The future of giving and philanthropy

Video transcript

Speakers

Fiona Gillespie – Head of Charities Scotland, Rathbones Investment Management
Natalie Piñon – CEO, National Philanthropic Trust UK
Adrian Punaks – Director of Philanthropy, Cancer Research UK

Transcript

Introduction and the changing philanthropy landscape

Fiona: Giving is changing, and the picture is mixed. Fewer people are giving to charity than in previous decades, while giving by wealthier individuals has been growing. Giving is therefore becoming much more concentrated.

We are also seeing more people use structured giving vehicles, such as donor-advised funds, or give through investments rather than traditional cash donations. Importantly, we are at the beginning of one of the largest transfers of wealth between generations the UK has seen.

Rather than looking at this purely through a fundraising lens, we want to hear from both sides of the relationship: what today’s philanthropists are looking for, and how charities can build deeper, longer-lasting partnerships with the people who support them and with potential supporters.

I am delighted to be joined by two guests who see this from different sides of the table. Natalie is CEO of National Philanthropic Trust UK, having previously led its development work. She has 20 years’ experience building and scaling mission-driven organisations across the philanthropy and private sectors. She works closely with family offices and multigenerational families on values-based giving and investing, and has particular expertise in advising female philanthropists and wealth holders. She has also been recognised by NatWest WISE100 as a leading woman in impact investment and mission-driven business.

We are also joined by Adrian, Director of Philanthropy at Cancer Research UK. Adrian joined from philanthropic consultancy More Partnership, where he was a partner, and brings more than 20 years’ experience in philanthropy, strategic relationship management and campaign development across institutions including UCL, Imperial College London and Birkbeck.

Before we get into the detail of our discussion, it would be good to learn a little more about you both. Natalie, you have spent 20 years working across philanthropy and the private sector, and you now lead an organisation that works alongside donors as they decide how to give. What first drew you to philanthropy, and what does your day-to-day work at National Philanthropic Trust UK look like?

Paths into philanthropy

Natalie: Thank you, Fiona. It is lovely to be here, and to be here alongside Adrian.

My career has always been at the intersection of private capital and impact. I started in financial services, but moved quite quickly into international development. My work at the United Nations and other international organisations helped me understand what grant-making could do for civil society organisations.

When I left that world and returned to the UK, having done that work internationally, I began working with private donors on both the investment and giving sides. That was where I saw a real gap in supporting wealthy individuals who had a great deal to give and wanted to focus on doing their giving well, and doing more of it.

At National Philanthropic Trust UK, I bring those worlds together. I work with donors who hold substantial wealth and want to do something philanthropic, as well as with the charities they support. My day-to-day work is therefore very varied. I spend a lot of time with donors and their families, helping them think about what they care about and how to structure their giving.

I also work with advisers, including financial advisers and other professional advisers, to help them become more comfortable bringing philanthropy into client conversations. I spend time with the charities our donors support too, so it is a fantastic mix.

Fiona: Adrian, you have come from a different side. You moved from advising charities as a partner at More Partnership to leading philanthropy inside one of the UK’s best-known charities. What have been the biggest differences between the two roles, and how has that move changed the way you work with philanthropists?

Adrian: Thank you, Fiona. It is a pleasure to be here. I have moved between different sides of the fence during my 20-plus years in this world.

My initial background in philanthropy was in the higher education sector. At that time, philanthropy was often seen as something that was nice to have alongside a blended funding model, with income coming from students, research councils and elsewhere. Today, it is critical to the future of the extraordinary work many of those organisations are doing.

Immediately before joining Cancer Research UK, where I am still relatively new, I spent several years as a philanthropy consultant with More Partnership. I worked with a very wide range of organisations, from large institutions such as Cancer Research UK, the British Museum and Russell Group universities, to very small organisations that were at the beginning of their fundraising journeys and working hard to raise relatively modest sums.

I now find myself in a privileged position at Cancer Research UK, a large, powerful and highly reputable charity. In effect, everyone in the organisation is thinking about fundraising and is a fundraiser in some form. As the largest independent cancer charity in the world, our model is entirely dependent on external support, which is phenomenal when you think about it.

A giving landscape shaped by fewer, larger donors
Fiona: Let us turn to some of the key themes. The data paints a mixed picture. Fewer people are giving to charity than a decade ago, yet research suggests that giving by wealthier individuals has grown strongly over the past six or seven years. Are we moving towards a giving landscape that relies on fewer, larger donors, and should that concern us? Natalie, perhaps I can bring you in first.

Natalie: If you look at the data and the direction of travel, wealthier donors certainly seem to be keeping up their giving more than the general population. That is not necessarily concerning. The fact that they continue to give, and are giving more year on year, is positive.

