GovernmentAssociation Liberal Democrats’ Group drewattention to “the hoops and bureaucracies ofcentralised lottery programmes.” It said that“centralised funding regimes and bizarrereporting requirements have transformedthe voluntary sector into two halves – thegiant agencies delivering government targetsand a struggling mass of local activity, con-stantly forced to prove their own innovation,hopelessly spending their dwindlingresources on collecting irrelevant statisticsfor distant funders.”61

Our interviewees were unanimous thatlocal solutions tend to be unique. Ian Sellars(45) told us: “Generally there is no onemagic solution for a social problem - it isdifferent for each area. But it can be possibleto use business skills to attack a social issueas Law for All has done, adapting a modelthat has worked in one area, to work inanother, with specific identification of thenew area’s needs and local characteristics.”Stephen Hammersley of the CommunityFoundation Network said: “Very often what

we fund works because the set of local cir-cumstances makes it work. The specifics ofthe intervention tend to work because of thelocality and we try to think how thosespecifics could work in another locality witha different issue but it is always more com-plex that one first thinks”. A NationalAssociation of Voluntary and CommunityAssociations (NAVCA) report published inJune 2007 confirmed that a “bottom-upresponse to local issues and opportunities isa prerequisite for a healthy community.”62

6.1 The ingredients for well-functioningcommunity philanthropy

� Active giving circles and clubs in localand virtual communities around thecountry – homes, companies, schools,churches, libraries, social networkingcommunities – aimed at high networth individuals and the mass afflu-ent at all stages of life

Rationale� The infrastructure created by a circle

provides security, a sense of solidarityamong a type of givers or around acause, a sense of risk sharing, access toprojects, reference points for appropriategiving levels, anonymity and control overvisibility and a vastly reduced adminis-trative burden

� Networks for the super-wealthy would beprivate, closed door affairs and networks for


60 For statistics on State sup-

port of charities by size of chari-

ty see Civil Society Almanac

2008, NCVO

61 Communities Actually, Local

Government Association Liberal

Democrats’ Group, September

2008

62 Sustaining Grants, NAVCA,

June 2007

the mass affluent would be more inclusiveaimed at democratising philanthropy

� Bringing the mass affluent into a commu-nity of givers and connecting them acrosssociety at early stages in their lives or careersbuilds philanthropy into our culture andmakes it a socially normal thing to do

� Small gifts pooled together effect greaterchange

� Strong alliances between active andpotential philanthropists

� Philanthropists respond best to otherphilanthropists, particularly for the firststep on their philanthropy journey, butalso when continuing along the journeyand maintaining momentum

� Super-high net worth individualsrespond to other super-high net worthindividuals and tend to prefer a closeddoor approach. For maximum effecttheir networks would be more exclusivethan the inclusive mass affluent networks

� Government signals that endorse phi-lanthropy and social investment as acritical component of the develop-ment of community organisations

Rationale� Although philanthropy is about individ-

uals and leaders, government can sendpositive signals about its role in societythrough speeches, publications and poli-cy developments on the changing natureof community and local services

� Tax effective measures would supportand encourage community level giving ofmoney and time, through examples likethe Grassroots Grants programme

� Philanthropists involved in social invest-ment would benefit from tax efficiencieson provision of capital and loans

� Tax-efficient life time giving vehiclessuch as lifetime legacies would be inplace to enable individuals to allow com-munity members to benefit from theirassets during their lifetime

� Tax-efficient methods of donating art orunlisted shares would increase the range ofassets that can be deployed for philanthropy

� Small community charities would all beset up to claim tax incentives passed onby donors without added bureaucracyand administrations63

�� Efficient use of technology and web 2.0

Rationale� The web allows givers of all types to

find peers, research issues and shortlistprojects and helps to build communitiesof philanthropists around an issue bothconnecting donors to projects and cre-ating a circle of people united by thesame interest or purpose. The web canassist many of the earlier steps beforevisiting and immersing oneself in aproject and the power of web 2.0 nowenables ongoing links with projects andentrepreneurs

� The growing popularity of giving onlineor by text would be supported by appro-priate charitable rates and simple tax effi-cient incentives64

