How do we know what we know?

It is a paradox that everyone agrees the UK lacks a decent body of philanthropic research and yet there exist widely known ‘facts’ such as the rise of new philanthropy, the prevalence of self-made donors over inheritees, the lower levels of giving in the UK compared to the USA and the greater generosity of people with smaller incomes.

This article discusses the basis for such accepted wisdom and reviews some of the most cited and influential publications that currently inform our understanding of philanthropy.

The need for more, and better, philanthropic research in the UK is not only widely accepted as true, it is also currently in the process of being rectified, most notably with the launch of a new research centre on charitable giving and philanthropy.

But to say there is ‘not enough’ philanthropic research is to risk over-looking those studies that already exist, without which our understanding would be based solely on anecdotes and impressions. 

A widely cited book, used by charities, fundraising consultants, policy makers, journalists and others, is ‘Why Rich People Give’, produced by Philanthropy UK in 2004 and written by our founder director, Theresa Lloyd. Based on in-depth interviews with 100 wealthy people and their advisers, this report highlights the motivations for giving by Britain's wealthy and also covers a range of issues such as barriers to giving and engagement with beneficiaries. A summary is available on the Philanthropy UK website, as is the follow-up research ‘Wealth and Philanthropy: the views of those who advise the rich’, which was published in 2007.

Another frequently-cited report compares the giving ethos and philanthropic behaviours in the UK and the USA and concludes that efforts to promote a culture of giving must take account of the political structures, social attitudes and the role of charitable giving in any particular country. This report, ‘Generosity versus Altruism: Philanthropy and charity in the US and UK’ was written by Karen Wright and published by the London School of Economics in 2002.

Unlike most areas of social life, what is known about philanthropy comes largely from non-academic sources, known (somewhat disparagingly) as the ‘grey literature’, meaning publications produced by organisations such as think tanks, for-profit research organisations and charities themselves, as well as the broadsheets or quality press.

A few examples illustrate that much of the ‘accepted wisdom’ about UK philanthropy comes from this grey literature. The Sunday Times Rich List Giving Index (published annually every April since 2003) is a prime source of information about the names of major UK donors, how much they give and what causes they choose to support. Annual research reports published by sector umbrella bodies, notably NCVO’s ‘Civil Society Almanac’ (known until this year as the ‘Voluntary Sector Almanac’) and CAF’s ‘Charity Trends’ contain data on many aspects of charity income and are essential fixtures on the bookshelves of anyone seeking to understand charitable giving in the UK. Influential think tank reports include the much-cited Institute for Fiscal Studies report ‘State of Donation’ (1997), which was the first to prove that lower-income households donate more as a percentage of their income than richer households, and the Institute for Public Policy Research report ‘A Bit Rich: what the wealthy think about giving’ (2002) which used focus group data to argue that wealthy non-givers need a change in attitudes about their own wealth and capacity to help others, as much as changes to the tax system.

However influential ‘grey literature’ may be, it is never accorded the same respect, or considered as reliable, as peer-reviewed academic outputs. Fortunately, some academics have taken an interest in researching philanthropy. Historians have been the most enthusiastic and a number of excellent books have explored the role of charitable giving in the nation’s past, particularly in relation to the development of the welfare state. The best-known living historian of English philanthropy is Frank Prochaska, based at Yale, whose article on women and philanthropy in Victorian England appears in Philanthropy UK’s special report on Women & Philanthropy (March 2008). However, David Owen’s panoramic study, ‘English Philanthropy 1660-1960’ is probably the best starting point for anyone interested in a historical account of philanthropy. Sprinkled with fascinating facts (like the examples of endowed trusts that failed to foresee future social and technological changes, including donations to fund the tolling of the church bell before public executions and keeping an oil lamp burning ‘forever’ at the corner of Billingsgate in London), this is literally a treasure trove of a book, as well as a learned introduction to an under-documented aspect of England’s past.

Economists have also taken an interest in the topic of philanthropy, usually driven by efforts to comprehend what they see as a puzzling situation whereby ‘rational self-interested man’ chooses to give money away. Typical solutions to this apparent conundrum involve recasting all apparently altruistic behaviour as exchanges in which money is swapped for a ‘warm glow’, a ‘positive self image’ or some other intangible benefit. The most prolific economist studying philanthropy, James Andreoni, is based in San Diego but his thorough and readable review of 25 years of economic research on philanthropy includes UK studies and is freely available online. However no firm and final conclusions are reached as Andreoni admits, “Despite its importance, a clear understanding of philanthropy has eluded economists”.