The potential red flag is that you would never want a charity’s income to depend on a handful of people. A significant change in one donor’s giving pattern could affect a charity’s fundraising plans.

However, it is also positive that wealthy donors are considering philanthropy as a bigger part of their overall wealth planning. I see a significant opportunity among the donors we work with. They have much more to give, and there is scope to help them dig deeper.

On the wider direction of travel, we want mass participation in fundraising. It is important that, as a society, we support charities across the board. I am concerned that overall giving is declining, although that may ebb and flow with economic conditions.

Fiona: Adrian, are you seeing that at Cancer Research UK? You have the benefit of a well-known brand and an established audience of people who know your work. Does the trend create particular challenges for charities that do not have a dedicated philanthropy team?

Adrian: Since joining Cancer Research UK, I have continued to be astounded by the breadth and depth of its supporter base across the UK. I would guess that many people attending this webinar have supported Cancer Research UK, directly or indirectly. That is an extraordinary foundation.

At the same time, we are increasingly conscious that many people feel they have less money available to give. That is a stark reality for some, although not for everyone. We are also seeing more large gifts going to a broader range of organisations.

When I first became a fundraiser, a small number of universities received the lion’s share of very large gifts. Reports on million-pound-plus giving tended to show higher education dominating. That has shifted considerably.

Cancer Research UK has substantial brand power and is a well-known, loved and respected UK charity. However, we are also a serious science funder working on a global stage. We are a mission-driven organisation that does not see boundaries between countries in the pursuit of the best research. We therefore need to position ourselves for different audiences, including global philanthropists who want to support the strongest opportunities.

For smaller charities without dedicated resources, deciding where to direct limited capacity can be difficult. I do not think it is an either-or choice. Whether you are a huge charity or a small organisation with a modest supporter base, you can identify people within your community with whom long-term relationships could develop into genuinely philanthropic partnerships at an appropriate scale.

A smaller charity can be more fleet of foot, swift and responsive. One of the challenges of our scale is that people sometimes ask, “You are huge, so where does my money go? Why do I matter as a donor?” A smaller charity can often show a donor’s contribution more directly.

What today’s philanthropists want

Fiona: Natalie, you work with individuals and families at the point when they are deciding how, why and where to give. What are today’s philanthropists looking for that differs from five or ten years ago?

Natalie: There has been an evolution, and I see it as positive. Ten years ago, many donors might have been happy to write a cheque and receive a thank-you letter. Today, most of the donors we work with want to be more involved.

That does not necessarily mean direct involvement with every charity they support, but they want to understand more about what those charities are doing. Younger donors in particular want to understand the issues charities are grappling with. They want to meet the people doing the work and may want to contribute their skills or networks. Donors increasingly want an active role in their giving.

There has also been a shift in how donors think about their giving overall. We often talk about strategic philanthropy, although sometimes that simply means having a more clearly articulated giving plan: deciding what they care about, what they want to support and what they hope to achieve over time.

They may also consider how philanthropy fits with other parts of their wealth, including investments, businesses and networks.

Finally, as substantial wealth moves from one generation to the next, donors are thinking about their families in relation to philanthropy. They are asking how the next generation will support what the family is doing, how family values can be passed on, and how philanthropy can become a meaningful part of that.

Fiona: How do you see the balance between evidence of impact and the relationship itself? In an intergenerational context, families may want a continuing relationship with the charity so that familiarity and knowledge pass through the generations. Are impact and relationship equally important?

Natalie: It is both, although the balance depends on the donor. Everyone we work with gives because they care about something, so the decision is values-driven. That often extends to family members.

Relationships with charities matter more or less depending on how close donors are to those organisations. Evidence of impact reinforces the relationship over time. The balance can fluctuate, but the starting point is always a values-based conversation about something the donor cares about.

Building long-term relationships and trust

Fiona: Adrian, deeper and more sustainable relationships between donors and charities depend on trust. Recent Charity Commission research suggests public trust is holding up, although the donor base is smaller. What does a genuine long-term relationship look like, and what practical lessons can listeners take away?

Adrian: I can think of many examples where a relationship has worked well and you can trace the moments that helped establish it. I can also think of relationships that did not work and, in retrospect, the reasons can be very clear.

Leadership is often important, particularly transitions between chief executives and changes to key relationship holders. Those people can have a significant bearing on trust.

One useful rule of thumb is to listen for the moment when a supporter, donor, friend, advocate or champion begins to say “we”. That is the point at which it feels less like “them and us” and more like a genuine collaboration. It moves beyond a transaction in which the charity needs money and a wealthy person can provide it, and becomes a partnership.

