Payroll giving 'a cock-up' says leading philanthropist in debate on promoting giving

By: 

Cheryl Chapman

Managing Editor, Philanthropy UK

Payroll Giving “has been a cock-up from beginning to end” according to forthright philanthropist and chair of The Philanthropy Review Tom Hughes-Hallett.

Hughes-Hallett, who is also chief executive of Marie Curie Cancer Care, the UK's leading end of life care charity, gave the view as part of a panel debating the perennial topic of ‘how to change the culture of philanthropy’, hosted by Conservative think tank Policy Exchange. It was held in the same week the government announced a £10m innovation fund to encourage new ideas for boosting giving.

Hughes-Hallett went on to say if more companies adopted payroll giving schemes it would make a ‘huge difference” to the levels and culture of giving. Currently just 2% of companies had implemented payroll giving.

“It is the only way to give cash tax effectively. It has to become mother and apple pie,” he said, calling on the likes of Marks & Spencer and the NHS, as high profile employers, to start schemes immediately.

In the government's Giving White Paper among the payroll giving promotion initiatives were:

• a year-long national profile-raising campaign to be launched in autumn
• the re-launch the national Payroll Giving Awards on 18 October 2011, including introducing a new Platinum Award for the best national performers and recognition to organisations achieving the biggest percentage uplifts in employee-giving

Hughes-Hallett also suggested that charitable banks accounts should be offered by every bank, so that giving could become the norm for the ‘mass-affluent’ – a term for which he apologised.

The Philanthropy Review recently undertook a study that showed how such a move could contribute £1bn a year in charitable funds, as reported by Philanthropy UK.

Over 150,000 tax-effective charity accounts already exist in the UK with specialist providers, such as C. Hoare and Co, Coutts and Co. and the Charities Aid Foundation.

At the event at the City of London's JP Morgan Bank on Wednesday (September 21^st), the panel kicked off by reminding the room that the UK is a generous nation, with the Rt Hon Lord (Robin) Janvrin, deputy chairman of HSBC Private Bank, saying one only had to think of names such as Rowntree, Peasbody and Shaftesbury, charitable organisations that have been around since Victorian times, to know “giving was in the country’s DNA”.

 But all agreed more could and should be done.

A feeling underpinned by telling statistics that show the wealthiest 10% of the population give 1% of their income to charitable causes compared to the poorest 10% who gave 3.4%.

Richard Cassell  partner of  Withersworldwide; Gareth Davies, head of the OCS and  Rebecca Eastmond, head of JP Morgan Private Bank’s PhilanthropicServices EMEA were also on the panel, chaired by Policy Exchange director Neil O’Brien.

They gave their views on what could help create a more generous spirit and deliver more philanthropy in the UK, following on from the aims of the Government’s recent White Paper and the independent Philanthropy Review.

Lord Janvrin said while many pointed to the US as a philanthropic culture the UK should aim to emulate he thought that would  never be achieved owing to our different historical and political perspectives. He said we should however borrow and develop their best ideas. He added  “there is no magic bullet” for increasing philanthropy and changing culture but that all stakeholders, charities, business, government, donors, the media and innovators had a role to play in boosting giving.

Richard Cassell talked about Lifetime Legacies, a US idea that many organisations and individuals in the UK philanthropy sector are keen to borrow, yet for which there is little political will currently. Cassell said its implementation in the UK would be relatively easy as it would not require changes to the current tax and regulatory system and existing paperwork could be used.  He said Lifetime Legacies would deliver many benefits apart from tax incentives,  including donors being able to be acknowledged for their gift in their lifetime and charity recipients being able to plan better based on the knowledge they were to definitely to receive an asset, instead of having to rely on pledges. 

Lifetime Legacies would work well for those who had more than £10,000 in assets to give and would benefit education, hospitals and medical institutions, museums and cultural organisations, but were not good for gifting works of art.

JP Morgan’s Rebecca Eastmond urged smarter giving. She said; “Engage the head and heart, see results, and giving becomes addictive. Giving is great but giving well is so much better.”  She also said greater collaboration between all stakeholders was key and the role of government was extremely important.

She gave an example of philanthropist Diana Barran, founder and director of CAADA, that improves the safety of victims of domestic violence, who by bringing together in one room representatives from police, local councils, the health service and social services with specially trained independent domestic violence advisors have saved thousands of pounds through collaboration and information sharing.

Gareth Davis, head of the OCS addressed the role of government in philanthropy saying it was not there to “direct or corral philanthropy” but to build on the edgy, experimental work that philanthropists could do and that public money “could not and should not be invested in”. He said what government could do was scale up pilot projects that had shown to be  successful, pointing to the new social impact bonds aimed at saving the country millions by targeting deprived families.

New technology, giving opportunities  that go with life’s grain, and creating philanthropic opportunities in schools through programmes such as that delivered by The Institute for Philanthropy, were also advanced as possible factors in changing the culture of philanthropy.

Hughes Hallett, who said he was optimistic by the government's support for philanthropy,  like many, voiced a need for more philanthropists to speak up about their giving, and revealed he had donated £50,000 the day before to local projects in Suffolk.

He said it was in effect his tax bill and by donating shares he had had the fun of becoming his ‘own Chancellor of the Exchequer’ by deciding to spend his tax on good causes rather than a stretch of motorway.

Sir Peter Bottomley MP, who was one of the many distinguished audience guests offered two points – that giving as a concept, even the giving of blood, should be celebrated and that those who were leaving legacies to say four children should consider  leaving legacies to five, and let the other four decide how the fifth legacy should be used to charitable ends.

Other points raised by the audience in questions was the negativity that often surrounds giving away large amounts of wealth and how to define philanthropy for a modern age and whether social investment should be considered part of it.

JP Morgan Private Bank’s new publication Philanthropic Lives offers an insight into the unique experiences of eight UK Philanthropists with the hope of inspiring others.