�� Visible everyday role models who arevalued by society for philanthropy ofany type of scale

Rationale� Although large-scale gifts by super-high

net worth philanthropists are criticallyimportant, many people cannot relate tothe enormous sums of money beingdonated; those at the mass affluent levelfrequently do not understand the greatchange that their smaller sums can makeat a local or grassroots level

� More visibility of everyday role modelswould dilute the celebrity media cover-age surrounding philanthropists todayand appeal to the mass affluent makingphilanthropy more ordinary

Building bridges

72

63 According to research by the

Institute of Fundraising, 39% of

small charities do not claim Gift

Aid but umbrella organisations

that enable them to do so at

minimal expense can be estab-

lished. The Government has

published guidance on how to

operate such a scheme on the

Gift Aid web information service

at www.direct.gov.uk/giftaid and

the Office of the Third Sector

website

64 Joe Saxton of nfp synergy

estimates that if an individual

donates £1.50 by text, the

mobile phone operator takes 55

pence

�� A positive vocabulary

Rationale� “Giving for social good or benefit or

change” rather than “giving back”removes connotations of paternalisticfeudalism and makes today’s philanthro-py a modern force for good

� “A portfolio of giving” would includegifts, investments, money, time, skills,knowledge, experience, ideas and consid-er them as a package. In this way anyonecan become a modern philanthropist intheir own way and no one way is betterthan the other

� Philanthropists using their moneymore creatively and effectively includ-ing using non-financial expertisealongside financial donations

Rationale� Forging links across social strata helps to

create networks and “bridging social cap-ital”. The philanthropist benefits and ismore likely to continue his involvement,and society is strengthened too

� Deeper knowledge and involvementwith an organisation encourages morecreative offers of philanthropy such asunderwriting which in turn encouragesa retained interest in a proj-ect/organisation

�� Intermediaries know their clients andoffer a simple menu of products thatappeals to the new self-made wealthy.Advisers can point clients towardsintermediaries

Rationale� Community Foundations, private banks

and other intermediaries have access totoday’s new wealthy. They would adopt along-term relationship-building approachto their clients/donors offering flexible

products that appeal to an individual’swealth, lifestyle and values

� Advisers would be able to introduce theirclients to intermediaries and philanthrop-ic organisations as part of regular finan-cial, legal and other advice

�� Strong reciprocity from charities

Rationale� Philanthropists want to know how their

money has been spent and want to feeltheir investment has been worthwhileand not been wasted. More active dia-logue from charities will probably resultin greater sharing of skills and experi-ence, longer-term funding and a general-ly easier dialogue about money sinceneeds will be well understood on bothsides

In his 2006 pamphlet, Providing Together,Michael Brophy, the CEO of Charities AidFoundation (CAF) for 20 years, called fora new financial compact between the citi-zen and the state ending with a rallyingcall: “Let Britain be the first to marry the19th-century ideal of private generositywith the 20th-century ideal of state provi-sion, into a 21st-century ideal of providingtogether.” It requires a society that encour-ages individuals to act as leaders in theircommunities, providing local solutions tolocal problems and providing creative solu-tions all around the world in diverse com-munities of purpose. Our ideal circum-stances set out above require an actionagenda that could be seized by individuals,charities, social enterprises and other organ-isations, and supported by Government andpolitical parties.

6.2 Action AgendaIn our last report, Give and Let Give, wemade ten core recommendations on howto build a culture of philanthropy in the


Community philanthropy and an action agenda

financial services industry that were rele-vant not just for financial services profes-sionals but for all high net worth individu-als. The action agenda set out below buildson those recommendations but is designedspecifically to develop community philan-thropy.

�� Establish easily accessible giving cir-cles or intermediaries that provideformal and informal networks – ascommon as book groups and invest-ment clubs:

Rationale� These should range from very private

affairs for the super-rich to more inclu-sive affairs for the mass affluent

� Inspired individuals can be entrepreneursand start their own giving circle amongtheir friends and colleagues – donorsrespond best to other donors, and circlesled by a philanthropist are likely to havethe widest effect.

