People often bemoan the idea that private charity should start playing a bigger role in the UK, claiming that people already give to and do enough for charity. However, the truth is really that charitable giving in the UK is not nearly at the level that it should be, and as a result many good causes are underfunded, and many institutions or services are too reliant on the government for their survival.
Whilst the UK is slightly more charitable than other European countries such as Germany or the Netherlands, it still lags far behind the charitable behemoth that is the USA. In 2006 2.2% of the USA’s GDP was given to charity, double that of the UK. Whilst there are strong incentives towards charitable giving in the American tax system (with charitable giving being tax deductable), this does not entirely explain why Americans give more. Particularly, one might note that whilst the UK tax system is not as generous towards charity, charitable giving is still tax deductible for higher rate tax payers and charitable giving can be topped up by government funded gift aid. It seems rather than being entirely to do with the tax structure, it is much more to do with culture.
I’m not talking about the culture of the super rich, as the UK has some notable historical charity giants such as Joseph Rowntree that rival Rockefeller and Gates in their generosity. Rather it is the culture of the quietly wealthy. This is primarily because most people in the UK have an entirely inaccurate perception of how wealthy they are, often tinged by mistaken notions of class, or who exactly are ‘middle earners’.
A poll conducted in April this year by YouGov showed just how skewed perceptions were. Individuals were asked to rate themselves from 1 to 10, with 10 being the richest 10% of the population and 1 being the poorest 10%. Staggeringly only 24% thought they were in the richest half of the population and almost no one thought they were in the richest 20% of people. This perhaps explains why the UK is bad at giving. Why would you give if you thought you were relatively poor?
One only has to look back to when the ‘additional’ 50% rate of income tax was introduced to again see how flawed perceptions are. The number of journalists that decried this attack on ‘middle earners’ was illustrative, as of course people earning over £150k a year are not middle earners. Yet in the eyes of the journalists and pundits, who of course viewed themselves as middle earners, they were. One could also notice the criticism levelled at the Liberal Democrat ‘Mansion Tax’ idea, with many seeming to operate under the ridiculous illusion that a house valued at over £1m was unexceptional.
It is interesting to note again that figures from 2006 show that the richest 10% in America gave 50% of charity, whilst in the UK they gave a pitiful 21%. Wealthy Americans seem to have a better perception of how wealthy they are and thus their duty to charity. I know many people who have worked in university or private school phone campaigns who have found in their calls that many people who are clearly relatively wealthy often claim they simply cannot financially support their alma mater because either they’re too poor and there’s richer people to do it.
The contrast with American institutions’ fundraising clout puts the UK to shame. Indeed many American private schools actually factor fundraising into their general budget, since it is such a reliable source of income, and don’t just using it for unique projects or bursaries, but rather to keep the lights on and pay the teachers.
The UK is not living up to its charitable potential. Those who claim they are far too poor to give to charity on top of other commitments need to appreciate just how fortunate they are for charities to get their fair share of cash in the UK. People in the UK need to start acting their wealth.
(For the reference of readers, a household income of above about £75,000 puts you in the top 20% and the mean income for an individual is about £23,000 a year).
