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UK Big Society will depend on US business techniques, says Philip Blond 3

Finance | Niki May Young | 21 Oct 2010

Leading thinkers in the sector last night suggested that engaging US-style business techniques could be the key to developing the Big Society.

Cathy Pharoah, Dame Mary Marsh, Justin Davis Smith, Philip Blond (pictured) and Penny Wilkinson joined chair Lord Andrew Phillips at a roundtable discussion in London organised by the European Association of Planned Giving which asked: Can the Big Society create new cultures of giving? 

Answering questions based around the sustainability and extent of the Big Society concept, the panellists offered views surrounding the importance of re-engaging business in philanthropy, building relationships with businesses, and providing investment opportunities which offer return as well as a charitable gift.

Philip Blond, director of think-tank ResPublica, was particularly enthused by the possibilities for creating new models of business and charitable giving.  He called for the leverage of charitable money as seen in new models in the US where foundations have been allowed to invest in socially good companies, where before they were required by law to give donations or loans direct to charities. “The new economy,” he said, “is linking together non-charitable and charitable money.”

US strategy increases socially good investment

“What’s now permitted in the US is for foundations to buy out the risk at the top of the risk curve on a business. Buying out that risk, taking the initial 20 or 30 per cent hit and allowing private money to come into a pro-social business, then you can leverage charitable money eight, ten, 12, 15 times, you can massively increase the amount of good that a system can do.

“Then what you do is you produce private sector gain from social good,” he added.

New models of investment such as these, which provide return to the investor in exchange for social good, could be “a game changer”, he said, in creating a new mass social movement.

“That, in a way, is the most radical implication of the Big Society,” he said.

And the current economy provides the perfect climate to progress this change, he added, by offerering the opportunity to change business models.

Charities Act review 'critical'

But, Dame Mary Marsh said the review of the Charities Act in the new year would be “utterly critical” in creating a new model for giving as it reviews the definitions of charity, business and social enterprise.

“You need to have a situation where private benefit and public benefit can exist together, under the law at the moment you can’t,” she said.

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Who's Who: Cathy Pharoah | Dame Mary Marsh | Justin Davis Smith