This year has taught us a lot about philanthropy’s essential role in supporting charities as they face unprecedented challenges- from covid, to Ukraine and now the cost of living crisis. Through our quarterly pulse survey of high-net-worth giving trends in the UK, we’ve been able to ask a representative sample of millionaires how much they gave to good causes. Whilst in many ways the results are positive, we have seen waves of generosity from high-value givers, there are still questions around if this can be sustained and what must be done to create a culture of giving.
Generally, the results of the pulse survey will likely be unsurprising for charities and fundraisers. For cultural and tax reasons, the two big periods of high-value giving are the run-ups to Christmas and the summer holidays. But what is interesting is that over the last couple of years, the peaks in giving over these periods have increased, indicating a consistent upward trend in giving from high-net-worth-individuals.
The quarter leading up to June 2022 saw the biggest increase in millionaire giving since we began this research two years ago, probably driven by the cost of living crisis and the war in Ukraine. To me, it’s clear wealthy donors recognised we were facing another crisis situation and once again they gave to bolster the organisations they support.
I am slightly concerned we will see this tail off. Going forward, as we face a long recession, it could make it harder to sustain giving levels; particularly as many family foundations have dipped into endowments to support organisations they care about.
If we want to sustain this upward trend in giving, philanthropy should be part of our national conversation, which will require a concerted effort from the third sector, the media and government to change habits and behaviour.
The government and policymakers should be setting the tone by showing that they value civil society, and philanthropy is a key to making the sector more financially resilient by giving it access to independent streams of income. They could do that in a number of ways, they could have a unit within the civil service that's actually focused on philanthropy, although that has slowly dropped off the agenda over the last few years. Alternatively, they could find ways to encourage donors who maybe haven't made big gifts before to increase the level of giving, such as offering match funding around priority policy areas.
These kind of signals will lead the national media to follow suit. Currently, without a clear tone on philanthropy, the public get mixed-messages of ‘philanthropy is great’, then ‘philanthropy is not so great’. If government were to come out and say philanthropy plays an important role in securing the independence and resilience of our civil society we would see the national narrative change.
As a sector, we need to work together to encourage government to implement policies that encourage philanthropy. This isn’t easy as we don’t have one body who speaks for the whole sector in terms of policy asks from the perspective of philanthropy and philanthropists.
Right now there’s a great opportunity for fundraisers to engage with their donors and get them involved in more than just giving. Unlike in 2020 when social distancing measures were in place, in-person activities are an option, meaning donors can see what's happening at a grassroots level and the impact of their support.
I think it’s also important to be careful of going back to your biggest donors over and over again, which can be tempting during a recession and cost-of-living crisis. Although they are more likely to give again, it is hard to see how they will be able to increase giving through a recession. So the sector needs to make a strategic decision to invest in their long-term pipeline and inspire new donors.
Last year we published our report How can we better engage wealthy millennials in philanthropy? to show there is a different generation of givers out there who sit outside of the usual demographic fundraisers work with. There is a real opportunity now to build sustainable long-term relationships with younger philanthropists, many of whom are facing the same financial pressures as those with less money. It will certainly take time and investment before they give big strategic gifts, but that is why is important now to start building those relationships.
So my advice to fundraisers right now is think outside of your network and connect with those who can support your cause from both a financially and strategically and start finding opportunities for them to engage with you in the short-term, which can be gradually scaled up over time.