Centre for Charitable Giving & Philanthropy - Individual & Business Giving Spoke

Lead Research Organisation: University of Strathclyde
Department Name: Business School

Abstract

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Description The over-riding aim of the project was to develop an understanding of the nature of entrepreneurial philanthropy within contemporary society. Recognising that current involvement of entrepreneurs in philanthropy is not new, Phase 1 of our study sought to understand the historical context of and the roots from which philanthropic endeavours of high net worth contemporary entrepreneurs has evolved. Analysis of the philanthropic activities, impact and outcomes of Andrew Carnegie and other world-making entrepreneurs contributes to an understanding of entrepreneurial philanthropy as a world-making process through which already successful, wealthy entrepreneurs use their power to accumulate more power, extend their social and political influence, and increase their capacity to shape society according to their will. Significantly, our findings challenge conventional definitions of philanthropy as an altruistically-motivated, distributive process and our empirically informed conceptual framework, A Capital Theoretic Model of Entrepreneurial Philanthropy highlights the accumulative nature of a process which benefits philanthropists as well as beneficiaries.

In phases 2 & 3 we sought to acquire an empirical understanding of the nature of contemporary entrepreneurial philanthropy in the UK. Using publicly available sources, we first constructed a database from publically available sources which we used to analyse the types of entrepreneurs who engage in significant philanthropy including their demographics, the extent and amount of their philanthropic endeavours, the vehicles through which they channel their philanthropy, the communities and sectors towards which they direct their philanthropy and, in addition to money, the other forms of capital (social, human and symbolic) they employ and leverage when engaging in philanthropy. We restricted this database to 100 UK entrepreneurs over the period 2008-2010 all of whom had: made their fortune from business ownership or had used inherited wealth to establish successful businesses and, by 2008, had both accrued a minimum personal wealth of £10m and redistributed a minimum of £1mn of this. Analysis of this complex set of data revealed that most philanthropists were men (88), aged 46-65 (mean = 60), most of whom (94) were self-made. 59 had established a foundation as a formal vehicle for their philanthropy and, of these 16, were established prior to 2000, with the oldest created in 1972. Philanthropic giving is concentration in education and young people and despite 28 having a publicly declared religious affiliation, only 10 directed their philanthropy toward religious beneficiaries. The mean net personal wealth was found to be £268m (likely to have been inflated by 10% who were billionaires). Regarding institutionalized cultural capital (qualifications): only 25 held no formal qualification; 52 had an UG degree and of these, the majority were awarded a Russell Group university as were all doctorates (4); of those holding an MBA (8), 7 were from an Ivy League university, mostly Harvard (7). 39 entrepreneurs were found to have a history of business ownership and/or involvement in several businesses and all were found to share at least 1 relationship with a person of influence (a person holding a position of power within their respective field) with the average number being 3. Findings indicate that these contacts are concentrated in the field of politics (51) and philanthropy (27 contacts). Interestingly, the leaders of all three major UK political parties are identified 24 times, and several high-profile, globally powerful individuals, including Bill Clinton, Nelson Mandela, Kofi Annan, Tony Blair and Archbishop Desmond Tutu were also mentioned. Findings regarding symbolic capital reveal that Entrepreneurial philanthropists (EP) possess significant amounts of numerous types of symbolic capital; 13 knighthoods; 11 CBEs; 13 OBEs, 3 MBEs, 44 Honorary Degrees; 10 Russell Group Fellowships, 3 Beacon Prize Winners; 52 business awards and 8 awards for philanthropy. Collectively, these findings suggest that contemporary UK EPs receive significant public recognition and support our conclusion that philanthropy is an accumulative process which can accrue many and multiple benefits for philanthropists.

