EMBARGOED UNTIL 19:00, 26 th May 2004

Lord Joel Joffe addresses the House of Lords:

My Lords,

There is an illusion that the British give generously to charity. Sadly however the statistics tell a very different story.

For a number of complex reasons, the statistics for voluntary giving are far from satisfactory. However they are reliable enough to reflect trends, and the trends, as outlined in a telling speech last year by Stephen Ainger, the Chief Executive of The Charities Aid Foundation, are what have sparked off today’s debate, in respect of which I declare an interest as Chair of The Giving Campaign.

The trend period upon which I will focus runs from 1992 to 2002 which is the most recent year for which statistics are available.

During that period My Lords:

 Personal incomes have in real terms risen on average by more than 25%

 Personal wealth has more than doubled

 The Chancellor of the Exchequer, Gordon Brown, has introduced a range

of very attractive tax benefits with the objective of stimulating giving,  The charitable sector has become much more professional in fundraising

 The very wealthy have prospered as never before

With all these positives my Lords one would have expected the level of individual giving as a percentage of GDP to have increased dramatically.

Instead, it has fallen from 1.2% in 1992 to 0.9% in 2002, a fall of 25%.

In seeking to explore the reasons why the level of giving has not risen in line with the growth of incomes, it emerges that the poor who give to charity, give on average three times as much as a proportion of their income as the better off, the top 20% of whom, give on average only 0.7%.

So we find that the poor, who cannot really afford it, are considerably more generous than the well off, who can.

This is even more astonishing when regard is paid to the statistics which show that the wealthiest 1% of the population own close to one quarter of total marketable wealth while the poorest half of the population own between them only 5%. It follows from these statistics that if the level of giving is to increase significantly, that increase must largely come from the well off substantially increasing the level of their giving.

And unless the very wealthy set an example, it is unlikely that this increase will happen.

The definitive guide to the richest 1000 in Britain today is The Sunday Times

2004 Rich List, the qualification level to make the list being wealth of £40 million or more. In this year’s list, it is recorded that Britain’s super rich have never had it so good, with their wealth now in excess of £200 billion, having almost doubled in the last 4 years.

The Rich List also contains The Sunday Times Giving Index which ranks the 30 most generous philanthropists in the Rich List, based on the amount they give expressed as a percentage of their wealth. The top seven in that Index were generous, each having given more than 5% of their wealth in recent donations, headed by the splendid example of Tom Hunter, the Scottish industrialist, who committed £100 million, which was one fifth of his wealth, to charity. However, of the ten richest billionaires in Britain, with wealth ranging downwards from £7.5 billion to £2.2 billion only two, Lord Sainsbury and Hans

Rausing, figure in The Giving Index. The other eight including such well known billionaires as Sir Richard Branson, Phillip Green and Bernie Ecclestone, either have not qualified or have failed to provide information as to their giving. If it emerges that in fact they were very generous it would be very good news.

It is important to recognise my Lords that those who have provided information as to their giving in The Rich List have done so, not in order to flaunt their giving, but rather in the hope that their example will influence others to follow.

It would be very encouraging, my Lords, if next year the others in the Rich List followed this example.

It is instructive to compare what the wealthy in the USA give in relation to their counterparts over here. In December last year Business Week published a list of the 50 most generous philanthropists in the USA.

Bill Gates headed the list having given away $23 billion over 5 years, which is about half his present wealth, while Gordon Moore, co-founder of Intel at number 2 donated $7 billion which is more than his current wealth.

In the top 50, 30 had given away more than 10% of their current wealth. With such generosity amongst the very wealthy in the USA, it is easy to understand why in the USA over the period 1992 to 2002, charitable giving has increased by 15% as a percentage of GDP, in contrast to our own 25% fall although I should add that it is not in all respects a valid, like by like comparison.

The reason for the disparity in giving compared to the USA is a difference in culture. In the USA it is generally accepted by the well off, that they have a responsibility to give at least part of their wealth to the society which made it possible for them to accumulate such wealth. As a result in the USA, giving is celebrated. Those who give, earn and deserve respect from their society for their generosity.

In the UK, unfortunately giving is not a defining characteristic of the well off. It is argued that in the UK many of the well off prefer to avoid publicity and to give anonymously and that as a result their giving is not taken into account.

This is true in some cases but it is often the excuse of those of the well off, who do not give generously or at all, but who prefer not to admit to this.

My Lords, the question arises as to whether we should be seeking to influence the well off to increase their giving to charity. After all, giving is a very personal matter and there is no way that we can compel individuals to give more than they wish to.

Whether or not we decide to try to influence them depends on the kind of society we would like to have in this country. Is it to be one where the wealthy and the well off focus solely upon their own gratification.

