Giving, philanthropy and creating a democratic society. Cathy Pharoah and Tom McKenzie
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