Life story interviews (phase 3) with a smaller sample of 30 of these EPs (10 with net worth of more than £100 mn; 20 with net worth £10-99mn) together with 20 depth interviews with their foundation executives, wealth advisors and also policy makers provided rich, detailed insights into the philanthropic activities of contemporary UK EPs and, by developing detailed case studies, we were able to explore in greater detail the findings to emerge from Phase 2. Key findings include: the variety and complexity of motivations for redistributing vast sums of personal wealth; entrepreneurs' personal reflections on the multiple personal and societal benefits which accrue from their philanthropy; the multiple forms of capital which entrepreneurs draw upon and leverage when engaging in philanthropy - while economic capital is an essential 'entry ticket' to world making philanthropy, the importance of cultural (experience and education), social (contacts) and reputational or symbolic capital should not be underestimated. We find that this combination of forms of capital are essential if the philanthropic activities of entrepreneurs are to be significant, affect sustainable societal change and accrue multiple personal and business benefits for EPs. These interviews also reveal much about entrepreneurs' 'Journey to Philanthropy' indicating that entrepreneurs rarely become world making philanthropists and instead start small and local and learn about the process of philanthropy and potential multiple benefits before progressing to both larger scale and more formalised philanthropy involving a vehicle such as a foundation and professional wealth and philanthropic advisers. An additional important finding was what interviews revealed about the scale and scope of the UK's philanthropy landscape. We find that philanthropy in the UK is at an early stage of development with variable levels of specialised advice and support. For example, many of the wealth advisers we interviewed indicated a need for better training to enable them to provide appropriate, specialised philanthropy and wealth redistribution advice including appropriate tax advice. Throughout our study we also collected data from international comparisons including India and Australia: these provide interesting insights into alternative philanthropic ecosystems and indicate that more research on the effectiveness of the Australian philanthropic ecosystem may be beneficial for encouraging more and better philanthropy within the UK.
Exploitation Route We have so far disseminated our findings widely, using a number of formats to reach various audiences including research, practitioner and policy communities. Included in this package of dissemination we have: used the CGAP website; written book chapters; hosted an ESRC Festival of Science event; published papers in leading peer reviewed academic journals; hosted and contributed to engagement and impact events with entrepreneurs involved in or planning for philanthropy and also wealth advisors; we have hosted or contributed to workshops with support and intermediary organisations including community foundations. A full list of all conference papers and publications is detailed in the Outcomes section. Throughout the research we have increasingly engaged with and become embedded within Scottish, UK and international philanthropic circles. As a direct consequence of our research, we have offered advice to a range of organisations including Foundation Scotland, the Scottish Government, the Community Foundation for Tyne & Wear and Northumberland, Community Enterprise in Scotland, Social Investment Scotland, Inspiring Scotland and the Scottish Family Business Association. We now sit on the boards of several of these or advisory committees reporting to these organisations including the New Zealand Centre for Social Innovation. At the time of writing, we are working in collaboration with both Foundation Scotland and the Scottish Family Business Association to develop a programme to support entrepreneurial philanthropy in Scotland by providing education on philanthropy and mechanisms for connecting philanthropists motivated to engage in philanthropy. Going forward we intend to continue to use this package of means for disseminating our research across all relevant communities.
Sectors Communities and Social Services/Policy,Creative Economy,Education,Financial Services, and Management Consultancy,Other
URL http://www.cgap.org.uk
 
