Phi Newsletter: March 2013

Welcome to the March 2013 edition of the Factary Phi newsletter.

Major Giving News

Times appeal helps net £2m charity donation

A children’s charity championed by The Times newspaper has received a £2m donation from the Private Equity Foundation.

Place2be, which provides vulnerable children in primary schools with support and counselling, intends to use the money to extend its programme into a number of secondary schools over the next five years.

Shaks Ghosh, the chief executive of the Private Equity Foundation, said: “Research shows that the leap between primary and secondary school can be too large for some children who struggle to regain their footing and fall back in their learning.”

The charity, which has an annual turnover of £7m, works in 164 primary schools and has run pilot schemes in ten secondary schools.”

Times readers raised £200,000 for Place2be during the 2009 appeal, also raising the charity’s profile which is now attracting further donations and volunteers.

Brevan Howard gifts over £20m to Imperial College

The Brevan Howard hedge fund, is set to donate £20.1m over 8 years in order to support the construction of a new research centre in financial economics.

The donation pledge has been spearheaded by Alan Howard, founder of the hedge fund and himself an alumnus of Imperial College.

The former student, who studied chemical engineering there for four years, said ‘I think Imperial gave me a great education (…) I found that my engineering education really set me up for what I do now.

David Begg, who is the former principle of Imperial College’s business school said the scale of the funding will help enable them to set up a substantial research centre. ‘It is fantastic to see someone in Europe with the ambitions to be world class,’ he said.

The business school is now looking for a founding director for the centre, and there will be “three or four big-hitting senior appointments”, according to principal Dorothy Griffiths. There will also be more junior academic appointments and a PhD programme for between 15 and 20 students.

Mr Howard has become increasingly involved with his alma mater over the past eight years and is now a fellow of the university. He gives several million pounds a year to educational institutions, and has already given £1.5m to Imperial to fund scholarships in the department of energy.

The agreement between the university and the hedge fund is non-exclusive, and Imperial may look for funds from other donors. However, Alan has stated that “Brevan Howard will consider more funding if required,”

Generous MP underestimates Twitter

Berkshire MP Fiona MacTaggart has pledged to donate £14,268 to Comic Relief after posting a ‘naïve’ twitter message stating that she would give £1 to the charity for every retweet.

45 minutes after making her pledge, the Labour MP thanked the 14,268 retweeters for their involvement and declared that she had no regrets, despite being ‘twitter naïve’.

She added “I knew it would be a lot but it was more than I expected, I had expected to give around £10,000 but there you go, it was a risk I took”.

Ms MacTaggart, who has represented Slough since 1997, is the daughter of the late multimillionaire property developer Sir Ian MacTaggart and inherited a large portion of his estate.

Speaking on the donation afterwards, the Berkshire MP said she wanted to come up with an interesting way of encouraging others on Twitter to donate to Comic Relief. However, she did attract some negative tweets from other users, with one commenting that she would ‘probably claim it back on her expenses form anyway’.

She dismissed this accusation as ‘sad’, but also added that she would not be posting any more Twitter donation pledges.

Primark family makes £42m donation

The Garfield Weston Foundation has received a welcome £42m benefit thanks to a rise in profits from the holding company of the Weston family, who are behind a number of businesses including the Primark retail chain.

Wittington’s profit rose from £585m to £601m in September 2012, prompting it to pay out £51m in dividends – up from £21m in 2011 – from which £42.23m went to the Foundation.

On average, around 1,500 organisations throughout the UK benefit each year from grants made by the foundation, including arts and education charities as well as London’s British Museum and the Royal Opera House.

To date, it has donated more than £680m to various charitable causes and was created by Garfield Weston, who was a founder of Associated British Foods, a FTSE 100 conglomerate that owns Primark, Silver Spoon sugar, Twinings tea and Kingsmill bread.

Royal Institution saved by anonymous donor

Thanks to an anonymous donation of £4.4m, one of the oldest scientific organisations in the world can hang on to its home in Mayfair, London.

