The personal touch

By: 

Cheryl Chapman

Managing Editor, Philanthropy UK

Philanthropist Marcelle Speller visits Diggin' It, a Plymouth-based community project

An age of austerity, the birth of Big Society, a questioning of capitalism, along with demands from a new kind of philanthropist, have pushed community giving up the agenda. Here we look at the distinct pleasures of giving to communities of place and interest and offer tips on how to achieve your philanthropic ambitions close to home and heart …

The old saw ‘charity begins at home’ is enjoying somewhat of a renaissance.

The UK has a long tradition of community-based philanthropy, be it community of place or of interest. Many of the first hospitals, libraries, schools and art galleries were established by enlightened local business people acting out of faith and enterprise to address the poverty, disease and social ills that wealth-making business revolutions had brought to their doorsteps. Some of the UK’s greatest institutions, The Children’s Society, Guy’s Hospital, Whitechapel Art Gallery, stand today as monuments to that early concern for local neighbourhoods and people.

But, over the last half century or so, a shrinking world and a media explosion has opened up a global vista for philanthropists who have focussed further afield on issues such as famine, injustice, environmental disaster and the developing world.

However, the current political, social and economic climate appears to be bringing philanthropy ‘home’. The UK’s economic struggles and resulting government cuts have left charities needing to do more with less, while a ‘Big Society’ agenda has seen the state step back to leave space for individuals and groups to take ownership of their problems. A growing gulf between the haves and have-nots and a summer of riots has also enflamed a new urgency for creating more cohesive communities and a need to build on the extensive and innovative community work already happening. Localism is high on the news, political and giving agenda.

Indications of a trend to give locally includes new research from Coutts & Co that accompanies the publication of a new guide Inspiring Local Philanthropy, which reveals four out of five of the philanthropists they surveyed from their client base give locally.

Also nominations for this year’s Arts & Business Prince of Wales Medal for Arts Philanthropy suggest a shift towards funding arts outside of London. Over 100 people were nominated for the awards and 50% are giving their money to organisations outside the capital.

Arts & Business says: “Given that the last Private Investment survey run by Arts & Business showed that London based cultural organisations were raising over 80% of money from individuals, perhaps the strengthening of non-London nominations suggest that change is happening.”

Indeed, new research from the Charities Aid Foundation’s (CAF) on voluntary income reveals that smaller charities have fared better through the recession than larger ones. It shows the voluntary income of large charities (those with an income of over £10m) fell by nearly 11% (or £84m) between 2007 and 2009.  While medium-sized charities with an income between £500k and £10m, saw their voluntary donations actually increase by 2.2% over the same period.

 Jane Arnott, CAF’s senior advisory manager, says: “This may be a result of the importance of ‘local’ charities to donors or the fact that people may be substituting long term charity commitments for more ad hoc contributions, such as sponsoring friends and family.”

That’s not to say small grassroots organisations are well-funded, especially those which are ‘under the radar’.  Despite making up 85% of all voluntary organisations, small organisations receive just 6% of the sector’s total income.

But it is not just the growing need of charities or a political agenda that is rekindling a passion for local philanthropy: rather it is the emergence of a ‘new’ kind of philanthropist, typically entrepreneurs and financiers who have made their own wealth through shrewd and creative business practice. They are showing an appetite for a certain style of high-touch, high-impact, high-engagement philanthropy that is satisfied by supporting local communities.

As illustrated throughout a new guide from Coutts & Co Inspiring Local Philanthropy, local community activity and philanthropy is driven by people’s passions, interests, enthusiasm, frustrations or aspirations for local communities.

And for many philanthropists, supporting the communities in which they live, work or from which they originate forms the beginning of their philanthropy journey.

The rewards of local giving

Supporting a community, whether it be a community of interest  or a geographical one brings particular reward as articulated by the 30 or so high net worth philanthropists interviewed for the 2008 report on community giving produced by think tank Policy Exchange.

Just some of the motivations for giving to communities voiced by these donors are:

•           ‘touch’ or proximity to one’s giving 

•           seeing the impact of a donation

•           achieving greater impact with modest amounts of money

•           being able to contribute time and skills

•           building relationships with other donors, local organisations and beneficiaries

Guy Hands, founder and chairman of Terra Firma Private Capital, noted: “If you cannot see the impact, it is very difficult for a businessman to give. A community charity may not always have the advantage of scale, but it does have the advantage of closeness and being able to demonstrate first-hand what it does.”

Hedge fund investor Michael Hintze, who runs his own foundation, speaks of an element of ‘market place’ in “liking to see what is going on”.

