The City’s new boom market: philanthropy

Simon Nixon

18 November 2006

But what if you’re a billionaire with money to give away but no idea who to give it to? Fear not. Alongside outfits like New Philanthropy Capital, top investment banks now offer their high net worth clients help in this field. Citigroup, for example, has a global philanthropy advisory unit which uses its worldwide contacts to identify projects for its richest clients — people with an average of $50 million in the bank. ‘The clients love it,’ says Chip Raymond, head of Citigroup’s philanthropy unit. ‘They’re just as interested in discussing their charitable work as their investments.’

Not everybody is comfortable with the all this. ‘They’ve got to be careful,’ says Geoff Mulgan, former head of Tony Blair’s strategy unit and director of the Young Foundation. ‘If givers start to demand too much power over the way services are provided, they’ll start to become resented. They should study history. The 19th-century Charity Organising Committee became deeply hated. It was seen as an upper-class plaything and dubbed Lady Bountiful. There’s been a big move over the last 20 to 30 years to make charities more accountable to their beneficiaries. It would be a mistake to try to reverse that.’

Besides, people need to keep a sense of proportion about what philanthropy can achieve, says Mulgan. Right-wingers may fantasise about a new generation of engaged citizens rolling back the frontiers of the state, but it’s not going to happen. ‘Even if charitable giving in Britain was to double to 1.4 per cent of GDP, it would still be dwarfed by the 42 per cent of GDP swallowed up by the state. People don’t want charities to usurp the state as the core provider of social services. Don’t forget, in the last three elections, people clearly voted for more spending on public services, not less.’