Make an effect with a cause

The fascination surrounding the new philanthropists who set up foundations to give away their vast global fortunes hides a more important truth: in the US and the UK it is still the public who remain the most important source of funding for the charitable sector.

Since 2001 in the UK individual giving has grown from about £7bn ($13.8bn) a year to just under £9bn. By comparison, donations made through foundations stand at £3.3bn. In the US, $223bn is given by individuals, compared with $36.5bn by foundations.

Yet, while in the US personal giving has a well understood role in society, individual donors in Britain remain uncertain about what they are doing. Acts of generosity remain hedged with confusion: is this the right organisation to give to? How do I know my money will be well used? Shouldn’t the government do this?

There are practical steps anyone can take to guide their giving, no matter what amount is involved.

Here’s how not to do it: I recently met a newly-qualified lawyer of few resources, who gave £5 a month to a well-known animal charity. I asked if that was because she really cared about animals. “No,” she said, looking at me as though I was mad, “what I really care about is the trafficking of women.” So why was she giving to the animal charity? Simple: because it had stopped her in the street.

Step one: it’s your money and giving it away is your chance to do something with it directly, to change lives and societies. Crucial to making your giving effective is to decide what it is you really care about or who you’d like to help.

Step two: make a list: you may remember the carers who looked after a sick parent; the street child who begged from you on holiday; a relative suffering from mental illness or addiction. You may care passionately about the destruction of the rainforest, or the violation of human rights in Zimbabwe.

You can refine your list by splitting it between your community and your passions, or national and international, or choosing a single cause.

Step three: use the internet to find and short-list organisations working in the chosen areas. Think about what approach appeals to you most. Take trafficking as an example: do you want to support a group that counsels and rehabilitates trafficked women; a group that researches the causes of trafficking; or a group that tries to tackle those causes in the countries of origin? Or do you want to support one at each level? Be strategic, whatever the amount.

Step four: ask yourself is this appropriate? The space for effective giving lies in the gap between what individuals can do for themselves and what the government is prepared to do. It does no good to replicate government funding or to undermine individual independence. Check that what is proposed does no harm – look at the recent case of the “orphans” from Chad whom French families offered to foster. They turned out to have been snatched from their families.

Step five: weigh up the organisations you have selected. Make sure that your donation puts funds where change can happen. A gift can be like a stone thrown into a pond: done well, it forms ripples of change. Done inefficiently, it sinks.

For UK charities try an independent site such as Intelligent Giving (www.intelligentgiving.com) or New Philanthropy Capital (www.philanthropycapital.org). For international information there’s www.universalgiving.org or www.globalgiving.com. If you are interested in local issues, find your community foundation and ask them for advice (www.communityfoundations.org.uk).

Step six: check that the group you want to give to is a charity at www.charity-commission.gov.uk for England and Wales or www.oscr.org.uk for Scotland.

The last question is how much to give? One per cent of net income is an acceptable minimum, but if you want to assess levels of giving go to www.intelligentgiving.com, click on How to Give and then on How Much to Give This calculates how much you’d have to give, proportionately, to match the generosity of Elton John, Bill Gates, or the average American. It’s fun to use and that is at the heart of what giving should be: rewarding, enjoyable and effective.

Jo Andrews is the Senior Consultant at the Institute for Philanthropy and former director of the Sigrid Rausing Trust