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3 August 2013

Why give?

Tag(s): Sustainability, Philanthropy
Last week I attended a luncheon at Mansion House in the presence of the Rt Hon the Lord Mayor Roger Gifford. He gave an excellent and amusing speech but earlier in the year I heard him give an even better one in the sequence of Lord Mayor’s Annual Gresham College Lectures at the Museum of London. He spoke on the theme ‘Why give? The case for investment in excellence in arts and music, building on London’s tradition of philanthropy.’

Mr Gifford is the 685th Lord Mayor of London and he has been an Alderman since 2004. He is a merchant banker by profession but as all such persons who reach the chair of the Council of Aldermen he has many strings to his bow and is in fact a musician. He made the case that humanity has progressed with Arts and Music citing ancient examples of Palaeolithic cave paintings from 40 millennia ago and mammoth bone flutes from 37,000 years ago.  Gresham College itself was founded in 1597 from the estate of Sir Thomas Gresham who had died in 1579. Sir Thomas, a liveryman of the Mercers’ Company, became a great financier and advised Edward VI, Mary Tudor and Elizabeth I and was also responsible for building the Royal Exchange, effectively the first bourse, where he continued to make profits by charging rent to the shopkeepers on the first floor.

Roger cited the great Andrew Carnegie’s philanthropy. Carnegie said you should spend the first third of your life getting the best possible education, the second making as much money as possible and the last third giving it away to good causes. He proceeded to do just that and donated over US $350 million to charities, a vast sum in those days.

His modern equivalent might be Sir Michael Moritz and his wife who having made a fortune out of various internet businesses including Google, PayPal, Plaxo and YouTube, first gave US$50m to Christ Church, Oxford, his former college, the largest single donation in the college’s history, and then in 2012 it was announced that he had donated £75m to Oxford University to support students from families with an income below £16,000 per year. He is a signatory of The Giving Pledge committing himself to give away at least 50% of his wealth to charitable causes. Earlier this year he gave $5m for Juilliard’s Music Advancement Programme. Having invested in businesses he is now effectively investing in excellence in education.

Peter Bazalgette, Chairman of the Arts Council, has made the economic case for investment in UK Arts and Culture. It generates £225m Gross Value Added (GVA) for the City of London and 6700 jobs. UK turnover of the arts exceeds £12.4 billion with £5.9bn GVA. It creates 260,000 FTE jobs, 1.1% of all UK jobs and involves 10 million visits to theatres, concert halls, museums and so on generating £7.6 bn. 231,000 children and 80,000 adults actively participate in some form of the arts.

Roger holds firmly that such activities are elite but not restricted to the elite and rails against the imaginary barriers of elitism. In London the Royal Ballet, the London Symphony Orchestra, the Royal Opera, the Barbican and the Guildhall School of Music and Drama, as well as many other institutions, all have extensive outreach programmes to schools and other organisations in disadvantaged communities.

London is a treasure trove of the arts unrivalled anywhere in the world with 857 art galleries alone. Each year there are 32,000 theatre performances and 17,000 musical concerts. The LSO has residencies with 44 international partners.  The Barbican Centre as a whole gives 95 music performances a year of which 70 feature international artists. 413 other performances of the arts are given, 972 film showings and several exhibitions. Last year 39 new pieces of work were commissioned.

But despite this the Department for Culture, Media and Sport (DCMS) has reduced public funding for the arts by £300m. The Arts Council alone has had its budget cut by 30% and in addition Local Authorities, who provide much of the funding for the arts in their area, have had budgets reduced by 7% per year. The coalition government seems to believe that funding for the arts can only be justified on economic grounds but that in any case private funding should replace public funding.  Sir Roger thinks this thinking is flawed. Major donors perceive the Arts as part of the public estate. They are quite happy to help out and no doubt draw kudos from their involvement but they expect governments to recognise their responsibilities. We need both as it is a symbiotic relationship. The Corporation of London for which Roger is responsible gives some £70m to the Arts.

The famous Richard Whittington was a great public benefactor who saw that it was in his interest to invest in public health, education and so on.  The concept of income tax is a modern one. It was introduced by William Pitt the Younger to finance the war against Napoleon but withdrawn when that was won. It was reintroduced to help build the railways, the roads and the hospitals of the Victorian era. In 1913 it was as little as 6% but the top rate of tax peaked at 99.25% in the Second World War and remained over 90% in the 1950s and ‘60s. Philanthropy is effectively voluntary tax donation. There is evidence that if the rates of tax are too high philanthropy will fall and vice versa.  This extends to public services in different ways and it has been recognised by a succession of health ministers that the National Health Service could not operate without volunteers.

Although the UK has a good tradition of giving, not in the same league as the USA, but well ahead of most European nations, only 7% of wills include charitable bequests. Roger described the Livery Companies, of one of which I am proud to be a Warden, as the greatest and oldest philanthropic body in Britain. He said that all new Liverymen will be asked to sign a statement to the effect that they intend to leave something in their will to their Livery Company’s charitable arm. For legal reasons I don’t think this can be made mandatory, as the charity rules insist on an arm’s length relationship with the sponsoring company, but it can certainly be introduced as a moral obligation of taking the livery.

Copyright David C Pearson 2013 All rights reserved

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