Ebenezer Scrooge weeps at his own potential gravestone, terrified by the visions of the Ghost of Christmas Yet to Come. The spirit shows that people will rejoice at his death, unless the old miser changes his ways. The city of London has just received a similar warning, courtesy of Policy Exchange, a UK think tank.
Levels of UK philanthropy fall well short of those in the US—even excluding the large sums Americans give to religious causes—and have failed to keep up with the huge growth in the financial services industry, according to a new Policy Exchange study. Britons give just 0.7% of their income to good causes, compared with 1.7% in the US. And this at a time when income inequality is reaching near-Dickensian proportions and public suspicion of the city is rising, amid fears of a banker-led credit crunch.
In mitigation, the city can argue that taxes and the cost of living in London are higher than in the US, so many city workers don’t necessarily feel rich; and that the UK’s welfare state crowds out many obvious areas for private initiative. No one wants to give to organizations if the result is a matching cut in public funding.
Besides, it’s only in the last five years that city folk have in significant numbers racked up the kind of dynastic wealth that puts its name on the wing of a museum. Many of these are still young enough to be busy making money and not yet ready to knuckle down to the serious business of giving it away. Philanthropy can wait.
Even so, the most significant difference is cultural. Americans give more because philanthropy is more deeply ingrained in US life. To catch up, it will take more than a few individual examples, such as Stanley Fink of Man Group and Michael Hintze of CQS, who started giving at a young age. It will take institutional initiatives.
Policy Exchange suggests city firms set up “opt-out” charitable accounts for their staff, so that workers who don’t want to give would have to identify themselves. And it encourages firms to provide opportunities to engage staff with good causes. If city workers gave 5% of their pre-tax salaries and bonuses, UK giving would reach US levels. That is a worthy goal—and one that might even lead people to say of the city, as they did of Scrooge after his visit from the ghost, that it “knew how to keep Christmas well if any man alive possessed the knowledge”.