Listening is critical. Fundraisers often know what the organisation wants and needs, and may arrive with defined propositions. We talk about donor-centric and donor-led fundraising, but we need to listen genuinely rather than assume a donor wants one thing or another.

Relationships are not always linear. We may want them to move at a certain pace, but factors beyond our control can affect them. Patience can be the hardest part because the need is visible and urgent, yet a donor may take time to develop the relationship.

Fiona: Is there a typical period between an initial conversation and a significant donation?

Adrian: There is research on how long it takes to cultivate a major gift, and on how long fundraisers need in a role before they really get into their stride. There can be a tension when leaders or trustees recruit someone and expect results immediately, even though meaningful relationships take time.

Trust is often built in moments that have nothing to do with discussing funding requirements. As in any relationship, the small things matter.

Fiona: Natalie, what have you seen across the cycle of building, maintaining and refreshing a relationship so that donors do not simply move on?

Natalie: I agree with much of what Adrian has said. The person making the gift may be one individual, but a family often sits behind the donation.

I have seen wonderful relationships develop between charities and families, with children, spouses, nieces, nephews and others becoming more interested in what one family member has supported over time. The relationship then evolves.

It is helpful to think of major donors as more than a single person. Donors want charities to succeed. Helping them and their families feel part of that wider story can deepen engagement.

Starting a philanthropy strategy

Fiona: We have a question from the audience. For smaller and newer charities, what are the first steps in preparing a philanthropy strategy? What does day one look like?

Adrian: It is a great question: what should you focus on to build something meaningful and sustainable?

First, do not overthink it. This is a relationship-based endeavour and getting that right is vital. If I were in a small organisation that needed to raise major gifts for a powerful cause, I would begin with existing relationships. Our best prospects are often our existing donors.

Look at who is already within your field of vision. Who has the potential to do something they have not yet done? Who can join the dots through their own relationships and networks?

Review the organisation’s history too. Identify relationships that may have lapsed, opportunities that were missed and connections that could be rekindled.

Then step back and become very clear about your story. The philanthropic landscape is crowded. Organisations need an honest conversation with leaders and trustees: we may feel passionate about this work, but will people outside the organisation care, and can we explain why they should?

Finally, donors need confidence that an organisation can use and manage a large gift effectively. Established institutions such as UCL, Oxford and Imperial have a long history and infrastructure that give donors confidence in their ability to manage substantial investment. Smaller charities need to demonstrate their own capacity in a proportionate way.

Restricted funding, transparency and proportionality
Fiona: This raises the balance between trust and transparency. Donors understandably want to see that their gift is making a difference, but this can lead to more restricted funding. Any funding is welcome, but charities often need freedom to direct spending to the area of greatest need.

How can charities be transparent without being overburdened by extensive reporting? IVAR’s Open and Trusting Grant-making initiative seeks to address this. What advice do you have for encouraging unrestricted giving?

Natalie: We have that conversation frequently, particularly with new philanthropists who are working out how best to support the causes they care about.

It is important to explain that restricting every pound can be costly for charities and, particularly for smaller gifts, may not be worthwhile. The donors we work with generally understand that charities are best placed to decide how funds should be used, although it is a message we reinforce regularly.

For charities, trust grows from openness. Give donors opportunities to understand the organisation, its leadership, how it operates, what it is doing and what it plans to do.

With major, multiyear gifts, reporting and grant agreements need to be proportionate. A large commitment over several years will naturally involve more detailed discussion and documentation at the outset. Openness builds trust over time.

Governance, leadership and gift acceptance
Fiona: A related question asks what governance or strategic arrangements make charities more attractive to major philanthropic donors.

Natalie: Charities need to be open about how they are run. Major donors will often want to speak to senior leaders, so it is important that those leaders are available and able to engage. They can tell the charity’s story and provide a perspective that complements the fundraising team.

It is also helpful to be open about challenges linked to governance and growth. Many donors are entrepreneurs who have experienced similar growing pains in business. Transparency about difficulties can strengthen confidence rather than weaken it.

Adrian: Returning briefly to restricted and unrestricted funding, we should accept that, with some exceptions, gifts tend to become focused on particular activities once they reach a certain scale. The evidence from very large gifts supports that.

Charities therefore need to be clear about what funding is genuinely useful and needed, rather than chasing a large sum for something that is not strategically right.

When a relationship becomes sufficiently strong, enlightened donors may say, “Use this where you need it most. I trust you.” That is a wonderful position. At Birkbeck, for example, we benefited from a donor willing to fund infrastructure and the team itself because they understood that more people were needed to deliver the work.

