Government plans to build a Big Society on the back of a wave of philanthropy are being undermined by funding cuts and a lack of direction in philanthropic policy, according to a report released today.

Researchers have called on government to target its attempts to incentivise philanthropy towards areas of greatest need, in acknowledgement that individual philanthropy is motivated firstly by their own personal values.

The report produced by the ESRC Centre for Charitable for Charitable Giving and Philanthropy (CGAP) warns that the “paradoxical and fragmented” approach to social investment is not an effective way to build either a better or bigger society.

“We need to re-think how to direct our help to where it is most needed,” said Prof Cathy Pharoah, co-director of CGAP (pictured).

Sir Stuart Etherington was yet more dramatic in his forward to the report, Philanthropy and a better society. “If our starting point is an expectation that philanthropy and voluntary organisations will replace the state in a zero-sum game, then we are destined to fail in our aspirations [to build a better society],” he writes.

Tax incentives and support need to sit alongside a concerted effort to increase giving to places and projects which have the greatest impact on communities in need, argue the report authors.

“Policies are unlikely to be successful unless government, policymakers and charities nudge or persuade donors not just to give more, but to give in ways which lead to greater inclusion, diversity and social justice,” the report reads.  

“The research has suggested that expectations of philanthropy may be far outstripping its capacity. If the ideals of Big Society are to be achieved, there will be an ongoing need to government to target its reduced resources to those whom philanthropic resources do not reach.”