Psychologists have also explored the topic of philanthropy, much of which challenges the self-interested models found in economic theories. Dr. Tom Farsides of Sussex University, and a contributor to Philanthropy UK, has produced some of the best known work in this area, including his paper on understanding psychological factors behind charitable giving, available online.

A discussion of the economic and sociological accounts of philanthropy, by Professor Peter Halfpenny at the University of Manchester, may be almost a decade old (published in the academic journal Voluntas in 1999) but it remains the most thorough examination of the topic this side of the Atlantic. Professor Halfpenny, who is the most senior UK academic with an interest in philanthropy, currently chairs the Voluntary Sector Studies Network and has written widely on issues around charitable giving. He told Philanthropy UK that he particularly admires the work of Richard Steinberg, professor of economics at Indiana University – Purdue University Indianapolis, because, “He writes perspicuously, his conceptual analyses of the issues are penetrating, his deployment of economic theory is incisive, and his statistical analyses are technically sophisticated. Overall, his work is highly illuminating and it has helped to establish the field of philanthropy as an exciting and demanding one”. Professor Steinberg co-edited ‘The Nonprofit Sector: A Research Handbook’, which appears in Philanthropy UK’s recommended Reading list.

Professor Jenny Harrow, co-director of the new UK centre on charitable giving and philanthropy, told Philanthropy UK that she has been most influenced by the work of Professor Diana Leat. “A report she wrote in 1992, ‘Trusts in Transition: the policy and practice of grant-giving trusts’, contained the first typology of grant-making in the UK by differentiating between foundations that operate as gift givers, investors or collaborative entrepreneurs. Diana’s work, especially her exploration of decision-making within philanthropic foundations, is continuingly influential”.

Professor Leat herself names Waldemar Nielsen’s research on American foundations as a major influence on her work. She told Philanthropy UK, “Nielsen is a rebel and a creative thinker with a passion for the potential of foundations. The research presented in his books, ‘The Big Foundations’ and ‘The Golden Donors’ goes inside the black box of foundations and adds to our basic knowledge about the size of gifts and endowments to explore the internal dilemmas and patterns of grant-making found in these organisations”.

As in Leat’s case, inspiration for UK research often comes from the US, where the field of philanthropic studies is much more firmly established. In our March 2007 Newsletter, Theresa Lloyd explained that the genesis for her own research into UK major donors lay in a study conducted in New York. “I came across a copy of Francie Ostrower’s book ‘Why the Wealthy Give’ and immediately realised how essential and helpful it would be to have a similar book based on UK research. I was amazed to learn that one did not exist… The result was my book, ‘Why Rich People Give’ which is very different to Ostrower’s book but was inspired by her ideas and approach”.

In conclusion, the research discussed in this article has undoubtedly advanced our understanding of philanthropy in the UK, but many chasms in our knowledge remain to be filled and new challenges continue to arise, creating yet further demands for substantive, objective research. To name just two, the impact of globalisation on philanthropy, especially communications and technological developments, needs to be better understood and the growth and dispersal of the vast amount of new wealth created in recent decades needs to be tracked and analysed. With the growing impact of the philanthropically funded sector on all aspects of our society, the urgency of answering such questions only grows.

There is a great appetite for a better understanding of philanthropy. Whether it will be sated depends on the willingness of more researchers to specialise in this field and the far-sightedness of funders to support their work.

How Philanthropy UK keeps you up to date with influential research

Philanthropy UK has endeavoured to draw attention to philanthropic research in a number of ways.

1. Every edition includes a Publications Section with reviews and notices of the newest books hot off the press. This current edition of the newsletter contains a review of the hotly debated ‘Just another Emperor? The myths and realities of philanthrocapitalism’ and notable highlights from previous editions include Bill Clinton’s ‘Giving’ reviewed by Gerry Salole of the European Foundation Centre.  
   
2. The Publications Section also contains a regular column entitled ‘Influential reading’ in which high profile people from the philanthropy sector tell us what books have most inspired and shaped their approach to philanthropy. Our influential readers tend toward eclecticism and recent picks range from The Open Society and its Enemies by Karl Popper to Andrew Carnegie’s Gospel of Wealth to “anything” by Charles Dickens.   
   
3. Summaries of the most notable publications on philanthropy can be found in the resources section of Philanthropy UK’s website which includes a regularly updated Reading List. This diverse and evolving selection includes reports on individual and family philanthropy, philanthropic foundations, biographies of philanthropists, academic texts, histories of philanthropy and impact and performance measurement.  
   
4. Philanthropy UK’s fortnightly News Bulletin contains a section dedicated to philanthropic research, as well as keeping readers abreast of all the latest philanthropy news. You can subscribe to the free bulletin now – click here!