� Intermediaries such as CommunityFoundations with their existing nationalinfrastructure and experts working in thephilanthropic area are unique in theextent of their relationships with bothphilanthropists and potential recipientsof philanthropy. They should highlighttheir potential as homes for giving circlesto both existing and potential donors.

� Private banks and financial advisers haveunparalleled access to high net worthindividuals and the infrastructure avail-able to build donor-led communitiesamong them. They should highlighttheir potential to house and convene giv-ing circles to both existing and potentialclients.

� Companies can use corporate socialresponsibility frameworks to developindividual social responsibility byencouraging internal leaders to establishgiving circles for employees at work, orby offering themed philanthropy fundssupported with matching schemes

� Charities themselves can build commu-nities of purpose by drawing philanthro-pists in as a peer group to the organisa-tion’s activities

�� Develop virtual matchmaking andsocial networking sites using web 2.0effectively

Rationale� Entrepreneurs or organisations able to

develop these sites would fill existinggaps if they focused on: (i) a web inter-face for building giving circles or com-munities of interest/purpose around anissue, (ii) a critical connection pointbetween individuals and projects thatovercomes a significant barrier currentlypreventing donors finding projects andvice versa, and (iii) enabling good feed-back and using the web as a platform tobuild reciprocity between charities anddonors

� The launch of localgiving.com in part-nership with the CommunityFoundation Network is a critical tool inthe development of local philanthropy incommunities of place in Britain

� Our proposal in Give and Let Give for aweb-based resource for City philanthro-pists, www.givinginthecity.org.uk, is anexample of harnessing a donor commu-nity of like-minded individuals into acommunity and of using the web as aone-stop shop for their philanthropy

�� Provide simple but flexible portfoliosof products suited to individualdonor needs

Rationale� Intermediaries from Community

Foundations to private banks that canoffer simple products that appeal totoday’s new wealthy will fill significantgaps in infrastructure for philanthropy.

Building bridges

74

For example, we believe that individualsfrom the mass affluent level up shouldhold charitable bank accounts. Thismeans “knowing your donor” and takinglong-term approaches to relationshipbuilding to offer targeted, tailored prod-ucts and advice that suits the individual’swealth, lifestyles and values

� Today’s new wealthy frequently want tomanage their money themselves or havetheir own fixed ideas on money manage-ment on top of which they want theadministration and ‘hassle’ function oftheir philanthropy taken away fromthem

� They want their philanthropy made sim-ple but they want products they canunderstand (for example, today’s finan-ciers and entrepreneurs like products thatprovide leverage – matching, lending)and they want a perfect fit for their val-ues

� Advisers should be able to signpost keyintermediaries and philanthropic organi-sations to their clients as part of regularfinancial, legal and other advice

�� Develop the fiscal environment

Rationale� Tax-efficient life time giving vehicles

such as lifetime legacies could be a sig-nificant source of capital for communitylevel organisations since individuals are

more likely to offer their legacies toorganisations they have engaged with ata meaningful level or that operate withina community that is well known to them

� Effective ways of claiming tax incentivesor ensuring charitable rates must keeppace with the growing use of the web andmobile phones for making donations

� It is time to revisit the wider tax envi-ronment for philanthropy to take intoconsideration the range of tools beingused today – from volunteering time tophilanthropic or sub-market loans ofcapital, the lending of buildings, or newsocial investment approaches

� Existing tax breaks on shares and gifts ofland could be widened to include unlist-ed shares and/or works of art, to expandthe range of assets that can be deployedfor philanthropy

�� Promote everyday role models todevelop a positive vocabulary for phi-lanthropy

Rationale� Large scale philanthropists hit the head-

lines but individuals engaged in smaller-scale philanthropy at the mass-affluentlevel are important for building a wide-spread British culture of philanthropy.More people need to see what relativelysmall amounts of money can achieve atthe grassroots level


