Introduction

Data on million pound giving in the UK during 2016 is a picture of growth and continuity.

Below are some explanations and discussion of the key findings of the Million Pound Donors Report 

Growth at the top

The total value of million-pound donations in the UK reached its highest level since this report began, with a total value of £1.83 billion. Not only is the collective value up, but the average (mean), at £5.9m, is also 10% higher than the previous year. And all of the ten biggest donations made in 2016 were worth at least £25 million. Indeed, eight-figure philanthropy accounts for the bulk of the total value, with donations worth £10m or more totalling £1.11 billion.

Philanthropy is a complex activity that resists simple explanations: each donor has their own unique reasons for making any particular gift, so there are no simple explanations for this growth. That said, three factors that may have contributed are:

  • ongoing increase in positive media coverage of philanthropy, which shines a spotlight on major giving and helps make it a ‘norm’ amongst those with the most to give
  • the emergence of new role models, notably Mark Zuckerberg and Priscilla Chan, whose late 2015 announcement pledged 99% of their wealth to public interest causes
  • the expansion of the philanthropy advisory industry, as research shows that donors who take professional advice give more than those who do not

Slight drop in donations

The 2017 report also contains some less good news. The number of donations worth £1m or more is 5% lower than the previous year, which might suggest the pool of donors willing to commit to these biggest gifts is shrinking.

However it is well understood that year-on-year figures can be misleading because datasets with small populations are likely to be more erratic. As highlighted in the 10 year anniversary report, taking a 10-year perspective, there has been a 60% increase over the decade since this report began – from 193 million pound donations in 2006/07 to 310 in 2016.

The magic million

In 2016, as in all nine previous editions of this report, the mode (the most commonly appearing value) was exactly £1 million.

In previous years we have noted that giving exactly ‘a million’ appears to have a cultural resonance – it is an economically and psychologically significant figure to both donors and recipients. This is supported by the fact that the biggest gifts in other countries are typically a million of the local currency, be that US dollars, euros or Canadian dollars

Whilst any organisation receiving £1 million will clearly be grateful, it may be that – however unintentionally – a ‘million pound ceiling’ has emerged as a high-point beyond which most donors are not encouraged to stretch.

Counter-intuitively, this finding should be good news for the charitable sector because it indicates a potential state of under-giving and an opportunity to increase major donations. Charities and philanthropy advisers can help donors gain the confidence to increase the size of their major gifts to a level that more accurately reflects their capacity and desire to give. 

Non-UK based donors

The important contribution of non-UK based donors was evident again in 2016, with 30 gifts coming from 13 different locations. The value of these donations amounted to £264 million, representing 14% of the overall value.

This finding reflects two key factors

Firstly, globalisation and the cosmopolitan lifestyle of many of the biggest philanthropists. As the case study of Sir Paul Ruddock in the 10 year anniversary report illustrates, major donors often live and hold deep personal connections to more than one country, so their ‘philanthropy of place’ is multiple. This results in significant support for charitable institutions in multiple nations.

Secondly, this is an outcome of the global appeal of some UK charities, notably universities and hospitals whose brand and reputation are not confined within national boundaries. 

Higher Education hits £1 billion

Very few of the c.100,000 fundraising charities in the UK are lucky enough to ever receive a million pound donation: just 246 organisations were in this position in 2016 and two-thirds of them (68%) received only one gift of that size. 

The type of organisation most likely to receive a million pound gift is, yet again, Higher Education Institutions (HEIs). Indeed, the university sector enjoys a triple whammy:

  • HEIs received 36% of the total value of million pound donations in 2016
  • HEIs were the most likely to get one of the mega-gifts, receiving seven of the 11 eight-figure donations
  • HEIs are the most frequent recipients of multiple million pound donations

This good fortune replicates HEIs wider fundraising success. In 2016 the Ross-CASE survey reported that total fundraising by UK universities surpassed the £1 billion mark for the first time.

There are a number of reasons for the enduring popularity of this cause amongst million pound donors:

  • HEIs are all multi-million pound organisations and therefore capable of handling seven-figure donations, unlike the vast majority of charities which have annual turnovers of well under £1 million
  • HEIs have usually enjoyed a long period of existence that can be counted in decades – even centuries in the case of Oxford, Cambridge and St Andrews – which is reassuring to donors wishing to establish a project with a long life-span
  • HEIs offer a huge variety of opportunities to donors: from providing scholarships for deprived students, to supporting academic and extracurricular excellence, to funding cutting-edge scientific research and medical advances with global impact
  • HEIs have an ‘asking advantage’: their development offices are often large and professionalised, in part due to recent government-funded investment in capacity building
  • HEIs enjoy a ready-made constituency of potential donors: the latest Ross-CASE survey reports that over four-fifths (81%) of individual gifts to universities came from their alumni

In summary, HEIs are ‘philanthropy-friendly’ institutions which are likely to remain the top destination for million pound donations for many years to come.

