APPG REPORT CALLS ON GOVERNMENT TO UNLOCK £11.4 BILLION IN GIVING AND SOCIAL INVESTMENT THROUGH TARGETED POLICY CHANGES
2 NOVEMBER – The All Party Parliamentary Group (APPG) on Philanthropy and Social Investment meets today to discuss 10 recommendations that could unlock greater giving and social investment from private sources in the UK.
The UK has a philanthropy sector worth more than £100 billion, but the lack of targeted policies means that charities and social impact organisations miss out on as much as £5 billion of philanthropic income each year. Targeted policies could also accelerate a further £6.4 billion of investment from the social investment sector, which already contributes £60 billion to the UK economy delivering public services, health provision and community cohesion.
The APPG is publishing its report today Unleashing the Potential of Philanthropy and Social Investment to highlight that government must take the lead to unleash more voluntary private funding to support the current cost of living crisis and the recovery from the Covid-19 pandemic.
The recommendations to enable, incentivise and support philanthropy and social investment are:
- Appoint a Philanthropy and Social Investment Champion as a senior post within the Civil Service.
- Build Civil Service knowledge of philanthropy, match funding and social investment blended finance.
- Keep regulations on values-based investment under review.
- Work with the Charity Commission and Financial Conduct Authority to develop guidance and targeted regulation for philanthropy and social investment.
- Support initiatives to further develop data on the economic and social contribution of philanthropy and social investment.
- Extend DCMS’s “Growing Place-Based Giving” Programme which was cut short by Covid-19.
- Develop match funds on priority themes such as climate change, Levelling-up and regenerating the arts and culture sector.
- Review incentives for social investment, drawing on lessons from the Social Investment Tax Relief.
- Offer long-term commitment to Government guarantee scheme for social lending.
- HM Treasury should explore providing support for structures for giving that use existing tax reliefs.
The report highlights that the lack of clear policies and leadership from government mean the UK is failing to grow this vital revenue source that targets the most vulnerable in society and enables communities to thrive. Giving by high-income donors has been increasing in recent years according to HMRC data, but their giving levels as a percentage of their income are much lower than low-income donors. If the UK were to achieve the same level generosity as Canada or New Zealand, it would generate an additional £5 billion for civil society organisations.
Rushanara Ali MP (MP for Bethnal Green and Bow, Labour), Co-chair of the APPG says, “The scale of social need we are facing in the UK will require a government that can work in partnership with all sectors of the economy, including philanthropists and social investors, who support our communities through funding grass root organisations. This is even more important given the ongoing challenges post pandemic and the cost of living crisis in our country.
Whilst philanthropy and social investment cannot and must not be considered a substitute for government intervention and action, they play an important positive role in society and that needs to be harnessed. The pandemic has shown us that many people who have financial resources keep up their giving to the charities and causes they care about even in uncertain times. Tax, philanthropy and social investment are not mutually exclusive and encouraging generosity is not only desirable, it is essential to ensure stronger communities are at the core of our response to the current economic hardship.”
Danny Kruger MP (MP for Devizes, Conservative), Co-chair of the APPG says: “The British public comes together to support one another in many different ways, not least during the Covid-19 pandemic. It is imperative that we tap into this sentiment and deliver a policy environment that is conducive for high levels of philanthropic giving and social investment, designing a framework to support meaningful change.”
- The All Party Parliamentary Group on Philanthropy and Social Investment aims to to further the understanding of the role of philanthropy, giving and social investment in parliament, and to act as a discussion forum for politicians, philanthropists, social investors and experts to develop policy to improve and increase the amount of giving and social investment to good causes in the UK.
- The report published today Unleashing the Potential of Philanthropy and Social Investment has been produced with input from the leading organisations in the philanthropy and social investment sectors including the Association of Charitable Foundations, Beacon Collaborative, Big Society Capital, Charities Aid Foundation, Chartered Institute of Fundraising, New Philanthropy Capital, Philanthropy Impact, The Philanthropy Workshop, UK Community Foundations, Arts Council England, City Bridge Trust.
- The top 300 charitable foundations have assets of £72 billion and gave £3.5 billion in the financial year ending 2020. All UK private giving is estimated at £22.3 billion. Social investment has grown nearly eight-fold from £833 million in 2011 to £6.4 billion in 2020 and is expected to double by 2025.
- Giving by high-income donors has been increasing in recent years according to HMRC data, but their giving levels as a percentage of their income are much lower than low-income donors. Those with income >£250,000 typically gave £80 per month, compared to £25 per month among those earning <£50,000. In percentage terms, the median ratio of donations to gross income is 0.2% for those earning >£250,000 and 1.2% for those earning <£50,000.
- To read the full report please click here.
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