The government has been urged to boost high-net-worth (HNW) giving as research published this week reveals that the UK’s top earners currently make “relatively small” donations to charities.
Research by think tank PBE found that the country’s top 1% of earners made charitable donations of around 0.2% of their gross income, or a median donation of £623 a year and £52 a month, between 2020 and 2022.
PBE’s research was conducted for the second annual Giving and Impact Summit in London yesterday, at which civil society minister Stephanie Peacock said the government “recognises the vital role the impact economy can play in helping to drive stronger economic growth across the country”.
Ahead of the summit, over 130 of the UK’s most prominent philanthropists signed a joint letter urging the government and wealth management sector to do more to boost HNW giving.
The letter, published in the Sunday Telegraph on 6 July, calls on the government to make more use of matched funding schemes and to simplify the gift aid process.
It also urges wealthy people to “leverage their full range of assets”, including financial resources and strategic skills, to address society’s most urgent problems.
The letter, whose signatories include Oxfam GB chair Charles Gurassa, Mark Leonard Trust founder Mark Sainsbury and Arora Charitable Foundation founder Sunita Arora, also calls on the wealth management sector to better equip advisers to discuss philanthropy with clients and suggests introducing optional donations from lottery winners.
Giving among wealthiest ‘on the up’
PBE’s research found that donors with annual incomes of around £211,000 made a cash donation of about £34 a month, compared with £39 for those with incomes of around £297,000.
The largest typical donations came from the highest earners, or people with incomes over £523,000, who typically gave £167 a month to good causes.
In comparison, across the whole UK population, typical people who donated to charity in 2022 gave around £20 a month, according to the Charities Aid Foundation’s UK Giving Report 2022.
The research adds that while Covid-19 “didn’t spark an immediate growth in generosity among the UK’s top earners”, there are “positive signs that giving among the wealthiest may now be on the up”.
“Typical donors continued to give only a small fraction of their income, leaving the charity sector still heavily reliant on a minority of especially generous individuals.
“Yet there are encouraging signs of change. Since 2021, giving among the UK’s wealthiest appears to be rising.”
Indeed, recent data from the Beacon Collaborative reveals that median donations from high-net-worth individuals increased fivefold between 2020 and 2023, from £1,040 to £5,600.
Government ‘believes in power of philanthropy’
Speaking at the Giving and Impact Summit, Peacock said: “This government believes in the power of philanthropy and impact investment to achieve social good, and the vital role it can play in delivering our ambitious Plan for Change.
“This isn’t about replacing public funding – it’s about amplifying it, building on our British spirit of generosity and driving systemic change at both local and national level.
“By working together, we’ll achieve the positive impact we all want to see in communities across the country.”
In his keynote speech, John Caudwell, founder of Caudwell Children and Caudwell Youth, said: “Philanthropy isn’t a luxury. It’s a responsibility.
“One we must embrace not for recognition, not for tax relief, but because we belong to a society that only works when we lift others up, not just ourselves.”
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