A wide range of British public services could gain from the philanthropic approach that flourishes in the US and Canada
What is it about the British and asking for money? Most of us would rather stick pins in our eyes than seek a donation or support for a charity.
In North America there is no such reticence. Philanthropy has long been part of the fabric of public service institutions. This is particularly true of high net worth individuals: on average Americans earning in excess of $150,000 a year give eight times as much to voluntary sector organisations as their British counterparts.
Transatlantic experience shows that many of these donors will have been directly asked to give and that most of these causes could be considered partnerships with or complementary to public services. In 2009, Americans donated more than $300bn to causes such as education, hospitals and social services.
It might be argued that the US, with its lower taxation burden, expects and wishes less of the state in the provision of public services – and private philanthropy flourishes as a result. However, the giving statistics are equally compelling in Canada, which has a far more activist state and higher taxation rates. Donations by individuals in Canada to ‘public service allied’ causes amounted to more than C$10bn.
An industry has been created in North America to help public sector bodies maximise their potential to generate donations. In the past ten years, a similar industry has started to develop in the UK. Using this to unlock major donor funding could enable us to build the Big Society.
Philanthropy is not new to UK public services. Many of us have supported fundraising for our local hospital, including centres such as Guys and St Thomas’s and Great Ormond Street Children’s Hospital. In 2008 these hospitals raised £75m between them.
Education has also enjoyed some success with major donor involvement in academies.
In contrast, local government has undertaken relatively little fundraising to support its services. One exception is the new Library of Birmingham, which is due to open in 2013. The Library of Birmingham Development Trust, an independent charity, will raise funds to complement the city council’s investment in the project, with trustees drawn from community leaders who have a commitment to cultural services.
Central to the success of the trust is the recruitment of influential donors willing not only to provide funds but also to give the service their time, using their knowledge of and leverage in the community to fulfil its objectives.
This is not the jumble sale approach to fundraising. In line with Big Society thinking, the trust has been designed in response to the ideas of voluntary leaders.
Already a view is emerging that such an attractive vehicle could be used for other services in Birmingham.
While the new Library of Birmingham is an iconic building, there was as much enthusiasm from donors to be a part of an innovative way of designing and providing a public service and a new way of engaging with the council as there was for the specifics of the building itself. The model demonstrates community recognition that the public purse is not bottomless and that a public service can be made even better through direct private investment.
This is, however, balanced by the expectation that the government will continue to invest in public service provision and in supporting civil society.
Clearly such an approach is not appropriate to all the potential Big Society organisations. But there are many examples where it could make a huge difference.
A number of commentators have suggested that ‘philanthropy cannot replace state funding’. We agree. But philanthropy can provide a much bigger slice of funding for public services than the UK has so far enjoyed.
The public sector should take a fresh look at its role in the uncharted design of the Big Society and consider the new ways in which services might not only be provided but resourced as well.
Alan Edwards and Robin Thomas are directors respectively of CIPFA and of Action Planning. The two organisations are holding an event in March for chief financial officers to explore philanthropy and the Big Society