Founded in 1799, the Royal Institution was originally intended to link science with wider society but has been facing some financial difficulties for a number of years. In January, the charity considered selling its 21 Albemarle Street home because of long running debt problems.

However in a recent statement the organisation’s chairman, Sir Richard Sykes, thanked the donor, and said ‘This donation is very timely and will clear the RI’s bank debt, as well as giving us the breathing room to explore other options more fully.”

He stressed though that the organisation’s financial situation was far from resolved. Members are also being informed about the latest efforts in developing a new vision for the RI.

This new approach is being led by the Future Direction Committee, chaired by the Labour peer Lord Winston and includes Professor Brian Cox and the President of the Royal Society, Professor Sir Paul Nurse.

The RI’s difficulties originally started five years ago with the decision to re-fit its 18th Century building, and provide an upmarket restaurant and bar on the site.

The £22m project was intended to help attract more people to the institution and promote its work. Unfortunately however, the move failed and resulted in a multi-million-pound debt that led to the sacking of its then president, Baroness Susan Greenfield.

Notable scientists such as Nobel Prize winner Harry Kroto, have called for a major effort to recruit fundraisers with a track record, and to turn the RI’s much criticised restaurant into a shop that sells electric motor kits and samples of elements discovered at the RI.

“I hope our representatives can succeed in bringing about a fresh approach which we all recognise will be needed for investment in the RI’s 21st Century role, as not only the primary UK science education centre, but most importantly the spearhead of a global science educational initiative,” said Kroto.

Next section: Report

Report: Future World Giving

The World Giving Index 2012 was the largest study of charitable behaviour to be undertaken across the globe. The survey draws on interviews with over 155,000 people and the Index is based on an average of three measures of giving behaviour – the percentage of people who donate money, volunteer their time and help a stranger in a typical month.

Based on this survey, the report introduces some key concepts for the CAF’s Future World Giving project and it identifies several key areas with the potential for philanthropic growth.

The rise of the global middle classes

According to OECD (Organisation for Economic Co-operation and Development) data, the number of middle class people around the world is projected to grow by 165% by 2030, with their spending power also set to increase by 161% over the same period. Crucially, 70% of this growth is forecast to occur outside the traditional philanthropic centres of Europe and North America.

With this in mind, it is thought that if governments put measures in place to facilitate philanthropic giving in the future, the results could be transformative. If, for example, the world’s middle classes donate 0.4 per cent of their spending to charity (matching giving in the UK) they would be contributing $224 billion to civil society per year.

To put this in perspective: $224 billion is more than the current Gross Domestic Product (GDP) of the Republic of Ireland, the world’s fourty-fourth largest economy. Strikingly, it is estimated that the total amount of foreign aid given over the past 50 years amounts to $2.3 trillion. Jeffrey Sachs estimates that extreme poverty could be wiped out if foreign aid reached just $175 billion per year.

Although this hypothetical future is based on prediction and economic trends, it is useful in highlighting the importance of acting now to harness the future potential of philanthropy.

The rise of the global super-rich

This potential does not solely rest with the middle classes, the report states, as a dramatic increase in the number of global super-rich, fuelled by developing economies, represents an opportunity to harness these huge incomes to address growing inequality. It is estimated that in 2011 there were 63,000 people in the world possessing $100 million or more in disposable assets.

This constitutes a 29 per cent increase since 2006 and is projected to rise by 37 per cent to 86,000 by 2016. It is estimated that these individuals control $39 trillion in disposable assets, with the top 100 richest billionaires adding $240 billion to their wealth in 2012 alone. If the right actions were taken to encourage others to give on the same scale as Bill Gates or Warren Buffet, their giving would eclipse even the above predictions for middle-class donations.

The changing geography of wealth

The report points out that by 2030, developing countries will have a greater share of global GDP adjusted for purchasing power parity (PPP) than the 34 members of the Organisation for Economic Co-operation and Development (OECD), which broadly constitute the world’s advanced economies. Based on this, it is therefore essential to ensure that governments in these emerging economies put the correct policies in place to remove barriers to philanthropy and encourage a culture of giving.

