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  1. Impact Philanthropy
October 5, 2011

Ed Vaizey on Philanthropy: How to encourage the wealthy to give more

By Spear's

Culture minister Ed Vaizey MP gave the Spear’s Talk on philanthropy at the Conservative Party Conference: ‘How to encourage the wealthy to give more.’ He spoke to an enthusiastic audience of philanthropists, politicians, journalists and workers in the charitable sector, encouraging philanthropists to give more and charities to deal with donors better.

Download Ed Vaizey’s full talk on philanthropy

Here are some key quotes:

I think the British public is extraordinarily generous but I think William’s point was well made: it is ironic that it is the people at the low end who tend to give a greater proportion of their income than those at the higher end of the income scale.

I think that there is a difference between UK and US culture. I think there is a much greater culture of self-reliance in the US and a much greater recognition that individuals and corporations can make a huge difference to their local or national environment supporting or giving to projects.

We have an honours system in this country because people who do well and are successful in business quite rightly receive honours and that is our way of recognising their achievements and that doesn’t exist in America, and there is a culture there where people self-recognise their achievements by donating significant sums to institutions which bear their names so they can live on forevermore.

We don’t regard fundraising and philanthropy as a substitute for government support for the arts. I think we’re very lucky in this country to have what is known as the arts ecology, the three-legged stool of support which is Government subsidy, philanthropy and commercial income.

Our push on philanthropy is not to substitute government support but it’s very much a focus on sustainability.

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If you go and fundraise and ask people for donations through their business or individuals, it’s not simply a question of asking them for a cheque so that you meet a target that you may have set yourself, it’s actually about building relationships.

We have I think two big problems in this country in terms of philanthropy and change. The first comes from art organisations. I’m going to be very frank about this: I think too many arts organisations in this country think the conversation with a donor ends when the cheque is written. They go for the money, they get the cheque and thanks very much.

Arts organisations have to understand that it is not grubby to ask for money, it’s a massive opportunity not just to raise money but to build relationships with people who believe in the organisation and can actually bring a hell of a lot more than just money to the table.

Frankly not enough chief executives of arts organisations realise that they are the lead fundraiser for their organisation. If you as the chief executive can’t be bothered to engage with people who might fund the work you do, why the hell should anybody write you a cheque? There needs to be a big culture change.

The second culture change comes from Government in the sense that we should celebrate people who give money and give money to arts organisations. I see absolutely nothing wrong if you give a large sum of money to have your name on a wall, it’s a celebration of a contribution that you’ve made to that arts organisation.

We do have a relatively generous tax system in this country in terms of giving a write-off donation against tax returns. Gift Aid remains, in my personal view, too complicated but that is a matter for the chancellor and Charities minister to address.

The other change which I think is important is the change of the acceptance of new arrangements so that people can give a painting when they’re alive and set it off against tax. The full details of that change are not yet announced, but the principle has been approved and people have been looking for this for a very long time.

Jeremy and I recognise that for many of these organisations, this could be a hundred-year project to build a significant amount of endowments and end up with a significant proportion of income, so the Year of Corporate Philanthropy is an important phrase to kickstart the agenda, but I would rather a five-year, ten-year, fifteen-year, twenty-year agenda for philanthropy, which is long overdue.

I gave a talk to arts organisations this afternoon and obviously when you’re talking to arts organisations there’s a bit of give and take and I did say in a moment of frustration that you can bump into a donor in the street. This is obviously going to become a tagline about what I talked about in terms of philanthropy. If you treat people well when they walk through your door, you never know what will come out of it, and what I mean by saying you can bump into a donor on the street is that arts organisations should be always on.

If you go and talk to American arts organisations, every single conversation they have about their exhibition or whatever it is, they have to use this for an opportunity to engage with donors. You talk to American arts institutions and they will say they go on holiday with their donors, by which they mean they understand the shared value that comes from working with donors and they become friends with their donors, so my message to arts organisations in this country is we will put in place the ecology that will make it easier for you to raise money, but you have to do your bit and you have to be always on and you may well bump into your next big donor just walking down the street.

I think we have a different culture and I think we don’t like to talk about money and that is a huge cultural problem. We do tend to be self-deprecating and modest but I think the downside of that culture if you like, again the comparison with America suggests itself, the celebration of success in America as opposed to potentially the denigration of success in the UK.

I do think it’s important as it were for someone in my position to be unashamedly pro a relationship with donors where donors get something back, where Lloyd Dorfman is allowed to give £10 million to the Cottesloe and they say that it’s now going to be called the Dorfman Theatre and for people not to jump up and down and say that’s a disgusting, outrageous abuse of a donation.

I certainly think boards themselves should encourage people who are on their boards to give. It’s the American motive: give, get or get off, as in give money or get someone to give money or get off the board.

When I talk about philanthropy from a perspective of culture, obviously one tends to think about John Sainsbury giving £25 million to the British Museum, but actually a lot of arts organisations can survive on £100 a year donations or regions in that sum from very many people.

It’s about being seen in the community, about reducing, taking down the walls and letting people in, and people who want to give money need to feel that they are involved in the organisation, that they have a stake in the organisation. Too many organisations I think feel that they’ve done the job when they’ve got the cheque but actually the conversation is just beginning and people shouldn’t be afraid of that.

As I said earlier, although I was slightly chippy about it, when I raised my small sum of money to give to local charities I made sure I gave it to an existing charity to administer rather than trying to set one up on my own. I’m completely conflicted: on the one hand you’ll meet people who’ll suddenly say they’ve got this passion and they’ve started this wonderful charity so you want to say that is absolutely marvellous and you want to give money to this cause, but the other side of you thinks why the hell did you give it an existing charity? You can sit down and have a conversation and say I want to give you this money but I’d like to set some boundaries as to how you spend it.

(Should there be a guide rating charities?) I would call it a Zagat Guide or a Hardens Guide because you could do a star rating, you could rate charities on various things. I think that would be a wonderful thing to do.

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