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Trends in major giving revealed in new report

Fundraising | Celina Ribeiro | 14 Nov 2008

The majority of million and multi-million pound gifts made during the last financial year were banked in trusts and foundations, according to a new report which paints an interesting picture of the trends within major giving in the UK.

The Coutts Million Pound Report reveals that 56 per cent of gifts worth £1m – which total £1.618bn - or more were designated by donors to be banked rather than spent immediately.

Of the remaining gifts made of £1m or more, almost half (42%) were given to higher education, says the report which wealth advisors Coutts claims to be the first attempt to collect and analyse data on donations worth £1m or more.

Health causes were the next largest beneficiaries with 13.8 per cent, followed by international development at 11.6 per cent.

The study, which looks at the 2006/2007 financial year, found that 193 donations of at least £1m were made to third sector organisations; the majority of which came from individuals either directly or through their own trusts and foundations.

Just 9 per cent of donations of the million-plus magnitude flowed in from corporations – most likely to be hit by recent financial turmoil.

Around 120,000 people in the UK have the capacity to make a gift of £1m, according to the analysis, which was produced in association with the Centre for Philanthropy, Humanitarianism and Social Justice at the University of Kent.

Million pound ceiling

But while the report’s authors expect this year’s financial meltdown to have some impact on million pound-plus giving for the year 2007/2008 - arguing that it will perhaps more significantly affect confidence rather than capacity – they concluded that a more powerful barrier to the super rich giving above their current levels is, what they term, the ‘million pound ceiling’.

Community Foundation Network chief executive Stephen Hammersley agrees with the report findings which suggested there were cultural links to the figure. “There is something about a round number, often of £1m, that fits with people’s perception of what constitutes a big or ‘statement donation’ that will get a public profile and make the donor feel psychologically that they’ve made a significant donation,” he said.

One in five of donations worth at least £1m were made for precisely £1m. The tendency towards such statement sums, warned the report authors, could result in donors being trapped under a ‘million pound ceiling’, giving just £1m when perhaps they have the capacity for more.

Leaving it to the kids

A reluctance to leave their children an unduly large inheritance is becoming an increasingly powerful motivating force behind major philanthropists’ tendency to give. The report authors discovered that wealth advisors are witnessing increased concern among their clients about the potential negative impacts of passing on a fortune to heirs and that, in addition to traditional motivating factors, such as belief in the cause and self-actualisation, this concern was likely to become more prominent in the future as more people become rich from their own entrepreneurialism.

Entrepreneur and million pound donor John Stone was quoted in the report. “I made far more money than I ever expected to make and take the view that we wouldn’t do our children any favours by leaving it all to them,” he said.

The report was released at the launch of the Centre for Philanthropy, Humanitarianism and Social Justice at the University of Kent on Thursday evening. The new centre is part of a three-centre research team recently set up by the government to more fully understand motivations and trends in charitable giving. 

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Who's Who: Celina Ribeiro