Damilola Taylor’s tragic death on the North Peckham estate in November provoked Lord Harris, the Tory peer and carpet magnate, to donate £2m to build a youth club in his memory. Harris grew up near the estate on which Damilola was stabbed, and the £2m was a typically warm gesture from Britain’s most generous multimillionaire.
Harris may have been a staunch Thatcherite and the man who set the Tory party’s finances on a more solid footing in the mid-1990s, but that did not prevent him from donating more than £100m to charity in recent years. As his fortune now sits at perhaps £160m, he has given away about 40 per cent of his potential wealth. No other multimillionaire in Britain comes anywhere near that figure – certainly not the champagne socialists who sit on the Labour benches in the House of Lords or Commons.
But if, in this season of giving, we are looking for the world champions of generosity, we have to look outside this country. George Soros, the man who famously made a billion dollars or more when he forced the pound out of the European exchange rate mechanism on Black Wednesday in 1992, is now planning to make amends for his role as a tooth- and-claw capitalist. The entire Soros fortune – about $5bn in all – is to be given away. Last year, he spent $500m and, having turned 70 in August, he is determined to have spent the lot by the time he is 80 on his favoured philanthropic causes in the former Soviet Union and eastern Europe.
Chuck Feeney, another former American billionaire (now mere millionaire), gave money to support Sinn Fein in the run-up to the peace process in the early 1990s. This sounds controversial, but the shrewd Feeney, who made his then £1bn fortune from duty free shops in Far Eastern airports, was actually backing the “ballot box” wing of the Republican movement, which seems to have won over the Armalite faction. Presumably encouraged by his success there, Feeney then gave all but £5m of his money to a host of worthy causes and went into longed-for obscurity.
Strangely, both Soros and Feeney have been quite frugal – dare one say mean – in their personal lives. True, when Soros was involved in a court case over the dismissal of his London butler (who was later awarded compensation), we heard of a £500 bottle of Chateau Lafite being tossed into a casserole. But that was a decade ago. The older (and wiser?) Soros eschews a jet, and frequently travels by tram around cities in eastern Europe. Likewise, Feeney was renowned for going economy class on his business travels and for having his suit trousers held up by a safety pin.
Soros and Feeney are the most spectacular examples of what American pundits have called “wealth fatigue syndrome”. The roaring bull market of the past decade has thrown up a raft of new super-rich in their late thirties and early forties. After going through the jet, the yacht, the several houses, and after trying every exotic holiday destination and every luxurious activity, they now realise that there is more to life than mere idleness and a sybaritic existence. Some go back to work, but a growing number devote more of their time and financial clout to charity or worthy causes. Nourishing the soul has become a pretty serious business for the super-rich.
Is there any sign of that on this side of the pond? Little as yet. But watch out for large donations to philanthropic groups in the future, as the first generation of the new super-rich in Britain realise that they have to think about the kids. The fear of so much money ruining their children has already led the likes of Paul Sykes, the Eurosceptic property magnate, to state publicly that his vast resources will not cascade down the generations.
But while new – and, frankly, Tory-inclined – money seems particularly generous here, the British aristocracy is notoriously mean, as any charity will testify. Lord High and Mighty or the Marquess Chinless Wonder will be happy to serve as patrons of charities, or to use their connections and names to entice the eager social climbers of the nouveaux riches to Chinless Wonder Hall so they can be buttered up by a favoured charity. But getting Soros-sized sums of money out of the aristocracy is a different matter.
Just look at the latest accounts of Grosvenor Estate Holdings, the Duke of Westminster’s main company. It did give a tasty sum of £550,108 to the Westminster Foundation, which supports a wide range of charities. But Westminster is widely reckoned to be the richest Briton, with nearly £4bn in assets to his name. The aristocrats’ plausible excuse is that they are often asset rich but cash poor. In other words, Westminster might say, “It’s no good tapping me for cash, guv’, it’s all tied up in that square there”, and one imagines His Grace pointing to Eaton Square in London’s Belgravia or to thousands of acres of rolling Cheshire.
There can be no excuse, however, for some other high-profile groups in Britain. In 1997, the influential Directory of Social Change, an organisation that published a book recording millionaires’ charity-giving, found that footballers were among the most parsimonious of the new rich. “We’ve researched all the charitable trusts in this country and have uncovered nothing major by any football star,” said the directory’s Dave Casson at the time.
As the sports writer Jim White put it, “The average Premiership footballer is about as charitable as Italy’s defence.” What has changed since then? Only that the salaries of the real cream of football’s Premier League have risen from £20,000 a week to about £40,000 or £50,000. And it is thought that when David Beckham and other Manchester United stars start their next round of contract negotiations, their target may be £100,000 a week – or about £5m a year. Add another £5m a year for the usual sponsorship and endorsements, and that seems to be real wealth indeed.
Or is it? That £10m a year will probably last only a decade at best – and probably somewhat less. After allowing for tax and a high-living lifestyle (it is the headache of many a football star’s accountant – or indeed, those who handle young pop stars – that their clients will not save for the future), they may be lucky to be left with £10m or £20m in capital. In comparison to the dozens of entrepreneurs who every year exit from their businesses with £30m or more in cash, it is small beer indeed.
Those highly paid City traders and bond dealers who are now banking their annual bonuses (which should still be pretty impressive, despite the direness of the past six months) are also pretty tight with their wads. Little makes its way to charities, unless one considers country estates, Ferrari dealerships and the like to be basket cases.
There will be several hundred bonuses in the Square Mile topping £500,000, and perhaps a hundred of more than £1m. But, like footballers, City types do not have much time (both in their punishing work schedules and in their relatively short and highly risky careers) to build up the necessary capital of £30m-plus or so that will give them enough financial slack to support charities fulsomely.
There are exceptions. The former partners of Goldman Sachs all have shareholdings of at least £30m or more in value since the firm’s flotation in 1999. But given the extraordinary level of secrecy with which it shrouds itself, few charities are able to penetrate the inner sanctum to make a pitch to Goldman Sachs’s mostly invisible millionaires. There are a few well-known names there – the economist Gavyn Davies (just appointed deputy chairman of the BBC) stands out for his links to new Labour. He has raised more than £20m from share sales recently. What he has spent the money on is a mystery.
There is no mystery, though, about how much Britain’s biggest companies in the FTSE-100 index spend on charity. It is all in their annual reports; in a study for the Independent on Sunday earlier this year, the financial journalist Dominic Prince found that their total charitable donations reached a seemingly healthy £300m. But this represented just 0.3 per cent of the companies’ total value at the time. The most generous company was BP Amoco, which gave £39m to support environmental and other causes – good PR for an oil multinational. With the rise in oil prices, and the prospect of a furore as a result, BP’s charitable donations could well go into overdrive this financial year.
The smallest donations came from hi-tech companies such as ARM Holdings which gave just £6,000. Given that many of the techies have been relegated recently (and, in any case, they could hardly give away money when they weren’t making any profits), their parsimony is understandable. But as they have been replaced in the index by many old-economy companies, overall donations should rise sharply from the corporate sector – unless their profits are flattened by recession.
One reason why many thrusting entrepreneurs may now decide to be generous to charity is that British political funding has been cleaned up. Before the parties’ accounts were opened to public inspection, half a million to Tory Central Office and a bit for the local party, plus a few charitable donations as “cover”, would deliver a knighthood or a peerage within months. Now, the only route to a K is to hit the charity circuit with your chequebooks. It probably won’t work in most cases, but the charities are not complaining.
Philip Beresford compiles the annual Sunday Times Rich List