Community philanthropy and an action agenda

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Website

www.instituteforphilanthropy.org.uk/

www.philanthropyuk.org

www.communityfoundations.org.uk

www.capitalcf.org.uk

www.kentcf.org.uk

www.communityfoundation.org.uk

www.wscf.org.uk

www.thefundingnetwork.org.uk/

www.thenetworkforsocialchange.org.uk

www.talkincompany .com

www.globalgiving.co.uk

www.kiva.org

www.rosauk.org

www.localgiving.com

www.thebiggive.org.uk

www.philanthropyuk.org/AGuidetoGiving

What to do

Find further information onphilanthropy

Find out more aboutCommunity FoundationsExample

Example

Example

Example

Join a giving circle

Give online to communityorganisations worldwide

Give microfinance loansonline

Join a women’s giving circle

Find community organisationsaround the UK

Find projects to fund

Understand financial toolsfor philanthropy

Where to go

� The Institute forPhilanthropy

� Philanthropy UK

� CommunityFoundation Network

� Capital CommunityFoundation

� Kent CommunityFoundation

� The CommunityFoundation servingTyne & Wear andNorthumberland

� The CommunityFoundation forWiltshire and Swindon

� The Funding Network � The Network For

Social Change� Talk In Company

� Global Giving UK

� Kiva

� Rosa UK

� Localgiving.com

� The Big Give

� Philanthropy UK’s AGuide to Giving

Appendix 1: Where to gofrom here…


Appendix 1: Where to go from here...

Website

www.philanthropycapital.org

www.evpa.eu.com

www.guidestar.org.uk

www.charitycommission.gov.uk

www.cafonline.org/

www.cafonline.org/Default.aspx?page=7025

www.charitiestrust.org/content/freedom_account

www.stewardship.org.uk/sov_account.htm

www.charitablegiving.co.uk/voucheraccount.asp

www.charitycheques.org.uk/charity_cheques_account.html

www.impactgiving.org.uk

www.payrollgivingcentre.org.uk

www.tax-effective-giving.org.uk/

www.cafonline.org

www.acf.org.uk

www.hmrc.gov.uk/charities/index.htm

www.pilotlight.org.uk

www.cranfieldtrust.org

www.investingforgood.co.uk

www.cdfa.org.uk

www.givingineurope.org

www.cafonline.org/pdf/CAF%20ADF%20solution%20v2h.pdf

www.prismcharity.co.uk

What to do

Find information on charitysectors /individual charities

Find venture philanthropyorganisations

Find information on individualcharities

Set up a charitable account

Set up payroll giving

Find information on tax efficient philanthropy

Give expertise

Get social investment advice

Find out about CDFIs

Give tax-effectively in Europe

Give tax-effectively to the US

Set up a donor-advised fund

Where to go

� New PhilanthropyCapital

� European VenturePhilanthropy Association

� GuideStar� Charity Commission

� Charities AidFoundation

� Charities Trust� Stewardship� South West Charitable

Giving� Charity Cheques� Impact Giving Charity

Account

� Payroll Giving Centre

� Tax Effective Giving� Charities Aid Foundation� The Association of

Charitable Foundations� HM Revenue &

Customs charity information

� Pilotlight� Cranfield Trust

� Investing For Good

� CommunityDevelopment FinanceAssociation

� Giving in Europe

� CAF American DonorFund

� Prism

Appendix 2: Methodology

SummaryWe analysed practices of local, grassrootsand community philanthropy in Britain.Our study was based on a qualitativemethodology. The focus was a series ofdepth interviews with philanthropists andphilanthropy experts around Britain. Wealso conducted a review of literature relat-ing to communities and philanthropy.

InterviewsWe chose depth interviews as the centralcomponent of our qualitative approach toenable us to gain a detailed understandingof attitudes and behaviour in individualphilanthropy, with a particular focus onthe motivational role of community. Weconducted more than 30 face-to-facedepth interviews with individuals andheld telephone conversations on specificpoints with many more. Our intervieweeswere philanthropists with a known com-munity or local element to their giving,and people working in organisations pro-moting or providing local philanthropicservices. All of the philanthropists weinterviewed were men. This was not bychoice but perhaps due to the fact thatalthough often they conduct their philan-thropy with their partner and are heavilyinfluenced by her, they tended to take themore public role. Many of the profession-als working in the sector whom we inter-viewed were women. We used a script for all interviews but

the process was two-way, enabling us con-stantly to review and react to our findingsand adapt the interview structure accord-ingly. We kept the interviews unstructuredenough to enable us to probe personalmatters as appropriate. Because many ofour interviewees said that this was the first