This dramatic shift in the geography of wealth will mean that the European and North American share of the global middle class will fall from 54% in 2009 to just 21% in 2030. There are now more centa-millionaires in South East Asia than both North America and Western Europe, and the number is expected to grow by 44 per cent by 2016. As such, it is important to move away from preconceptions of giving as a transaction that flows from West to East and from North to South.

The changing geography of wealth

While recent trends have shown that there is great potential for global philanthropy, it is important to remember that an increasing level of individual wealth does not guarantee that people in emerging economies will give at the same level as the world’s most generous nations. Although having disposable income is of course a pre-requisite, an increase will not necessarily lead to an increase in giving.

The World Giving Index 2012 revealed a number of differences in levels of participation in philanthropic giving between relatively affluent countries. For instance, the highest proportion of the population donating money to charity was seen in the Republic of Ireland (79%), despite being ranked 15th in terms of GDP per capita. In comparison, Luxembourg ranked first in terms of GDP but came 14th in terms of prevalence of giving money to charity (56%).

With such a wide variation in attitudes to giving, it is imperative that governments in advanced economies do more to facilitate a culture of giving.

Factors affecting participation in philanthropic giving

It is noted in the report that there are a variety of different factors which can affect giving. Religion for example can often play an important role as many have a form of tithing as a central tenet. According to the Giving Institute’s 2012 US Giving Report, 32% of charitable donations went to religious organisations in the US.

Demographics also have an impact on giving. On the face of it there does not seem to be a significant difference between the genders, with women being 0.8 per cent more likely to give money to charity than men according to CAF’s World Giving Index 2012. However, this global figure masks huge differences between individual countries. In Canada for example, 75 per cent of women gave money to charity in the last month compared to just 53 per cent of men, whereas 42 per cent of Afghani men donated money compared to just 24 per cent of women. Age appears to be a more stable predictor of philanthropy, with an established pattern of both men and women giving more as they get older.

Addressing some of these factors would require some significant societal changes, depending on the unique circumstances of each individual country. However, there are also a number of other factors that could easily be influenced by governments, depending on the policies that are put into place.

Accountability and transparency

It is also noted in the report that while there are a very large number of factors that can affect people’s giving behaviours, chief among these is the charitable cause itself. Indeed, most of these factors can be covered by one sentence: people need to trust that the money they give will be used effectively and for a good cause. This is why transparency is considered to be so important by philanthropists. CAF’s India Giving report for example shows that 52% of Indians feel that lack of transparency hinders donations to Non-Governmental Organisations (NGOs). As such, the fact that the Edelman Trust barometer shows that global trust in NGOs has fallen by 3% in the past year should be seen as a significant and worrying development.


Almost all of the most generous countries legislate to remove administrative barriers and also offer incentives to donors in the form of tax breaks. The significance of these incentives was highlighted by the 2012 Give it Back George campaign, because of which, an estimated £500m reduction in giving was prevented. Part of the reason more economically developed countries see a higher rate of giving (apart from the differences in personal wealth) is because it has been made more convenient.

It has long been the case that access to financial services and information about philanthropy has been restricted for the less affluent. However, with rapidly improving telecommunications infrastructure in the developing world, we need to think about how best to use new technology to involve people in giving. In addition, the CAF will be looking at the importance of providing more choice in how people can give. It may be that in an era of increasing personalisation of services, philanthropy needs to appeal to the individual.

To view the full version of the report, please click here.

Next section: Phi Database Update

Phi in Numbers: Database Update March 2013

This month, 5,460 new records have uploaded on the Phi database, and this latest data is made up of donations to Glasgow and Exeter University.

For this month’s database update, we’ve chosen to take a look at donations made to international development related causes from the years 2004 to 2011, which represents a minimum of £3.1b in donations. It should be noted that the data used is based on records as they appear in Phi, and as such the data is not necessarily representative of giving in the sector as whole.

Below, we have included two pie charts which display the percentage split in the number of donations made to international development according to year, and the spread of donations in terms of their value, per year.

