We all know that Americans are the most generous givers. But are they really?
A new report about family foundation philanthropy in the US, UK, Germany and Italy, by the recently established research centre on charitable giving at London’s Cass Business School, is a welcome contribution to the rather thin field of international comparisons of philanthropy. Yes, say the authors, the top 100 US family foundations blow the others out of the water when it comes to total giving – splashing three times as much as their British counterparts.
When compared as a percentage of national income, however, the top 100 US foundations fare less well: accounting for only 0.05% of America’s Gross Domestic Product compared to 0.1% of GDP in the UK and 0.03% in Germany. (Italian family foundation philanthropy seems to be tiny, totalling barely $100 million. In other words, a single American philanthropist, like Eli Broad, is giving away more money each year than the top 100 Italian family foundations!)
The report also provides evidence of the revival of philanthropy in Britain, showing a 10% surge in giving in the most recent year measured (compared to 8.2% in the US if you ignore a distortingly massive gift by Warren Buffett to the Bill and Melinda Gates Foundation).
Yet let there be no British triumphalism. Overall, Americans are significantly more generous than any other developed nation, which suggests that the giving culture is more deeply embedded across donors great and small. British giving, it seems, is disproportionately dependent on those top 100 foundations. (And the British figures are also pumped up the nearly $1 billion a year given away by the Wellcome Trust, founded by an American).
British foundations are also less generous when you look at their assets. Again, comparing the top 100 US and UK foundations, the value of the British foundations’ assets is half that of their American counterparts, whilst their giving is only a third as big. As we have argued before, British policymakers should perhaps borrow the US rule that foundations should pay out at least 5% of the value of their endowment each year.
One big flaw with the report is that it relies largely on data from 2006-07, before the economic crisis. This is not to blame the authors, who have done the field a great service by pulling together this comparative data. This is their second annual report, we hope that this series will continue so we can see how the story evolves. Hopefully next a year some of the Italian super-rich will have stepped up to the plate.