time they had discussed their motivationsour interview technique had to respectthat. Interviews lasted 30 to 75 minutes.Most were carried out with one intervie-wee, but occasionally there were two inter-viewees or a single interviewee was joinedby a colleague or adviser. The majority ofinterviews were conducted by the sametwo interviewers, although some were con-ducted by a single interviewer. An email was sent to all interviewees in

advance to explain the purpose of theresearch and introduce the interviewers. Atthe beginning of each interview permissionwas sought to record the interview, whichwas granted in all cases. We explained thatthe interview was carried out in confidenceand was non-attributable unless we soughtwritten permission. All tapes were tran-scribed and “marked up” methodicallywithin the analysis framework. The inter-views were conducted in different parts ofthe country between May and August2008.

Case StudiesAs in our last report, Give and Let Give, wedecided that using a number of brief casestudies would illustrate our points andprovide potential philanthropists with realexamples. Where an interview successfullyillustrated an aspect of our analysis, wesought permission to conduct furtherinquiry or a supplementary interview inorder to build up a case study. Intervieweeswere given an opportunity to review draftcase studies before publication.

Desk Research We carried out a review of literature toobtain academic perspectives on the role

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Appendix 2: Methodology

community plays in philanthropy, thechanging nature of modern communities,the development of online philanthropy,and the history and development of com-munity purpose organisations such asCommunity Foundations.

ScopeOur analysis has focused on the supply ofphilanthropic capital and not on thedemand from charities and social enter-prises. We recognise that the demand sidehas a distinct role to play in generating

increased supply of philanthropic capital.There has been a growing focus on the pro-fessionalism of charities and social enter-prises in their fundraising from all types ofindividual and corporate donors. Many aredeveloping sophisticated ways of commu-nicating their social impact in a highlycompetitive environment. These charitiesand social enterprises have a critical role toplay in unlocking donations of money andskills from individuals through the waythey approach and communicate withthem. How they do this is beyond thescope of this report.

Appendix 3: Glossary

Bonding social capital: value ascribed tosocial networks which connect individualsfrom homogenous backgrounds and ofsimilar societal status.

Bridging social capital: value ascribed tosocial networks which connect individualsfrom heterogenous backgrounds and ofdifferent societal status.

Charitable Account: vehicle that acts likea bank account for charitable giving.Account holders can make regular dep -osits via direct debit or payroll giving, orad hoc deposits of cash or shares. Alldeposits immediately receive all relevanttax relief.

Charitable Remainder Trust (CRT): aform of split interest trust, much used inthe US. It allows a donor to make an irrev-ocable gift to a charity during their life-time, of shares, property or cash, whileretaining the benefit of the income or useof the gift for the term of their life. Thedonor can make deductions against capitalgains tax at the time of the gift and itsvalue is not counted as part of their estatefor the purposes of inheritance tax. CRTsare not available in the UK.

Charitable Trusts: tax-efficient vehiclesthat provide a framework for planned char-itable giving. They are legal entities thatrequire a donor, a group of trustees and adeclaration of charitable purposes. Manytrusts are endowed, so they receive incomefrom an endowment of land or investedcapital. Trusts can either be grant-makingtrusts, in which case they give money toother charitable organisations to use, oroperating trusts, in which case they direct-ly perform charitable activities.

Community Foundations: charitabletrusts whose main aim is to support projectsthat engage local people in making theircommunities better places to live. In orderto serve this purpose they build endowmentsand make grants to local organisations, aswell as managing funds on behalf ofindividual and corporate donors.

Community Interest Company (CIC): anew type of limited liability companystructure for social enterprises operatingfor the benefit of the community ratherthan for the benefit of the owners of thecompany. CIC status is subject to a “com-munity interest test” and an “asset lock”stipulation, which prevents transfer ofassets at less than market value to organisa-tions that are not themselves CICs or char-ities.

Donor-Advised Fund: a charitable vehi-cle that acts as a sponsor to many fundsas an alternative to direct giving or set-ting up a private foundation. Throughthe vehicle, the donor has an easy-to-establish, low-cost way of conductingphilanthropy of his choice that also takesadvantage of tax incentives for giving.Community foundations pioneered theirdevelopment.

