giving, philanthropy and creating a democratic society. cathy pharoah and tom mckenzie

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


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


Representing the population Spending power

Age

Household type

Population trends


010

2030

4050

perc

enta

ge o

f hou

seho

lds

dona

ting

0 20 40 60 80 100

expenditure percentile

1978-1982 2004-2008

Participation in charitable giving in the UK


020

4060

8010

0

cum

ulat

ive

perc

enta

ge o

f tot

al s

pend

ing

0 20 40 60 80 100

cumulative percentage of households

y = x1978-19822004-2008

Lorenz curves for expenditure in the UKChange in the distribution of money


Participation and children 0

510

1520

2530

35

prop

ortio

n do

natin

g (%

)

1978 1983 1988 1993 1998 2003 2008

year

households without kids households with kids


Amounts and children 0

24

68

10

2010

pou

nds

ster

ling

1978 1983 1988 1993 1998 2003 2008

year

households without kids households with kids


Generosity, age and children 0

.51

1.5

22.

53

dona

tions

, % o

f exp

endi

ture

1978 1983 1988 1993 1998 2003 2008

year

21-40, no kids 41-60, no kids 61+, no kids21-40, kids 41-60, kids 61+, kids


Representation of household types among donors 0

1020

3040

50

per c

ent

one personlone parent

married couplecohabiting couple

other multi-person

donors population

Note: Pooled data for England, 2001-2011.


Representation in terms of amounts donated 0

1020

3040

50

per c

ent

one personlone parent

married couplecohabiting couple

other multi-person

donations population

Note: Pooled data for England, 2001-2011.


Household types: estimates and projections for England, 1971-2031

Source: ONS population projections, table 402.


Distribution between causes


Proportions of donors to a cause and of money donated

Source: UK Giving 2012, CAF/NCVO


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.


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?


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


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


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

giving, philanthropy and creating a democratic society. cathy pharoah and tom mckenzie

News & Politics

charitable giving

democratic society sanghera

pluralist society

democratic deficit

kids households

wider population

role of tax reliefs

imbalances of power