And accumulate yachts, homes, personal jets, fleets of motor cars and other playthings and show little regard for those less fortunate than themselves. Or do we want a caring society in keeping with British tolerance and sense of fairness where everyone contributes as generously as they can to make that a better society for all. It is the latter I believe for which we should be aiming and the initial objective for which I believe we should aim, is to double the level of giving over the next ten years.

As to the range of initiatives which should be taken to achieve this, a new book to be published next month, ‘Why the Rich Give’ written by Theresa Lloyd of

Philanthropy UK, a project of the Association of Charitable Foundations, is essential reading.

My Lords, I do not believe that the majority of the well off are mean and uncaring. They do give but unfortunately their giving is reactive rather than planned. If they see pictures on TV of starving children or if they are asked to give, they often respond – sometimes quite generously. However, they seldom plan their giving by relating the amount they give to their income and wealth. If they did this periodically, I do not doubt they would spontaneously wish to increase the level of their giving. I recall Michael Brophy, the previous Chief

Executive of The Charities Aid Foundation, making a point at meetings of asking the people there to put up their hands if they gave more than 1% of their incomes to charity. It was astonishing how few put up their hands and how many subsequently said that having thought about it they had immediately increased the amount they intended to give.

The natural starting point in changing our approach to giving by the well off is to establish benchmarks. Many just have no idea of how much it would be reasonable for them to give.

I would suggest an initial benchmark for our society as a whole of an average of

1.5% of income or wealth. Within this general benchmark, the starting figure for the well off – whom I would define as having incomes in excess of £100,000 a year - would be 2% going upwards depending on the wealth and income of the individual concerned, and going down to virtually nothing for those who struggle to survive on annual incomes of £10,000 or less. Surprisingly my Lords there is considerable opposition to benchmarks. Mostly I suspect by those who do not give generously or at all. But the rationale for this opposition is difficult to follow. While nobody has the right to determine how much somebody else should give, it is not unreasonable, in a society where we are all dependant on one another, to suggest guidelines as to what may be reasonable.

And it is not as if benchmarks on giving are something new. Most faiths lay down specific guide lines.

Christian faiths often follow the 10% specified in the Old Testament with 5% to go to the Church and 5% to other good causes, for Islam the starting point is

2.5% with charity beyond this encouraged, for Hindus it is according to ability and position and up to 50%, while for Sikhs 10% is specified in the Code and the amount for Jews is also 10%.

Having established benchmarks, we should as in the USA, celebrate the giving of those whose giving matches these benchmarks, or even more those who exceed them.

Naturally my Lords the key players, whose job it is to influence both the well off, and the not so well off, to give to charities are the charities themselves. They must face up to the challenge of proving to donors that they are making a real and positive difference to society, that they are efficient and effective and that they appreciate and value the support of those who contribute to their work

Having accepted this responsibility, charities must tailor the level of their “ask” to the income and wealth of the donor and not be frightened to ask for generous donations from those who can afford them. Donors frequently do not know what is an appropriate amount to give.

Increasingly, charities should take out potentially generous donors to show them their work so that such donors gain an understanding of what it is like to live in poverty or to be without shelter or food or dying of Aids. When the wealthy have seen such suffering and realise that they can make a difference, they will want to give generously.

The corporate sector and the Civil Service also have an important role to play in relation to individual giving, and that is through encouraging Payroll Giving which is an extremely tax effective way for employees to give. In the USA, 32% of employees are enrolled for Payroll Giving. The corresponding figure in the

United Kingdom is only a tiny 2%. My Lords, Government has done a great deal to encourage individual giving through the generous tax incentives introduced by the Chancellor of the

Exchequer and by its wide-ranging support of the voluntary sector. While there is a limit as to what Government can do, a change in the legislation relating to new Trust structures enabling donors to get immediate tax relief on gifts, but to draw income as well for a prescribed period could, based on the American experience, attract very substantial endowments.

The media too has increasingly made a positive contribution in profiling generous donors and in the case of The Sunday Times in creating a Giving Index and hopefully will in future focus even more on the charitable sector.

If the charitable sector, the business sector, Government and the media work in partnership to spread the message of the importance of planned giving, with an emphasis on relating the level of giving to wealth and income, I believe that over a period of ten years, it should be possible to meet the target of doubling the level of voluntary giving in real terms.

Although individual giving in the period 1992 and 2002 has fallen so dramatically as a proportion of GDP, the potential to greatly increase this level is there. Already in the last three years, despite the crash of the stock market, the level of giving has begun to rise. We would be well on our way to achieving this target, if the 1000 members of the

Rich List, with wealth in excess of £200 billion, were on average to increase their giving from 0.7% to 1.7% which they can so easily afford. This alone would raise the current level of giving by £2 billion to £9.3 billion and would set an example to the other 220,000 millionaires in the UK and to the mass affluent.

As a society we must do better and hopefully the better off rather than the poor will lead the way.

I beg to move.