Description The research funded by this grant provides an understanding of the reasons why entrepreneurs engage in philanthropic activities and provides insights into the process of their involvement in philanthropy from initial small scale, local activities to, for some high net worth entrepreneurs, engagement in philanthropic activities on a global scale. Throughout the research it was essential that the research team became embedded within communities from which they could access entrepreneurs engaged in philanthropy and others involved in advising and supporting such entrepreneurs. This meant that from the start of the research, the team initiated a variety of engagement events to first build awareness of the research and, over time, to disseminate emerging and final findings, particularly to those entrepreneurs and support organisations and individuals who took part in the research and helped the team secure access to participating entrepreneurs. Given the confidential nature of the research ( it asked questions about personal net worth and the redistribution of this for philanthropic purposes), participants were assured that their identities and other research findings which could link them to the research would remain confidential; given this it is not appropriate to identify the individuals who participated in the research including engaged with the research team to learn more about the research, its findings and their economic and social impact. However, in discussing the planned research and disseminating initial and final findings the team have, to date, engaged with a variety of audiences and contributed towards economic and social impacts as summarised below. Increasing public engagement with research and research related societal issues The team secured public engagement by presenting and discussing their work at the following public and philanthropic events: CGAP Conference, Keeping philanthropy's promises - today's austerity, tomorrow's riches? London, 2013. Newcastle Institute for Social Renewal, Contemporary Philanthropy and Social Renewal: learning from research and practice, Newcastle, 2013. ESRC Festival of Social Science, Social Investment for the 21st Century, Glasgow, 2012. Panel Session, Dimensions of Giving: from going it alone to the embedding of giving and philanthropy within social structures, NCVO/VSSN Researching the Voluntary Sector Conference, Leeds, 2010. Centre for Charitable Giving and Philanthropy, Inaugural Conference, London, 2010. European Network of Philanthropists, London, November 2009 ESRC/NCVO Public Policy Seminar, Edinburgh, 2009 Additionally, throughout the duration of the project and since, the team has held numerous meetings with public-facing organisations during which they have discussed the research, its findings and its implications. Examples include discussions with Community Foundation for Tyne & Wear and Northumberland, Inspiring Scotland, Foundation Scotland, International Network of Street Newspapers, Oxfam, Scottish Family Business Association, Scottish Government, Social Investment Scotland. We also discussed the research and, as it progressed, its findings, with Chief Executives of numerous Foundations established by entrepreneurs and also with wealth advisers working independently or with banks, accountancy and legal firms including Coutts, RBS, HBOS, HSBC, Adam and Company, JP Morgan. Wealth creation, economic prosperity & regeneration Key findings to emerge from our study relate to the impact which entrepreneurial philanthropy can have on economic and social prosperity through entrepreneurs' active engagement in wealth redistribution. These findings have strong implications for the practice of entrepreneurial philanthropy including for entrepreneurs, wealth advisers, professional philanthropic advisers, community and charitable organisations seeing philanthropic gifts and governments keen to support a more philanthropic culture within the UK. Central to our research was a focus on investigating the redistribution of the personal wealth accumulated by entrepreneurs. This meant that we also had to understand how wealth is created (before it can be redistributed). A key finding to emerge from the study is the inter-relationship between wealth creation and wealth redistribution. These are rarely separate processes; instead, entrepreneurs identify an interplay between wealth creation and wealth redistribution. Simply put, before engaging in philanthropy, entrepreneurs need to accumulate surplus wealth and, once engaged in philanthropy they do not stop accumulating wealth but instead, often identify a relationship between philanthropic activities and ongoing wealth creation. Related to this we also found that when entrepreneurs engage in philanthropy they do so gradually often starting by making smaller philanthropic gifts to local organisations before progressing their 'philanthropic journey' to give more, to sometimes give more publicly and to consider giving on a geographically larger scale. For a small number of entrepreneurial philanthropists, the opportunity to become a 'change agent' possessing, as a result of their philanthropy, influence over policy and public interventions is a strong motivation and, for them, an important destination in their philanthropic journey. In this way, entrepreneurs learn how to be philanthropic, how to be a philanthropist and, importantly for them, how to engage in philanthropy in a way that has impact: economic, social or environmental. We found that as entrepreneurs make this journey, they seek professional help from wealth advisers and other philanthropic professionals such as Community Foundations, to become 'better' philanthropists often by setting up more formal processes and vehicles, such as foundations, through which to channel their philanthropy. Concerning the redistribution of wealth, our research confirmed that when entrepreneurs engage in the redistribution of their wealth, this is rarely restricted to their economic wealth. Instead, when entrepreneurs engage in philanthropy, we found that they apply similar principles to those used when making business investments: to ensure their philanthropic gifts have economic, social and/or environmental impact, entrepreneurs typically also gift their social, human and reputational capital. Particularly as entrepreneurs' progress along their philanthropic journey, gifting more money with a broader geographic reach, we find they become more actively engaged in their philanthropy through levering their economic, social, human and reputational capital for philanthropic purposes. Collectively, these findings have implications for entrepreneurs, their wealth advisers and other professional philanthropic advisers including Community Foundations, fundraisers and University alumni and development Offices. The research team have discussed these findings with organisations including the Community Foundation for Tyne & Wear and Northumberland, Inspiring Scotland, Foundation Scotland, Oxfam, Scottish Government, Social Investment Scotland and wealth advisers working independently or with accountancy and legal practices or banks including Coutts, RBS, HBOS, HSBC, Adam and Company, JP Morgan. These findings have also been discussed with respective University Alumni and Development Offices to provide a broader understanding of both what entrepreneurs mean by wealth (not just economic) and also an awareness of the interplay between wealth creation and wealth redistribution. Enhancing the research capacity, knowledge and skills of public, private and third sector organisations Throughout the project, the research team had numerous and multiple conversations with public, private and third sector organisations, sharing with them the knowledge acquired about entrepreneurial philanthropy. In particular, the team have discussed the implications which these findings have for improving the philanthropy advice available to entrepreneurs from wealth advisers. Specifically, the benefits of providing wealth advisers with better training and development in the areas of philanthropy and wealth redistribution have been discussed with private wealth management companies, University Alumni and Development offices and also with third sector organisations including foundations and charities such as Oxfam. In particular the research found a need for wealth advisers to be better informed about the implications which the intergenerational transfer of wealth can have for ongoing philanthropy and JP Morgan was identified by the research as an example of best practice in this respect from which other wealth advisers, particularly within the UK, could learn from. Evidence based policy-making and influencing public policies As the research progressed, the research team have been invited by policy-making and policy-influencing advisers and organisations including advisers within the Scottish Government, Foundation Scotland and National Council for Voluntary Organisations to discuss the implications of research findings for policies and interventions which can encourage a greater and better culture of philanthropy within the UK. To date, most of the requests from government advisers have focused particularly on how to encourage more philanthropy within the education sector, particularly Higher Education. However the research findings did not identify a propensity for UK entrepreneurial philanthropists to channel their philanthropy towards this sector. An exception is the Hunter Centre for Entrepreneurship at the University of Strathclyde which was established following the generous endowment gifted to the University by Sir Tom Hunter, a graduate of Strathclyde Business School in 2000. The research team continues to work with the Hunter Foundation, informing them of research findings and discussing potential policy implications of these. Together with other research partners across the Centre for Charitable Giving and Philanthropy (CGAP), the research informed debates over the capping of charitable tax relief proposed in the 2012 Budget. These public debates together with lobbying on the part of charities and other organisations involved in and supportive of fundraising and philanthropy, including CGAP, led to a U-turn on this proposal less than a week after its announcement.
First Year Of Impact 2009
Sector Communities and Social Services/Policy,Creative Economy,Education,Financial Services, and Management Consultancy
Impact Types Societal,Economic,Policy & public services
 
