As Britain steels itself for recession, City philanthropists are focusing on the advantages of a "charity begins near home" approach, according to a new report based on interviews with more than 30 leading donors.

The study, to be published next week by Policy Exchange, the centre-right think-tank, suggests bank chiefs, private equity bosses and asset managers have become increasingly conscious of the benefits of giving within their local communities - rather than to large national or overseas charities - as a way of making their money go further.