Trends & data analysis

Charitable giving in London: 500 years of innovation

17 December 2015

With Christmas approaching, and the news full of Mark Zuckerberg's philanthropic legacy, many people's thoughts naturally focus on charity. While Dickensian visions of Londoners spreading cheer and Christmas Carol-like benefaction, how does this actually play out in reality?

A new model of London’s giving has just been published, which shows that the capital’s cash giving is equivalent to around £5.6 billion annually, or 29% of all UK giving. The new model was commissioned by City Philanthropy (which aims to encourage a new generation of City philanthropists and promote London as a global centre for philanthropy) as part of a project on Millennial donors.

To put this into context, the earliest recorded mention of London’s giving as a proportion of the UK’s charity (a study of philanthropy in the UK 1480-1660) found that 34% of all UK giving came from London.

So it would seem that not much has changed in the last 350-500 years. Can that really be true when London itself has undergone massive change during that time?

In 1480 the population of London was probably somewhere between 45,000and 80,000 and it was considered a relatively quiet backwater by other European cities. But this was already rapidly changing. By 1660 London was the most important city in Britain, and becoming one of the largest and wealthiest in Europe. In 1750 London contained around 700,000 inhabitants, and one tenth of Britain’s urban population; while rapid urbanisation in the wake of the 19th Century industrial revolution led to London becoming the world's largest city from about 1831 to 1925.

Today, the population of London is around 8.7 million, and the city gains 9 new residents every hour, in comparison to many other European and North American cities which are experiencing very little growth. The population of London now constitutes 13% of the total UK population, accounts for 22% of the GDP (a larger share than for Wales, Scotland or Northern Ireland) and has the youngest regional profile in the UK.

In terms of philanthropy, London also has a long and rich history

Professor W.K. Jordan wrote 3 volumes on the state of philanthropy between 1480-1660 and talks of ‘the momentous shift which occurred in men's aspirations for their society in the course of the sixteenth and seventeenth centuries’, particularly in London. It is Professor Jordan’s estimate that more than a third of the whole of the great charitable endowments created in England during this period emanated from London.

‘This wealth flowed principally from an urban aristocracy determined not only to care for the hopelessly destitute but so to enlarge the 'area of opportunity' so that poverty could be prevented.’

The ‘merchant aristocracy’ contributed most of this charity and, moreover, were seen to be investing in experimental and innovative economic and social rehabilitation schemes for the poor (compared to their rural counterparts).

‘It is not too much to say that London's almost prodigal generosity was fashioning for all of England the institutions of a new age.’

What does appear to have changed is the expansion of the voluntary sector itself and the way that philanthropy happens

Once the sole domain of the wealthy few, giving to a few select institutions, charitable giving has now become much more widespread and democratised. The new model of London’s giving shows that 35.8% of London’s giving now comes from the general public. This is only marginally less than the 36% provided by London’s independent grant-making trusts and foundations (largely funded by the traditional wealth of London’s richest families and businesses). But while the Bill Gates’ and Mark Zuckerbergs of this world dominate headlines about charity, major gifts (from wealthy individuals) constitute only one-sixth (15%) of the total.

Meanwhile, London’s reputation for innovative ways of relieving poverty via charity remains intact, with ever-renewing zeal.

The City Philanthropy report focusses on the emerging phenomenon of ‘giving networks’ amongst London’s workforce. These donor-led networks are encouraging individuals to become more philanthropic and community-minded. Millennial givers tend to have more blurred boundaries between work and personal aspirations, and expect more both of themselves and their employers in tackling social issues to bring about a better world. Examples include Beyond Me, Be More (formerly The Bread Tin), Giving What We Can and Effective Altruism. The report estimates that such groups could become a major force in London’s giving landscape, generating a potential £20 million by 2020 if just 1% of London’s workforce take part.

London remains the philanthropic capital of the UK, but with 1% of Britain’s population owning the same share of wealth as its poorest 55% should we be expecting still more of our great City?

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Cat Walker

Dr Cat Walker has worked in the UK voluntary sector for the last 17 years, including Charities Aid Foundation where she was Head of Research from 1999-2006, and Directory of Social Change where she was Head of STEAM (Sector Trends Evidence Analysis Metrics) from 2010-2015.

Cat now works as a freelance consultant and is the founder of The Researchery – a policy-focussed, strategic research surgery for those who want to get more out of data for evidence-led social change we can all believe in.

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