Family businesses and high net worth individuals drive UK philanthropy
High net worth individuals in the UK, some of them family business members, are the biggest donators of £1 million (€1.17 million) or more to charities in the country, despite an overall decline in giving, according to a report by private bank Coutts.
Out of a total of 174 million-pound-plus donations made during 2009/2010, 60% of the money came from the very wealthy, said the study entitled The Million Pound Donors Report 2011.
“Philanthropy can act as the 'glue' within families and between families and their business. It can bring significant benefits to the family enterprise and to the communities they seek to support through their charitable giving,” Maya Prabhu, head of UK philanthropy at Coutts, told CampdenFB.
On the other hand, philanthropy by companies in the UK accounted for 10% of the overall £1.31 billion donated, a 1% decline from the previous year. The fall wasn’t out of sorts when compared to the amount given by all sources, including professional and private foundations, said the report. The number of million-pound donations is down by 15% year on year.
“[The fall] mirrors the general sentiment in the economy and financial markets in the year 2009/2010, the impact of a fall in wealth creation events and of philanthropists increasing the length of their decision-making process by becoming more strategic,” Prabhu added. “[But] it is also important to pause and celebrate the contribution of individuals and trusts at the most significant levels of philanthropy.”
London accounted for the majority of the donations, with 56% of all contributions coming from individuals or organisations based in the capital.
Family businesses also contribute a large share, reckons Prabhu. “The key drivers for this include families wishing to express their values, a desire to motivate employees and to keep or bring the family closer together. This is remarkable when you consider that over 65% of businesses in the UK are family-owned – their contribution to charitable causes is therefore significant.”
Among some of the best-known philanthropists are family business heads such Andrew Wates, former chairman of construction company Wates Group, and Richard Ross, head of family-controlled Regentsmead, which operates in the property development sector. Both family firms have charitable foundations to direct wealth, said the report.
While a considerable amount of money donated (52%) was directed towards formal charitable foundations, education and international development also received a big chunk of the million-pound donations, found the report.
