Philanthropy has an important role filling the gap between the public and private sectors but needs to “grasp the opportunities” and also address criticism, Sir Stuart Etherington said last night.

The chief executive of NCVO delivered the 30th annual lecture of the Attlee Foundation on Philanthropy, Fairness and Democracy and discussed issues thrown up by the 'Give It Back George' campaign earlier this year, addressed criticisms of philanthropy as well as its future.

He argued that: “Philanthropy performs a crucial role in supporting and informing public debate over what sort of society we want to live in and how we should organise that society.”

Explaining: “Somebody - something – has to fill the gap between a retreating state and a market prone to failure. No one set of institutions can deal with the challenge of an atomised, diverse, ageing society.”

Etherington described the focus on philanthropy, as a result of the Give It Back George campaign as “at times uncomfortable” and echoed Matthew Bowcock, chair of the Community Foundation Network’s call for a debate on its “role and purpose”.

He explained that: “The public’s limited understanding of philanthropy was of course evident earlier this year in the dispute between charities and the Treasury over tax relief on charitable donations.”

Problems and solutions

He stated: “Philanthropy is not without problems: more needs to be done in terms of openness and accountability for example.”

Arguing that people are unclear about it, he said: “We need a stronger narrative for philanthropy that reasserts its moral underpinnings and accentuates the positive achievements that giving time and money can make.”

He explained that one way to do this is to make better use of data: “In our battles earlier this year, better data on where tax reliefs are deployed would have led to a better, more informed debate. Data on philanthropy are, on the whole, lacking and we must address this.”

Additionally he said: “Philanthropic resource should also be focused on innovation, working as society’s social risk capital, pump priming ideas and new services or unmet needs that the state or the market cannot or will not.”

Thirdly he stressed the importance of working with government: “If we are to address the arguments that philanthropy is too limited in scale, too prone to ego, then we need to build the sort of constructive collaborations that (Clement) Attlee himself envisaged.”

Warning to government

Etherington also took the opportunity to warn government that philanthropy was not a substitute for government funding.

He said: “The current popularity of the crowding out thesis – that all the state needs to do is get out of the way, then philanthropy and voluntary action will take its place – is vastly overdone. It flies in the face of all the evidence we have about relative scale.

“The argument for additionality is however strong; the challenge is that these boundaries are so blurred that the risk is of inevitably slipping into subsidising statutory service provision by default.”

On Fundraising

He also threw is weight behind the current proposals for fundraising regulation reform:“I am increasingly of the view that we need more responsible fundraising: whilst approaches such as direct mail and face to face undoubtedly produce returns at the margin, surveys consistently highlight that they are off-putting for others.”

Adding: “The sector has made a commitment to reform the regulation of fundraising. We need to stick to this task if we are to maintain trust and confidence in the charity brand, not to mention address the concern that we are in danger of overfishing what is a common pool resource.”

Giving trends ‘troubling’

Citing research by the Centre for Charitable Giving and Philanthropy, he sated that: “Over the longer term, trends in giving are more troubling.”

And explained: “Those generations born after the Second World War are less likely to give than those born before. And those who are giving are giving a smaller proportion of their wealth.”

But stressed that “people still give” and the success of fundraising events like Comic Relief and Children in Need highlight this.

Philanthropy does work

Addressing the charge that philanthropic giving is ineffective, he said: “There is evidence that not all giving is effective. But this is no different from the application of taxes or the reinvestment of profits.”

But argued: “The state has also found it difficult to meet the needs of those at the margins of society, those Lord Adebowale describes as ‘the most difficult to deliver services to’. It was the pioneering, altruistic actions of volunteers and donors that provided the bulk of HIV AIDS services and support in the 1980s when the state largely stigmatised those living with HIV AIDS.”

And added that in the last ten years much has been done to address this issue, saying: “Charities have come an awfully long way over the last decade in becoming more efficient and effective and ultimately impactful.”

Pointing out that: “Governments of successive stripes clearly think that the charity model works – they are spinning out various public bodies into charitable organisations, including most recently the Canal and River Trust and Nesta.”