Philanthropy is, by its nature, unreliable. Philanthropists love humanity (that’s the meaning of the word) but they are human, too, even when they are corporate … if you see what I mean. Philanthropists are not always rich – philanthropy is a state of mind – but it is the rich ones that make the biggest difference. Ask Bill Gates.
Philanthropic giving is 100 per cent discretionary. It depends on the passion or the whim of the donor and it is impossible to regulate or steer it. Jeremy Hunt’s desperate plea for big donors to help fund the arts comes at the same time as the share of lottery funding for community groups is being reduced (from 46 per cent to 40 per cent) to give a greater share to the arts. Are these priorities right?
On the corporate front, the era of something for nothing philanthropy is over. Hard headed business people want to see their money working for them whether it is core business or not. The way some of the big corporates have taken on longer term, proactive funding relationships with major charities is commendable: M&S with Oxfam, BT with Childline, Royal Mail with Barnardo’s, though Royal Mail’s closing of its corporate social responsibility department in the run-up to privatisation is ominous.
Otherwise, such relationships may boost the company’s image, complement its market positioning or even, perish the thought, generate business directly. And why not? As long as there are no unacceptable strings attached.
Social Impact Bonds provide an upfront opportunity for socially responsible investors to help bring about positive social change; we will watch the progress of the Peterborough prison scheme with interest. Here, investors (including, in this pilot, the Big Lottery Fund) are buying in the services of charities to reduce reoffending rates amongst a cohort of ex-prisoners. The greater the success, the lower the burden on the state and the more of those savings are given to the investors. If improvement is less than 7.5 per cent after six years (compared to a control group) the investors receive nothing at all. At least in this model the financial risk is on the investors and not on the charities, as it will be in other ‘payment by results’ schemes.