UK Politics
Giving it all away
Published 15 January 2007
The government must encourage the rich to help fund the arts
Philanthropy has long played an important role in the British art world. The gifts of great private collections helped create our national museums: Hans Sloane for the British Museum; John Julius Angerstein for the National Gallery. Later, individuals helped to fund the building and development of arts institutions. One example was Henry Tate, the great sugar refiner, who purchased the site and paid for the construction on Millbank of the first National Gallery of British Art (later renamed the Tate Gallery), which opened in 1897. The National Portrait Gallery (1896) gained a site thanks to a donation from W H Alexander. In the inter-war years, gifts from the international art dealer Joseph Duveen created extensions for the Tate Gallery, the British Museum and the National Portrait Gallery.
In more recent years, philanthropy has contributed to the development of collections: in the Nineties, Sir Edward Manton laid the foundations for a collection fund at Tate Britain, and in 1985 Sir Paul Getty gave an extraordinary gift of £50m to the National Gallery which created an acquisitions support fund. At the National Portrait Gallery, recent donations by the Drue Heinz Foundation, the Weston family, the Wolfson Foundation and the Djanogly family, and my own contribution in 1996, transformed and extended the building with the Ondaatje Wing.
With my family donation of £1m to the Portrait Fund, announced last month, I hope to help take public philanthropy to a new level. The fund itself was established with two generous legacies, by the late Lord Sieff, a former gallery trustee, and Viscountess Eccles. It has already made a difference to the gallery's ability to acquire works - £50,000 was provided towards acquisition of the John Donne portrait last summer.
The Portrait Fund is essential to the gallery if the collection is to continue to evolve. In this current climate of diminishing government funding, there is much debate about ensuring that British national collections can develop as they should. The launch of the fund is a timely reminder that the private sector can make a considerable difference to the health of museums in Britain today, as well as prevent the exodus of valuable art to other countries.
There are enormous differences in culture, structure and attitude between Great Britain and the United States regarding philanthropy. If the government wishes to encourage a more active culture of giving in this country, it should study these differences - particularly as a new generation of wealthy donors in England is now seeking to leave its mark on the public sphere.
At a recent conference organised by the Institute for Philanthropy, the institute's director, Hilary Browne-Wilkinson, argued that Britain's strong tradition of Victorian philanthropy was replaced after the Second World War by the welfare state. The problem has been that, since 1979, voters have refused to countenance high taxation. As she said, "With diminished government funding, we must turn to other means of supporting public purposes - philanthropy being one; another being the revenue creation of charity itself." She provided some helpful statistics: as a percen tage of GDP, individual charitable giving in the US is more than double that in the UK. In 2002, $183.7bn was given, which represented 1.75 per cent of GDP. Using the same measure for the same year, UK individual giving was £7.3bn, or 0.76 per cent of GDP.
So, why do Americans give more? Theirs is a country where people make money and realise that they have a responsibility to give money away in order to keep the system going. Giving money away helps them to feel part of the community, and this is reflected in the causes to which they give. Religion (including local charities) gets 45 per cent of donations: university and alumni giving only 1.4 per cent. In Britain, on the other hand, 13 per cent goes to religion, while 17 per cent goes to medical research, 14.4 per cent to children and 9.5 per cent to animals. Few UK donations are devoted to the community.
There are also enormous differences between how Americans and British people give: 77 per cent of all collection methods in the UK are spontaneous, looking for loose change. In the United States, there is a culture of "planned giving", which provides 61 per cent of the voluntary income of non-profit organisations. One critical factor is tax incentives. According to the biweekly US Chronicle of Philanthropy, 54 per cent of the richest US donors said that they give for the tax benefits. In Britain, the charity, rather than the individual, receives most of the refund under Gift Aid. As a result, many potential donors do not feel that the system gives them a tax break.
In addition, gifts of capital and assets in Britain do not attract an allowance similar to that on gifts of shares. A recent review published by the Treasury recommended a tax allowance to encourage getting more art into museums, but sadly nothing was done to implement this recommendation. When similar proposals were made by the Art Fund before the last Budget, they were apparently supported by Treasury officials, but then killed on the grounds that it was wrong to give tax benefits to the rich. Unfortunately, however, without obvious and understandable tax benefits, the rich in Britain are unlikely to put as much back into the community as Americans do.
"Planned giving" is vital to the US economy and it encourages individuals to feel a sense of responsibility for the welfare of others in their locality. It could be just as vital to Britain, but the government, and the Treasury in particular, must learn how to encourage a culture of philanthropic giving and must recognise that public interest lies in promoting self-interest. The government must encourage individuals in the private sector to show some leadership by sharing responsibility for running certain sectors of the state. With the changing political scene, there could not be a better time for this to happen.
Sir Christopher Ondaatje is a trustee of the National Portrait Gallery
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