Philanthropy in a time of recession – will anything give?

ANALYSIS: Despite the economy’s darkening shadow, Irish people must keep tackling social inequities, writes Jackie Harrison

OVER THE last few weeks, a number of people have asked me whether the current downturn in the economy will sound the death knell for philanthropy in Ireland, which is after all only in its infancy. A long-established UK-based trust recently reported its endowment lost more than £10 million in value in less than 18 months, highlighting the direct impact financial markets have on philanthropic organisations.

The current downturn in stock markets will significantly curtail the income and hence money available for distribution for some philanthropic organisations in the short to medium term. Notwithstanding turmoil in the financial markets, Philanthropy Ireland considers there is still significant potential to grow philanthropy in Ireland and that philanthropy has a particular role to play in straitened economic times. It will continue to invest in activities and initiatives which will give rise to a fairer, culturally rich and advanced society.

It is difficult to draw a precise picture of the state of philanthropy in Ireland due to the dearth of data. On behalf of the Government-established Forum on Philanthropy, Philanthropy Ireland has commissioned research on the level of philanthropic giving in Ireland. The research will be published later this year and will provide the most comprehensive figures to date on such activity in Ireland.

Establishing a baseline for philanthropy will help the monitoring of giving, as well as new and innovative practices. Initial feedback from the research shows philanthropic giving has been increasing in recent years, albeit from a very low starting point. It also points to a strong desire by the community and voluntary sector, arts organisations and higher education for a diversity of funding sources so that they can be less dependent on the State.

The economic downturn is likely to lead to increased demands on community and voluntary organisations which deal with those most affected by any cuts in Government services and supports. Philanthropy has the potential to help meet such shortfalls and to enable organisations to provide the types of innovative and speedy solutions that will be required.

Even if the downturn represents a rowing back on the heady days of the Celtic Tiger, with a knock-on effect for individuals, families and businesses, Ireland has become a wealthy nation. With only 12 per cent of the population giving in a planned way, there is potential for more strategic and effective philanthropic giving.Less frenzied economic times may also provide the opportunity to define and implement what the appropriate infrastructure around giving would be.

International research suggests a number of things need to be in place to have a supportive climate for giving. First, we need regulation of the community and voluntary sector to promote efficiency, effectiveness, accountability and transparency – in this context the early adoption and implementation of the Charities Bill must be a priority. Second, we need efficient tax and legal frameworks that encourage giving (Philanthropy Ireland and Irish Charities Tax Research Ltd are undertaking research into this area in the coming months). Third, there is a need for readily available information on giving in Ireland, including how to give and causes in need of support (the Philanthropy Ireland Guide to Giving provides a roadmap but other resources are also needed). The final factor needed is public support.

There can be no doubt that philanthropy conjures up mixed reactions in Ireland. There is a tension between positive (for example, the Niall Mellon Township Trust and the Atlantic Philanthropies investment in third-level education) and negative connotations (for example, the perception of philanthropy as the domain of the very wealthy or its association with tax exiles).

There is also a culture of private giving wherein many donors choose to remain anonymous, thereby reinforcing the lack of role models and understanding of the benefits donors receive from giving. There is a particular set of issues around the role of the State and how private giving links in, with a strong view among some that sectors such as health and education should be funded solely by the State, as private funding for these areas could drive greater inequities in Irish society. In its new strategy (to be launched in October), Philanthropy Ireland sets out its vision for 10 years’ time. The view is there will be a widespread culture of giving and it will not be unusual to give away wealth or income in a planned way each year.

Philanthropy will be making a positive difference across many aspects of Irish society. Philanthropy will be recognised as a positive activity and there will be evidence of joint ventures between the State and private philanthropy (although not as a substitute for State funding of essential services). Ireland will have emerged as a centre of excellence for philanthropy in Europe, demonstrating leading-edge philanthropy and a commensurate infrastructure to facilitate its development.

There are varying views on some of the elements of this vision – in particular in areas around the role of the State and private funders. What is healthy is that there are signs of a real debate, as evidenced by considerable media coverage in the past six months (with some important catalysts, including Chuck Feeney’s first public interview on radio, the US ambassador’s dialogue on philanthropy, and President Mary McAleese’s delivery of the inaugural Ray Murphy Philanthropy Ireland Lecture).Such a debate is much-needed and will be an important contributor to ensuring that an appropriate model of philanthropy develops in Ireland – in tune with our culture, history and values.

Jackie Harrison is chief executive of Philanthropy Ireland © 2008 The Irish Times