Gift Aid: the most commonly used UK taxrelief on donations. Under the Gift Aidscheme, charities can reclaim the basic ratetax on donations made by UK taxpayers.Higher rate taxpayers can also claim thedifference between higher rate and basicrate tax as personal tax relief.

Give As You Earn (GAYE): the UK’s largestpayroll giving scheme, operated by theCharities Aid Foundation.

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Appendix 3: Glossary

Giving Circles: communities of donorswho pool funds and other resources anddecide jointly the recipients of donations.Giving circles are often focused on givingwithin a local community.

High Net Worth (HNW) Individual:individual with over £500,000 ofinvestable assets. An individual with morethan £1.5 million of investable assets isreferred to as super-high net worth andone with £15 million of investable assets asultra-high net worth.

Lifetime Legacies: See Charitable RemainderTrusts.

Mass Affluent: individuals with liquidassets to invest but not at the level ofHNW individuals. Exact definitions differbut a recent study puts it as an individualwho has between £250,000 and £500,000of aggregate wealth.

Matched Giving: incentive scheme in whichan employer matches charitable donationsby employees. This is usually on a pound-for-pound basis, but may be two-to-one orgreater. Matched donations may be madethrough payroll giving or as one-off gifts.

Payroll Giving: tax-effective way of makingregular gifts. Employees of companiesoperating a payroll giving scheme can electto make regular donations from their grosssalary, thus receiving an effective deductionat their highest rate of income tax.

Social Capital: a term referring to the col-lective value of all social networks and theimpetus that arises from these networks todo things for each other.

Social Enterprise: a business with primarilysocial objectives whose surpluses are rein-vested for that purpose in the business or inthe community, rather than maximised forshareholders and owners.

Social Entrepreneurship: the use ofentrepreneurial business skills to addresssocial and environmental problems. Thiswill often involve revenue generation but isnot required. A social entrepreneur may ormay not be associated with a non-profitorganisation.

Social Investment: a way of creating newor expanding existing streams of financ-ing for civil society organisations andsocial enterprises as well as other initia-tives that offer sustainable solutions todevelopment.

Venture Philanthropy: an approach tocharitable giving that applies venture capitalinvestment principles – such as long-terminvestment and hands-on support – to thesocial sector. Its key characteristics are highengagement; tailored financing; multi-yearsupport; the provision of non-financialsupport, such as strategic planning advice,executive coaching and access to other net-works; organisational capacity building;and performance measurement.

Building Bridges

Philanthropy strengthening communities


Build

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ges

Rho

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Mitchellad

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Policy

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£10.00ISBN: 978-1-906097-36-3

Policy ExchangeClutha House

10 Storey’s GateLondon SW1P 3AY

www.policyexchange.org.uk

Community is an important element of a philanthropic culture.As well as the grassroots communities that are the focus ofmany philanthropists’ giving, the development of communitiesof purpose amongst like-minded donors is important for drivingforward philanthropy. In troubled economic times such as thosewe face today, strong networks amongst donors and solidpartnerships between philanthropists and communityorganizations provide the support necessary to keep the newbreed of philanthropists on their philanthropic journey. Showingcommitment in leaner times will confirm their role as leaders ofa modern British philanthropy.

This report builds on the work in our previous publication, Giveand let give, and considers attitudes and approaches tocommunity philanthropy. We interviewed philanthropists all overthe UK. We consider the roles that notions of community haveplayed in motivating their giving and guiding their philanthropicmethods. We look at their successes, as well as some of thebarriers they have faced in trying to act at a grassroots level andthe ways they have overcome them, in order to see what lessonscan be learned to help encourage and enable more effectivecommunity philanthropy in Britain.

Achieving a cultural shift is a big task. Greater understanding ofthe ways community can act as a catalyst for philanthropy andthe role grassroots giving can have in inspiring philanthropistswith less to give, can help achieve this task. This reportproposes a package of practical recommendations forharnessing the power of community for philanthropy, as well asconsidering inspiring examples of philanthropists from aroundBritain who have used communities as a focus for their giving.

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