We must embrace the rich when they give generously

£10m beneficiary: Beauty and the Beast at the National’s Cottesloe, to be renamed the Dorfman
12 April 2012

Last night, at the Victoria and Albert Museum, business and the City held one of the most spectacular charity fund-raisers of the year: the Soirée d'Or, in aid of scholarships to send talented musicians who otherwise could not afford to go to the Royal College of Music.

Earlier in the day, Princes Charles and William, together with a host of stars from stage, screen and sport, helped man the phones at ICAP, the City brokerage, which once a year turns its daily commissions over to good causes.

It's that time of year when London is awash with charity balls, dinners and auctions — when companies and individuals are pressed to dig deep. This year, too, there is added symbolism in the giving. At the V&A, those present included senior bankers from Goldman Sachs, Barclays Capital, Credit Suisse. There wasn't a table that didn't contain a star financial name.

Yet these are the same people and organisations who are pilloried for their wealth. They could feel justified in not turning up, in not bidding for the prizes, in not leaving eye-watering sums in the envelopes provided.

But then several pupils would be denied the musical education they deserve — and society would be the poorer.

This was also the same day that university students were finalising plans for their protests over today's Commons vote. More and more, universities are going to be turning to the private sector for cash.

And the day coincided with the Culture Secretary saying it was still not enough. In a key speech at the London headquarters of J P Morgan, Jeremy Hunt proclaimed 2011 as "The Year of Corporate Philanthropy".

Hunt began by saying that his appeal was not "simply a response to cuts in arts funding Nothing could be further from the truth." As he spoke, his nose visibly grew longer.

No, that did not happen. What Hunt said was that even before the economic crisis began he had been arguing for the UK to become increasingly philanthropic. In the US, cultural giving per capita is £37 a month, compared with just £6 here.

Hunt went on to outline a "10-point plan" which he hoped would persuade us to raise our game. While his comments were mainly directed at the arts, he made it plain that ministers were looking for more donating generally. The Government "will be reviewing what it can do to remove barriers to giving".

He set out his 10 points for the arts, which included: an £80 million match funding scheme, so the Government matches every £1 raised with £1 of taxpayers' money; more visible recognition for philanthropy, possibly using the honours system; developing fund-raising skills; supporting long-term development of endowments; and seeking more investment from business.

It wasn't bad — but it wasn't enough. Much more needs to occur before the UK can even begin to hope to move towards the American level. In the US, as Hunt said, supporting the arts and charities is deep-rooted.

It is in the UK to an extent, oddly, among those who are not so well-off. Three-fifths of Britain's biggest donors — those giving more than £100 a month — have incomes of less than £26,000 per year. Those who give the most are often those who have the least. In the US, by contrast, those who earn more than £150,000 give eight times more than their UK counterparts.

We have to ask ourselves why that should be: why should our rich be so less generous than theirs? One reason is that we do not appreciate the wealthy as much as America does.

In fact, in recent years, we've become gripped by envy, obsessing about how much people earn and how they made it. Add to that scandals such as cash for peerages and we've grown cynical and suspicious to those with wealth spreading it around.

The effect has been to drive much of our philanthropy underground. Tom Hughes-Hallett, the former banker who now runs Marie Curie Cancer Care — a body for which he must raise a budget of £135 million from scratch each year — says: "We need to make people think that it is OK to tell the world they have given money, because then the peer pressure will begin to build."

In the US, every town has a library, hospital, theatre named after a local benefactor or their foundation. Public buildings contain boards listing the sponsors, as a matter of course. That prominence in turn enthuses others to give, so that donating becomes the rule rather than the exception.

We should find different ways of giving. In the arts that has to mean schemes similar to the one at the National Theatre for £10 seats subsidised by Travelex, the foreign exchange company. That relationship has been hugely beneficial to both sides — so much so that Travelex founder Lloyd Dorfman is parting with £10 million of his own fortune for the South Bank complex's redevelopment; in return, the Cottesloe auditorium will be renamed the Dorfman.

Above all, we have to change our tax system. We've got Gift Aid but it is hideously complex. Anyone donating a substantial amount is subjected to the third degree from HM Revenue and Customs. The form-filling and bureaucracy that accompanies what may be a spontaneous act of generosity is ludicrous.

In the US, tax breaks are available for philanthropy. There's no secrecy or stigma attached to them — they're built into the taxation regime and their use is regarded as entirely normal.

That was the aspect of Hunt's speech that was most tellingly lacking. The nearest he came to conceding reforms was when he said: "We know that there is a huge amount of frustration around the existing rules." He can say that again.

Hunt went on to stress how he and his colleagues wanted to "foster a wider culture of giving". But mere words will not suffice. If the Government is serious about turning Britain philanthropic, then it has to do its bit as well. Waiting for the outcome of a review and further delay and obfuscation are not the answer. Ministers, particularly those from the Treasury, also have to learn to give.

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