1. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Giving,
philanthropy
and creating a
democratic society
Cathy Pharoah
Tom McKenzie
9 May 2013

2. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
What does democracy in giving mean for society?
 giving is spread between causes according to donor-market demand
 giver population represents the wider population
 giving itself redresses imbalances of power, wealth,
and responds to need
 giving funds advocacy for a democratic society (Sanghera, 2012)
 through tax reliefs government yields spending power to citizens
and promotes pluralism

3. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Representing the population
 Spending power
 Age
 Household type
 Population trends

4. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
01020304050
percentageofhouseholdsdonating
0 20 40 60 80 100
expenditure percentile
1978-1982 2004-2008
Participation in charitable giving in the UK

5. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
020406080100
cumulativepercentageoftotalspending
0 20 40 60 80 100
cumulative percentage of households
y = x
1978-1982
2004-2008
Lorenz curves for expenditure in the UK
Change in the distribution of money

6. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Participation and children
05101520253035
proportiondonating(%)
1978 1983 1988 1993 1998 2003 2008
year
households without kids households with kids

7. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Amounts and children
0246810
2010poundssterling
1978 1983 1988 1993 1998 2003 2008
year
households without kids households with kids

8. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Generosity, age and children
0.511.522.53
donations,%ofexpenditure
1978 1983 1988 1993 1998 2003 2008
year
21-40, no kids 41-60, no kids 61+, no kids
21-40, kids 41-60, kids 61+, kids

9. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Representation of household types among donors
01020304050
percent
one person
lone parent
married couple
cohabiting couple
other multi-person
donors population
Note:
Pooled data
for England,
2001-2011.

10. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Representation in terms of amounts donated
01020304050
percent
one person
lone parent
married couple
cohabiting couple
other multi-person
donations population
Note:
Pooled data
for England,
2001-2011.

11. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Household types: estimates and projections
for England, 1971-2031
Source:
ONS population
projections,
table 402.

12. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Distribution between causes

13. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Proportions of
donors to a cause
and of
money donated
Source:
UK Giving 2012,
CAF/NCVO

14. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Charitable bequests by cause and gender
Selected cause % estates with bequest % estates with bequest
Animal 28 20
Worship 28 23
Physical Disabilities 16 13
Hospice/ hospital 26 24
Culture 6 8
Education 3 5
Ex-Services 5 8
Causes with similar proportions:
Child welfare, rescue, medical research, nursing,
overseas aid, cancer, elderly, environment, mental health
Source:
Atkinson, A et al. (2009) Charitable bequests
and wealth at death in Great Britain, Working
Paper A09/03, University of Southampton.

15. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Does giving have a ‘democratic deficit’?
Is giving inherently democratic?
 Giving by amount does not reflect majority donor preference
 Giving population does not fully represent wider population, and gaps might grow
 The nature of giving reflects rather than redresses imbalances of wealth
 Donor tax reliefs increase citizen power, but not equally for everyone
Does giving have the effect of increasing democracy and social justice?
 Better-off donors only partially respond to democracy and social redistribution
 Philanthropy is part of a pluralist society, but not inherently diverse or pluralist
Could the contribution of giving to democracy and redistribution be increased?

16. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Role of tax reliefs
 In the UK, policy on donor tax reliefs intended to promote a democracy of giving
 Gift Aid initially for gifts of +£600 in single donation (Lawson,1990): threshold
gradually lowered to widen access to tax-breaks
 In 2000, New Labour Chancellor Gordon Brown abolished any threshold –
‘Instead of charity seen in the old way, the rich bestowing favours on the poor, I
want a democracy of giving, where all those who can, help all those who
can’t.’ (HM Treasury, 1999)
 All gifts became theoretically eligible for Gift Aid (Finance Act 2000)
 90% tax-effective giving today is through Gift Aid, used by +one-third of donors
 Brown linked wider participation in giving with desirable redistributive effects

17. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Perverse incentives
Why has tax policy not been more redistributive in its effects?
 Increased uptake is largely due to promotion of Gift Aid by existing charities
 Charities focus on gifts rather than potential givers when promoting Gift Aid
 Perverse incentive for charities to narrow target markets
 Tax-reliefs offer wealthier donors a greater incentive to give
 Less well-off donors will not necessarily give more support to social needs

18. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013
Costs and opportunities in democratic deficit
 Do people think philanthropy is important? – does giving reflect what people can
afford or what they choose to give? Would/ could they give more?
 Marginalisation of certain groups – less well-off, lone parents, co-habiting couples,
one-person households (likely to increase) – failure to respond or failure in asking?
 Collateral loss – donations, inclusion, ‘voice’, engagement – the additional qualities
which giving can bring, and from which good causes might benefit
 Giving focus on married couple households - proportion in population likely to
decline, and giving constrained by costs of children
 Social needs not getting enough support in time of prolonged recession
 Could charitable tax-reliefs be used to better effect to address democratic deficit?
 Encouraging altruistic, pro-social attitudes, and ‘voluntary redistribution’ – beyond
behavioural ‘nudges’ for individuals to give

19. Giving, philanthropy and creating a democratic society • Cathy Pharoah and Tom McKenzie • 9 May 2013