25th August 2020
As we look to repair the damage the pandemic has wreaked, the task is daunting. Philanthropy will play a vital role in the recovery as it has in the crises of the past.
Conscious investments, Corporate Social Responsibility and Environmental Social and corporate Governance (ESG) will become common place. Impact investing will lead to long-term systemic change, but philanthropy provides a flexible and rapid response to societal need. Philanthropists can take more risks than large organisations, making decisions faster; they bridge a vital gap.
PL: What does the third sector look like in the wake of Covid-19?
AJ: The pandemic will see the sector lose £12.4bn this year1, with the potential loss of 10-30% of charities before the year end. Thankfully, the public have responded with enormous generosity and concern. The record level of NHS volunteers stepping forward and fundraising campaigns such as ‘Captain Tom’, the 99-year-old war veteran, that raised over £32 million for the NHS are testament to this.
PL: What have we seen from philanthropists?
AJ: Hundreds of millions of pounds in funding has been put forward in the last few months. Philanthropists can take more risks than foundations with grants, but both have responded with greater flexibility on grant restrictions, bringing forward multi-year grant pledges and spending down annual budgets to free up funds.
Private Client intermediaries report more conversations about charitable giving with existing clients and see an increase in first time donors. Perhaps this is due to clients having time to tend to their ‘To Do Lists’, having always wanted to make donations and being moved to action by the desperate societal need. Philanthropic giving can be deployed rapidly, with greater flexibility than large public funding bodies. Philanthropy is vital to responding to funding gaps and providing immediate support to charities.
PL: The fastest growing philanthropy vehicle – Tell us more about Donor Advised Funds?
AJ: A Donor Advised Fund, or DAF, is an ‘Own-Name Foundation’ charity account operated by a not-for-profit, such as Prism. It’s a time, cost and tax effective alternative to a private grant making foundation. A donor can call their account what they like or remain anonymous, gift to charities around the world, donate a mix of assets including cash, shares, and property, and have a balance of charitable assets managed by a firm of their choice. The governance, compliance, due diligence, and administration is taken on by Prism, so the donor has peace of mind their charitable giving is in line with UK charity law. The increasingly fierce regulations of the charity sector requires trustees to have extensive knowledge, discouraging those who might previously have become trustees. With £1.5bn2 in DAFs in the UK, the DAF market is growing and will continue to do so. Prism services the mid-upper end of private clients who want a swift, efficient, and personable philanthropy service.
PL: What about the Collective Funds? Has the structure helped to mobilise funds towards Covid-19 relief?
AJ: Yes, our clients are incredibly busy and run programmes internationally. Simplicity is something they value greatly when managing their charitable projects. Prism’s Collective Fund structure offers a flexible service to groups of individuals looking to run charitable initiatives. It’s an alternative to a standalone charity that can provide an immediate response to urgent situations such as the pandemic, natural and human disasters. Under Prism’s auspices, groups carry out their charitable activities whilst benefiting from Prism’s charitable status, a full administrative service and our governance and compliance oversight. Two examples of the fantastic Covid-19 support work include:
Compassion London who prepare and deliver free meals to those in need during the Covid-19 crisis, including NHS staff, vulnerable and elderly groups, children, and families in London. The group is currently working together with The Felix Project, who provide food and other supplies for Compassion London’s kitchen operation. The operation was initially run in an industrial kitchen in Islington, it moved to Wembley Stadium’s kitchen where Leon’s team of volunteer chefs prepare up to 10,000 meals a day and they are now based in Alexandra Palace.
RefuAid work with host communities to source solutions for both refugee and local populations. Aiming to foster greater integration, RefuAid support access to language, tuition, education, finance and meaningful employment. As a direct result of their work with the NHS, Department of Health and GSC, a new role within the NHS was created in April to support overseas-qualified doctors who do not yet have full registration. This saw over 100 individuals who had fled war torn countries provide support to the Covid-19 response in hospitals around the country.