Philanthropists Put a Price on Good Deeds
A question that is becoming more pertinent in these straightened economic times is whether it is possible to measure charitable initiatives the way businesses measure their profits.
Can good deeds be assessed and quantified in this methodological manner, or does it take more than a calculator to put a price on philanthropy?
Many would argue that there are some things that just can’t be evaluated, that the work of some charities is impossible to be weighed up in this manner, even with the most sophisticated of measurement tools and indexes.
However, when we see shifts in government spending putting unprecedented pressure on many charities’ finances, it has undoubtedly become even more important for charities to take an evaluative look at their work – particularly if they want to engage with new private funders.
This type of ‘ambitious’ funder is becoming more active in the philanthropic space and is increasingly inquisitive to see just how effective their donations are as well as the impact they are making.
As Head of Client Philanthropy at Barclays Wealth, my role is to work with our high net worth clients and support them in their ‘giving journey’. This means helping them to be better informed about this sector in order to help channel their aspirations to ‘give back’ either with money, time or both.
There are many types of funders who are looking to support a variety of causes, all for very different reasons, and these are important considerations when guiding funders to the most suitable approaches for them.
Closer to Home
Through my work, I have often seen that when a downturn takes hold and times grow tough, there is not only a raising of social conscience but charitable giving can move closer to home as an even wider group of people is affected.
The wealthy individuals and entrepreneurs I come into contact with are now becoming more aware of the benefits in putting much-needed funds back into communities to help tackle difficult social problems, not to mention the necessity of ensuring these funds have a lasting effect on the individuals.
This emerging type of philanthropist use their enterprising abilities—which have often played a key part in building their wealth in the first place—and apply them to charitable giving.
They are more ambitious in their aims and willing to fund alternative, sometimes experimental approaches, including pilots, which public sector bodies are less able to back.
Recent events in the UK have shown that there is a clear need to look at how we approach entrenched social problems, and the scope for these wealthy individuals to make a difference has potentially never been greater—both on an individual level, and in terms of delivering wider cost savings to an already stretched state.
A recent report we developed in association with charity think-tank and consultancy New Philanthropy Capital (NPC), entitled "Early Interventions: An Economic Approach to Charitable Giving," analyzed three of the costliest social issues in the UK.
The cost impact of these three issues – children with conduct problems, adults out of work due to mental health problems and chaotic families – were found to approach 100 billion pounds ($157 billion) each year. However, the report found that early interventions and private funders taking preventative approaches can cost a fifth of current social support.
We strongly believe that private funders have an unrivalled capacity to fund initiatives that the government cannot. This growing group of funders, who we call the Change Makers, understand that the current method of responding to social problems only once they reach crisis point has limited success and they are willing to take risks on new philanthropic initiatives that address the root cause of problems, rather than just the visible symptoms.
We believe it is this group of funders who will be best place to drive the new form of social philanthropy.
In bringing these difficult issues, which are often neglected, to the attention of funders – we need to provide powerful reasons for why they should invest in these interventions and what they can achieve by doing so.
If we want to tackle some of society’s biggest problems, and persuade funders to choose routes such as early intervention funding, we have to find new and better ways of making the argument more compelling. This is where we believe that charities can play a part in also taking a more economic approach to their work.
Many charitable initiatives already subscribe to this thinking, and agree that having work which is fully informed and properly evaluated is essential in order to secure donations from private funders. It is crucial now that more charities adopt this approach to increase the longevity of their undoubtedly valuable work.
Above all, investors understand this black-and-white breakdown of costs, savings and results, and although philanthropy has decidedly more grey areas, the new breed of Change Makers are now expecting to see measurable impact from their donations.
The author is Emma Turner, Head of Client Philanthropy at Barclays Wealth