Description ESRC Seminar Series
Amount £26,650 (GBP)
Organisation Economic and Social Research Council 
Department ESRC Seminar Series
Sector Academic/University
Country United Kingdom
Start  
 
Description Research activity with Massey Univerdity, New Zealand 
Organisation Massey University
Country New Zealand 
Sector Academic/University 
PI Contribution Written two chapters and guest edited two special editions in social entrepreneurship
Collaborator Contribution Jon writing and research
Impact Two book chapters Two editorship if special issues
Start Year 2010
 
Description Disseminate and discuss findings from CGAPmprogramme of work 
Form Of Engagement Activity Participation in an activity, workshop or similar
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact About 120 people attended this one day workshop to present and discuss implications emanating from our programme of research
Year(s) Of Engagement Activity 2012
 
Description ESRC Seminar 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact 36 people attended this ESRC Deminar which discussed different approaches to philanthropy and encouraged debate and discussion.
Year(s) Of Engagement Activity 2016
 
Description How new is entrepreneurial philanthropy? 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other academic audiences (collaborators, peers etc.)
Results and Impact Presentation to Research Seminar

None recorded
Year(s) Of Engagement Activity 2010
 
Description Innovation & the 3rd sector 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Other academic audiences (collaborators, peers etc.)
Results and Impact This presentation was delivered ESRC/NCVO Public Policy Seminar, 'Innovation and the third Sector', Edinburgh, 20th March 2009

None recorded
Year(s) Of Engagement Activity 2009
URL http://www.esrc.ac.uk/ESRCInfoCentre/Images/Dr%20E%20Shaw%20presentation_tcm6-31337.pdf