Attraction of foundations

Second only to HEIs, million pound donors are most likely to place their gifts into charitable trusts and foundations for later distribution. This destination accounts for 31% of the total value of million pound donations in 2016, including three of the eleven donations worth £25 million or more.

Why do so many donors choose to ‘bank’ rather than ‘spend’ their major gifts? The foundation model is appealing for those who want to adopt a more structured and tax-effective approach to their giving to maximise their impact. A further advantage is a separation of the decision to give and the decision about what to give to – donors may be ready to earmark some of their wealth for philanthropy before they decide what they wish to support. A foundation can be established and topped up whilst wealth is still being generated, ready for distribution once time is available to think carefully about philanthropic priorities and strategies. As many philanthropists, from Joseph Rowntree to Bill Gates, have noted, it is harder to give money away than it is to make it in the first place. Speed and urgency in meeting needs must be balanced with care and consideration in deciding how best to meet those needs.

Once donors have decided their giving strategy, they may choose to continue putting funds into their foundation to ensure long-term support for their chosen causes and create an institutional legacy. The continuing strong flow of funds into these giving vehicles is a guarantee of future support being available for charitable organisations. 

Boom time for corporate philantropy

2016 saw the biggest number and highest total value of million pound donations made by corporates. Sixty-five donations worth a total of £512 million were identified, accounting for over a quarter (28%) of the total value.

Whilst this could be seen as an indication of high-level corporate support recovering after the post-crash drop, it is also the result of continued strong philanthropic activity by a small number of firms. It is also because of distributions from corporate foundations that were established in previous years, underlining the points made above about the value of ‘banked’ donations.

Aside from a few notable exceptions, the corporate sector in the UK has not had a tradition of making large charitable gifts. However, family businesses, who are both owners and shareholders, obviously work within different parameters and subsequently feature strongly amongst the most philanthropic companies. Other companies, whether family or non-family-run, take the view that philanthropy can help create a competitive advantage by enhancing reputation and attracting the best employees, especially amongst millennials who prefer to work for ‘good’ employers in the widest sense of the term.

History

The philanthropic impulse is likely to have existed as long as society, but the first organised charity, the King's School in Canterbury, was founded in 597AD.

Given the dominant role of the Church in the past, it is unsurprising that religious causes were the prime beneficiaries of charitable donations for many centuries. Poverty relief, human welfare and education became common recipients of the philanthropic effort during the Age of Enlightenment.

The Victorian Age (1819–1901) was a period of great growth and maturity for philanthropy in the UK. Many of today’s most popular charities, such as the National Society for the Prevention of Cruelty to Children (NSPCC) and the National Trust, were established in the 1800s, while prominent philanthropists of the time included Charles Dickens and Baroness Burdett-Coutts (granddaughter of Thomas Coutts, the founder of Coutts).

During the 1940s, the UK created a welfare state, with the basic premise that the government should provide universal health care and education, as well as other social support and protections. This still shapes the context of philanthropy in the UK today, as major donors tend to believe private philanthropy should not be a substitute for government funding in these key areas. Instead, philanthropy is seen as a way to support activity that falls outside the realm of the state or business.

Today, philanthropy is popular both politically and culturally in the UK. The government has a dedicated Minister for Civil Society based in the Office for Civil Society, who drives government policy in the area. The government also encourages charitable giving, primarily by offering tax incentives and relief to donors.

In the UK, there are three separate regional regulatory bodies for charities. The largest is the Charity Commission, which covers England and Wales, in addition to the Office of the Scottish Charity Regulator and the Charity Commission for Northern Ireland.

National public fundraising campaigns such as Comic Relief/Sport Relief and BBC Children in Need have arguably become part of popular culture, and receive extensive media coverage. Media interest in reporting on major philanthropy has also increased, and million pound donors in the UK do tend to receive publicity for very large gifts, especially when the donor is happy to be named.

While some philanthropists wish to remain anonymous, there is a significant amount of information in the public domain about donors. Even so, there are efforts to further increase the flow and availability of information about funders. For example, in 2013 the Indigo Trust launched an initiative with the aim of ensuring that within five years, 80% of grants made by UK charities, foundations and others would be reported as open data to agreed standards.

The UK also has a tradition of honouring philanthropists. These honours include the Carnegie Medal of Philanthropy, the Beacon Awards and state honours. The Prince of Wales Medal for Arts Philanthropy also honours philanthropists who support the cultural life of the UK.