As is demonstrated by the first chart, the largest number of donations were made in the year 2008, accounting for 33% of all donations made during this 8 year period. As the second chart shows, 2008 is also a significant year in terms of overall value, as donations from this period account for more than half (55%) of the total value of all donations made to international development across the entire period. The same is also true for the year 2010, with just 5% of donation accounting for a substantial 35% of all donations in terms of value.

When we look at these two years in more detail, it is interesting to note that these spikes in 2008 and 2010 have come as a result of some massive donations from wealthy individual donors, representing 98% £3b of the donations made to international development across the database.

When contributions from individual donors are discounted, donations to international development appear much more balanced across the database, as the second set of charts above show. However overall, it is interesting to note that these donations made by individuals account for such a large proportion of all gifts in this activity type.

Next section: Profile

Profile: The Gatsby Charitable Foundation

The Gatsby Charitable Foundation was founded in 1967 by David Sainsbury, who is a prominent philanthropist and a former Chairman of Britain’s third largest supermarket chain, J Sainsbury plc.

He began his career when he joined the company in 1963, he then earned his MBA from the Columbia Graduate School of Business in New York in 1971 before becoming J Sainsbury’s Finance Director in 1973, holding the position for 17 years. He was then appointed as the company’s Deputy Chairman in 1988 and became Chairman in 1992.

He left J Sainsbury in 1998 after being appointed as Minister of Science and Innovation for the Government. He had responsibility for the Office of Science and Technology, Innovation, Space, the Bioscience and Chemical Industries, and the Patent Office.

In November 2006 he left government after eight years’ service to concentrate on his business interests and philanthropy and he was recently appointed as Chancellor of Cambridge University in 2011.

To date, he has given the Gatsby Charitable Foundation more than £1b to distribute to charitable causes, which according to its website, are focused into six specific areas. These are divided into Plant Science Research, Neuroscience Research, Science and Engineering Education, Economic Development in Africa, Public Policy Research and The Arts.

The foundation has also supported causes associated with mental health in the past, and places an emphasis on innovation and providing sustainable support over a long term basis. It should be noted that initiatives in the Early Years or Primary Education sectors will not be considered, along with applications to support individuals or educational tuition fees.

In the financial year ending 05/04/2012, the foundation reported an income of £160m and an expenditure of £160m Factary Phi holds 88 records of donations made by the Foundation since 2007 and 2009, representing a minimum of £31.1m in funding.

Based on these 88 records of donations, the average size of donations made to different causes is £353,000 and the largest donation to be recorded in phi was £4.6m to the Gatsby Technical Education Projects in 2008.

The majority of these donations have been made into Education/Training related causes (40 records), followed by Arts/Culture (22), Children/Youth (8), International Development (6) and various singe donations into other activity types.

The Trustees

Judith Portrait

Judith Portrait is a Partner with Portrait Solicitors LLP where she specialises in private client practice, specialising in estate planning, wills and trusts/settlements and also in charities, both grantmaking and service-providing. Prior to this, she was a Partner with Denton Hall LLP until 1995 and she was most recently a Consultant with Denton Wilde Sapte LLP. She is also a Trustee of a number of trusts and other Sainsbury family settlements.

Sir Andrew Cahn

Sir Andrew Cahn is Vice Chairman of Nomura International, a Board member of Lloyd’s of London and Chairman of the Advisory Board of Huawei (UK). Prior to this, he spent most of his career in public service, focusing on commercial and economic issues in the Cabinet Office, the Foreign and Commonwealth Office and the Ministry of Agriculture, and three times working in the European Institutions in Brussels. In the 1980s he was a member of the Cabinet of Lord Cockfield, the British Commissioner who drove through the 1992 Single Market programme. In 1997, he was Chef de Cabinet to Rt. Hon. Neil Kinnock, Vice President of the Commission and prepared the blueprint for reforming the European Commission. In the 1990s, Sir Andrew worked at the heart of the British government, in the Cabinet Office, first as Principal Private Secretary to the Chancellor of the Duchy of Lancaster, then as Deputy Head of the European Secretariat.

Next section: News

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