Charity in the 21st Century and Beyond
“We make a living by what we get, but we make a life by what we give." An astute observation, one of Churchill’s less controversial. Ideally, we would live in a world with no need for charity but as it stands, it is a vital part of our society. There are multiple ideas for how charity may develop in the near future and many seem plausible. Contemplating this issue can also give an insight into what we should do to make the future a little brighter.
Sir Victor Blank has argued in favour of socially aware capitalism, advocating the power of corporate social responsibility to tackle current issues we face such as poverty, disease, climate change, and supporting those disadvantaged. As the former Chairman of Lloyd’s his approach is unsurprising. A career at the top of numerous corporations and institutions has likely emboldened his belief that business is the key mechanism for societal change. He has seen the value of campaigns that these companies have run and has seen the huge sums of money that can be mustered when asking the right people. The four foundations funded by Lloyd’s had total contributions in excess of £390m between 1997 and 2010, he was Chairman from 2006. Increasingly companies are recognising the duties that they have beyond profit and this money has almost certainly made a huge difference to many lives.
Building on this idea, in August this year The Business Roundtable released a new “statement of purpose”, placing shareholders as one of five stakeholders, alongside customers, workers, suppliers and communities. Through this new framework they made a pledge to tackle climate change and social issues. The BRT has close to 200 members, including the chief executives of JPMorgan, Amazon and General Motors, which generate $7tn in annual revenue, and a genuine change in approach from its members would initiate a real global transformation. But there are real doubts over the motivations of these companies. An obvious flaw in the statement is the lack of measurable commitment or enforcement tool. Similarly, viewing the statement cynically might yield the idea that companies are merely doing this to capture public sentiments, utilising social movements as marketing tools and then continuing to maximise profits, especially as firms receive tax breaks on donations. One important thing to note is that 26 FTSE companies collectively donated £1.3bn last year but these 26 were the only FTSE companies who gave more than 1 per cent of their pre-tax profits to charity. Firms clearly therefore have so much more they could do. Sir Victor’s ideas definitely are valuable, and it appears that we might be making progress towards his vision of the future. However we ought to remain sceptical of companies that continue to make such vast profits when that wealth isn’t seen by so much of the world.
Very few would argue that companies shouldn’t do more, however it is important to remember the role that personal philanthropy can play alongside that of institutions. The UK suffers inequality like much of the rest of the world; 42% of all disposable household income in the UK went to top 20% of households by income, while only 7% went to the lowest-income 20% in 2017/18. The share of income going to the top 1% of individuals by household income increased during the 1990s and 2000s and has stayed constant since. For many at the upper end of this distribution, it might be worth taking an honest account of expenditure and examining what is really needed. This is not intended to be judgemental of wealth or class at all. In fact, the near future might see climate change force people to rein in environmentally unsustainable spending, which also happens to be a large proportion of expenditure. Doing this might allow money that isn’t really improving quality of life for one person to transform the existence of another.