As someone who has spent a working lifetime involved in philanthropy, opening the Sunday Times Rich List magazine has always been both fascinating and frustrating. Fascinating to learn about potential donors, frustrating to read how few were giving big gifts. So much wealth and yet relatively little philanthropy. A show of great philanthropy by people giving significant %s of their wealth, and some simply avoiding paying their taxes.
I have read so many Rich Lists over the years and they are all pretty much the same… a few interesting new entrants, a few new business successes, some interesting ‘rags to riches’ stories, a few family dynasties and a small number of philanthropists leading the way.
Today it has all changed. Reading the recently published Sunday Times Rich List 2020 feels extraordinary. So many fortunes changing so quickly and so much reputational damage for the super-rich. And a very different editorial tone from the Sunday Times. Some choice quotes:
“Why were so many British businesses brought to the brink of collapse after only a few weeks of lockdown? Why were some of these proudly “self-made” tycoons so quick to beg for a bailout from the tax payer?”
“The coronavirus pandemic has starkly exposed who among the super-rich are sitting on rock solid wealth and whose fortunes are more ephemeral.”
“Demanding a bailout from the taxpayer suggests that multimillionaires see their wealth as impregnable; they may not recognise their responsibility to shore up their defences to cope with the storms that will inevitably come, and hope to carry on buying super yachts, mansions and Maseratis.”
“While it is hard to deny that some of the 0.01% have exposed themselves as self important and out of touch during this pandemic, other Rich Listers have behaved very differently.”
So what should those working in philanthropy take from this year’s Rich List?
Here are my four thoughts…
- The pandemic effect on the super rich is variable – it depends what form their wealth takes. Those whose wealth is exposed to the stock markets are going to be feeling the most pain and may reduce their philanthropy. Note Caudwell’s comment on page 6, “We expected Caudwell Children, which offers support to children with conditions that NHS often struggles to treat, to raise £7-8m this year. Now it will get almost nothing.”
- The attitude of the public to the wealthy is changing and reputational risk for the wealthy is higher. Being seen to seek government bailouts when you are super wealthy (Victoria Beckham) or not paying your share of tax (Richard Branson) will earn you swift condemnation. The wealthy are going to be feeling under more scrutiny for their business transactions and tax affairs than ever before. Does this mean they will turn to philanthropy to enhance their reputations?
- Whilst philanthropy is a good way for the rich to enhance their reputations, there is increasing reputational risks for institutions taking gifts. Is it ok to take a gift from a wealthy individual who has been criticised for not paying their taxes? It’s time to dust off your gift acceptance and ethics policies and increase your due diligence activity.
- Some rich listers have stepped into the philanthropic limelight with extraordinary gifts – Steve Morgan of Redrow, David and Heather Stevens (Admiral) are highlighted, but the giving list (tucked at the back of the magazine) is mostly the usual suspects. Will those giving now in response to Covid19 become long term philanthropists and will we start to see their names on the giving list regularly giving a significant % of their wealth away?
Fundraisers…. this is your challenge.