The gift of giving

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

One of the few feel-good stories since last year’s invasion of Ukraine has been the resilience of charitable giving even in tough times. In the UK, despite a spike in inflation and cost of living squeeze, the recent annual report from the Charities Aid Foundation said donations to charity in 2022 still reached a record £12.7bn, up from £10.7bn the year before. In the US, charitable giving fell slightly, but that reflects in part the extraordinary generosity of many Americans the year before, who donated their one-off Covid-19 payments and reduced commuting costs to charity, rather than a general turn against giving.

The charitable impulse is a universal one. The Indonesian concept of the joint bearing of burdens — gotong royong — may be why Indonesia tops the CAF’s World Giving Index for the sixth year in a row. But the world’s most generous givers on a range of measures include both the foremost superpower, the US, and countries with comparatively meagre resources, such as Liberia and Kenya. How people interpret and act upon that universal impulse, though, varies from country to country.

In the US, the second most popular area for charitable donation is usually the relief of poverty. In Britain, animal welfare comes third by donation size. In most countries, however, religious organisations — whether devoted to the teaching of children, care of the elderly, the condition of the world’s poor or the preservation of our climate — top the rankings. That reflects the global picture that the religious, regardless of income, are more likely to give to charity. As societies become more secular, it may become a colder world for charitable causes.

For the moment, charitable giving remains strong, as do large gifts by the world’s wealthiest. But both charity in general and philanthropy in particular are changing. Non-financial gifts, such as volunteering, have yet to return to pre-pandemic levels, while the decline of cash means there are fewer one-off donations and more giving by direct debit or standing order. And the world of philanthropy, while still dominated by individuals, owes increasing amounts to donations from foundations and corporations.

Many of these changes are welcome, others less so. The shift towards direct debits and away from one-off donations enables charities to better plan for the future and gives them a higher degree of certainty. Charitable foundations, such as those set up by Bill and Melinda Gates to tackle global poverty, have brought much-needed rigour and focus to philanthropic giving. It is right, and welcome, that corporations see it as part of their role as good citizens to be charitable organisations, whether through running their own charities, matching the fundraising of their employees or other efforts.

But the age of the individual philanthropist also brought with it greater prominence for unusual or unfashionable causes that can otherwise be neglected, for instance working with former prisoners or to rehabilitate serious criminals. Companies, often buffeted by interfering politicians and having to balance the needs of a diverse workforce, may also find that their giving is more limited and less politically controversial than the giving of individual high-value donors.

The decline of in-person activities, whether through fundraising or volunteering our services, is a regrettable consequence of the pandemic and the change in how many of us live and work. Ultimately, the enduring strength of philanthropy reflects a deeper and happier truth about us: that we value not only the sharing of burdens but each other’s common humanity. The continued gift of money and compassion is one to be proud of, and brings its own joys to those who donate. But in the next year, let us hope that we continue to relearn the joys of community, proximity and the gift of our time.