While a private equity partner, quoted in the report, explained the power of ‘touch’: “Most things are easier to understand if you can touch them and feel them. If you can meet the people either doing the work or benefiting from the work, it makes it real. One of the biggest problems with donating money is that often you have no sense of ownership or touch. The human touch is a very strong feeling. If you cannot touch something, there is a risk it does not exist and it is much easier to engender that feeling if that thing is in striking distance.”

Proximity however can strain the delicate relationship between giver and recipient, in a way that does not happen when giving to a large national charity. Many interviewees raised the issue and were aware that it had to be dealt with sensitively and some preferred to shelter behind a named trust or complete anonymity. But once they were deeply involved with a community, all said it would be very difficult to walk away – their commitment to an area became long-term, the bridges they had built were solid, according to the report.

Philanthropist Marcelle Speller and founder of Localgiving.com that brings local charities and funders together through a digital platform says seeing the difference she has made helping the ‘amazing’ people that run the charities she supports gives her “a sense of community, of belonging, and it recharges me”.

“By giving locally you can see that you are giving effectively, and you can have the most joyous, enriching experiences.”

Giving smaller amounts of money strategically to achieve greater impact is one of the most rewarding aspects of grassroots philanthropy, interviewees reported.

SGV Capital chairman Nick Ferguson, who is chairman of the Institute for Philanthropy and supports areas of Scotland explains in the report: “Although the amounts we are giving away are not unappreciable, I feel they would not make a dent in the big charities. Whereas if we give that money to small organisations up in the Highlands it makes a huge difference because so few people are really funding up there.”

 Maggie Baxter OBE, founder and chair of Rosa, the woman’s fund for women and girls  adds:“We do not need to be big, we need to be strategic. We do not need £50 million to make a statement. We need to use small amounts of money well to have influence…Women can achieve an awful lot with £500.”

Coutts’ guide, produced in response to growing client demand for more information on locally-focussed philanthropy, confirms much of the earlier report.  Andrew Preston, a North East property developer, says: “For my family and me, it is the engagement that gives the satisfaction, not just signing a cheque. Staying engaged is one of the keys to successful giving. It is a privilege to be able to give and make a contribution to social change.”

 In the same report Angus and Wanda Lloyd, who set up the East Court Fund in 2006 to support local need in Surrey, say fulfilment comes from “helping and getting to know people in need in our local area. It’s more rewarding than simply handing out a cheque. We like to get to know the individuals involved and, where possible, meet the beneficiaries. We believe this support is more valuable long-term as we are able to build up a real relationship.”

But many find it is not particularly easy to give their money away at grassroots level. The main difficulty is in identifying the most pressing needs and then finding the right local projects to give to.

A Spring 2011 survey from independent research agency ActionPoint that compared the public’s awareness of local charities in Hertfordshire and West Yorkshire revealed low recall. Overall just over half – 51% of residents – were  able to name a charity.  

Technology is helping. As mentioned earlier Marcelle Speller used the skills and acumen employed to build her business Holiday-Rentals.com to create Localgiving.com  to bring donors and charities together.

The internet also allows for research through local press, intermediary organisations, the charities themselves, as well allowing donors to connect with each other. Donor networking is reported as one of the real pleasures of local giving, and there are many opportunities to network online and off through giving circles (see Rosa 16) for example.

Technology can be the medium through which new donor communities emerge. Philanthropist and chairman of the Community Foundation Network  Matthew Bowcock says: “I think people build their own philanthropic communities, particularly when their community is a cause. With the modern social networking technologies people can build completely new communities out of philanthropy, but they are as likely to be virtual as geographic.”

Michael Hintze summarised how communities of interest and place can overlap: “Nowadays with killer telecommunications and travel, the definition of community has changed and community circles can be created from diasporas. Things I support philanthropically because of community connections are my old university, the University of Sydney, the church, and where I live in Wandsworth.”

It’s clear ‘local’ does not mean ‘parochial’.

In some cases, effective local activity can be ‘scaled-up’ or replicated to benefit other communities across the UK, or indeed internationally.

Many local projects focus on longer term global challenges, such as climate change, resource scarcity or changing demographics, all of which will have profound long-term implications for local communities. Rising sea levels place coastal areas at higher risk of flooding, scarce resources mean higher prices and hardship for those on lower incomes, an aging population will have consequences for the provision of care.

The just-published Funding Locally, Thinking Globally report from the Environmental Funders Network, draws on the desire to make a difference locally, and the concern for the common good. The booklet brings together six case studies of forward-looking local projects that are contributing to a more sustainable world.  

Across the UK, thousands of organisations are positively impacting communities from the grassroots up. The range of opportunities and ways to use wealth, expertise, skills and social capital to support their organisations is therefore immense. In fact it can be overwhelming.  In the next section we look at how philanthropists can approach these opportunities to best meet their ambitions.