Charities have to keep the lights on. If every gift is tightly restricted, maintaining the organisation can be difficult.

Due diligence and gift acceptance are also fundamental to major-gift philanthropy. Trustees need robust processes to understand who the organisation is entering into a relationship with.

Intergenerational wealth and changing donor priorities

Fiona: Let us return to intergenerational wealth. One estimate suggests £5.5 trillion could pass between generations in the UK over the next 30 years. Research also suggests younger wealth holders may want to set their own path rather than continue the family’s established approach.

Are you seeing that trend? An audience question also asks about giving through a charitable trust or foundation as an alternative route for philanthropists.

Natalie: Inheritors of wealth will not necessarily follow the path their parents took. Even when families have invested significant effort in developing shared values and thinking about what philanthropy represents, the next generation will want to make its own choices. That is already happening.

Younger wealth holders often appear more open to collaboration. Giving circles are one example: donors come together around a theme, learn together and perhaps partner with a small number of charities to deepen their understanding of the causes they want to support.

The next generation also tends to be more global in outlook, reflecting how connected the world has become. However, among high-net-worth donors, family identity, legacy and shared values remain important. The balance is between those family threads and the freedom to forge a new path.

If a family has a charitable trust, foundation, donor-advised fund or similar structure, thought has already gone into organising its giving. Engagement is therefore likely to be more strategic. Trusts and foundations may have grant-making programmes or open calls for applications. These arrangements often signal a more structured approach than direct, ad hoc donations.

Adrian: The more strategic philanthropy becomes, the more it tends to organise itself. A few decades ago, that would probably have meant a trust or foundation. There are now many different structures, and larger gifts increasingly flow through them rather than directly from an individual’s personal account.

There are also people with wealth who do not yet think of themselves as philanthropists and do not use the language we are using today. They nevertheless have the capacity to care deeply about the issues our organisations address. We have a role in helping those individuals and families see how they can do something valuable with their wealth and partner with us.

Developing future donors

Fiona: Adrian, have you worked on programmes or pathways that help organisations engage the donors of ten years from now?

Adrian: At Cancer Research UK, we know there can be a pathway from someone supporting us through Race for Life or another event to wanting, later, to do something more strategic. We are a huge organisation operating across a complex landscape, and we are investing significant time and effort in understanding those journeys. I would not claim that we have the complete answer, but we are beginning to see rewards.

Universities often do this well through alumni relations programmes. US universities are particularly effective at building a sense of community from the time someone applies, so that graduates later understand they have a role in investing in the institution’s future. There are lessons from those programmes that other organisations can adapt.

Priorities for the next five years

Fiona: Looking five years ahead, what single change from donors, charities or advisers would make the greatest positive difference to the UK giving environment?

Natalie: I would like philanthropy to become a bigger part of financial conversations. Most of the donors we work with have wealth managers, accountants or lawyers, yet relatively few advisers ask clients what they want to do with their wealth beyond increasing it or passing it to their children.

If that question became a more common part of advice, it could unlock substantially more funding.

Fiona: Is the charity sector doing enough to engage advisers and encourage those conversations?

Natalie: Many charities are active in the advisory space. Although each one naturally speaks about its own cause, charities can help advisers become more comfortable raising philanthropy with clients. If advisers had greater confidence in those discussions, it would unlock more giving.

Fiona: Adrian, what changes would you like to see over the next five years?

Adrian: I have two. First, all of us have a role in defending philanthropy. Public and media discussion can imply that people give because they expect something in return. In reality, as many of us know, people generally want to help because they care. We can all speak up for the power and importance of philanthropy.

Second, we need to become comfortable and knowledgeable about the changing ways people can give. We have touched on donor-advised funds, but the landscape is complex, particularly when dealing with global funders because arrangements differ across jurisdictions.

Fundraisers are generally good at relationships. Those who can also speak confidently about the range of giving structures will be increasingly effective.

GDPR and responsible record-keeping

Fiona: We have several audience questions. One asks about GDPR, record-keeping and staying within the relevant guidelines and regulations. Adrian, what is your key governance point?

Adrian: This is a live issue for us because Cancer Research UK holds a great deal of data. Depending on your organisation, you may have experts readily available. If so, use them and engage with them.

If you do not have in-house expertise, there is a great deal of reliable information available, and you do not necessarily need to spend money to access it. The sector is collegiate, so seek guidance from peers in other organisations and ask how they have approached the issue.

If you know your organisation is not handling data as it should, recognising that gap is important, but you then need to address it promptly.

Making ambassador programmes effective
Fiona: Another question concerns ambassadors. The questioner has inherited 29 ambassadors who host events. The organisation has tried to explain their purpose and how they can help, but it is not making much progress. What makes an ambassador structure effective?

Adrian: I can think of many examples involving volunteers and ambassadors, both where the structure worked beautifully and where it did not. Without knowing the exact context, it sounds as though it may have become a significant demand on the questioner’s time.

Organisations need to be honest about whether such structures are working and willing to evolve them. It may be necessary to stand some people down and develop others so that the group has the commitment and capability needed.

Natalie: A parallel from our work is that donors are sometimes approached about trusteeship roles. They need to consider carefully whether they have the time and commitment to represent and support the organisation properly.

For ambassadors too, there needs to be genuine commitment and a clear understanding of what the charity is trying to achieve.

Building philanthropy skills across leadership and boards
Fiona: This relates to another issue. Leadership teams and boards may not have knowledge or experience of philanthropy, and some people are uncomfortable making an ask. It is difficult to build a strategy without those skills somewhere in the organisation. The answer may be to bring in an adviser for a period or recruit somebody to the board with that background.

Natalie: I agree. Having someone on the board who can bring that perspective is very helpful. Advisers can also add value, although that requires resources and time.

Someone with philanthropy experience may bring a useful network, but just as importantly, they can provide a clear path for building a broader strategy.

Giving investments and other non-cash assets

Fiona: Another question returns to giving investments rather than traditional cash donations. Is this something you see at Cancer Research UK? We are seeing clients give investments as a tax-efficient way to donate, and the process can be relatively straightforward.

Adrian: Absolutely. We are fortunate that our scale and history mean we have people with the specialist knowledge to handle this.

A straightforward cash transfer is welcome, but there are other ways to give, including assets and investments, and we can receive those forms of support. It is an important aspect of fundraising that perhaps does not receive enough attention. Fundraising teams need to understand how it works.

Natalie: Donor-advised funds are relevant here, particularly for smaller charities that may not be able to accept complex assets directly.

Many donors fund their donor-advised funds with cash, but they may also contribute investments or more complex assets. Those assets can be sold and converted into funds available for grants. Understanding the different vehicles donors use is therefore very valuable.

Fiona: Donor-advised funds are becoming more common in the UK, although they remain far more established in the US.

Natalie: That is right. The UK market is still small, but it is growing. Donor-advised funds are becoming a more prominent option for people deciding how to structure their giving.

Partnerships between large and small charities

Fiona: Do large charities such as Cancer Research UK ever act as onward funders by giving assets or money to smaller, related charities with fewer resources?

Adrian: Cancer Research UK is a complex organisation. We are a fundraising organisation, which is the perspective I bring in my philanthropy role, but we are also a funder.

We fund the best science wherever it may be in the world within oncology, and we do so in partnership. Those partnerships range from European cancer societies and national-level bodies to much smaller organisations.

This is a powerful part of our impact story, although it also introduces complexity, with both advantages and challenges. There are many examples of us operating in that way.

Helping local and regional charities stand out
Fiona: One final question: how can a local or regional charity present its work as sufficiently important to a philanthropist? What advice would you give for making the most of that short window to tell its story?

Adrian: There can be a real advantage. In London, the environment is extremely crowded, with many outstanding charities, institutions and museums seeking support.

Many funders now say they want to be less London-centric, which reflects a wider national conversation. A regional charity can demonstrate its relevance to a particular community and identify people with an affinity or connection to that place. That is a logical starting point.

Natalie: The COVID-19 pandemic was an eye-opener for many donors we work with. Some had been accustomed to funding internationally and travelling widely, but spending more time at home connected them with their local communities and showed them the value and power of local giving. That interest has continued.

Closing remarks

Fiona: Thank you both for a fascinating conversation and for giving your time so generously.

A clear message from today is that the future of giving is about relationships as much as resources. Donors are looking for connection, honesty and a sense of the difference they can make. Charities are looking for partners who will trust them and remain with them for the long term.

With wealth passing between generations and new ways of giving emerging, there is a real opportunity for donors, charities and their advisers to work more closely and plan for the long term.

Thank you to everyone who joined us and submitted questions. I am sorry we could not get through every question. We will share the recording shortly, along with a link to our feedback survey. We value your feedback and use it to shape future webinars.

Our next webinar will focus on the Autumn Budget and what it means for charities. It will take place on 29 October, the day after the main Budget announcement. We will explore the key measures and what they mean for charity leaders, trustees and the finance sector. Registration information will appear on screen shortly.

We hope to see you at a future webinar. Enjoy the rest of your day, and thank you.

Natalie: Thank you.

Adrian: Thank you.