UK does not need a ‘US style’ culture of philanthropy

26 February 2014

The UK should not aspire to a US model of philanthropy and tax incentives -  they are not replicable and are a unique product of US social, political and historical factors, according to a report released today.

Although the USA is top of the world for giving, with the average person giving $694 a year to charity compared to $247 (£148) in the UK, the report debunks the argument that we need a more American charitable culture.

‘Give me a Break: Why the UK should not aspire to a “US-style” culture of charitable giving’, released by CAF, also highlights the barriers to adopting a US culture of giving. It argues that too much emphasis has been placed on how we can copy the US rather than developing a uniquely British giving culture.

Contrary to popular belief, UK tax incentives for giving are more generous than in the US and less open to abuse or fraud. US tax deductions are also biased towards those with higher incomes due to the requirement that those claiming deductions must file an itemised tax return.

In reality, the US model of philanthropy is not the most suitable for the UK. Apart from the differences in tax incentives, donations in the US go disproportionately to religious causes and higher education (45% in total), whereas UK giving is more spread across a variety of causes.

The report also highlights how attitudes to wealth and perceptions of personal wealth are different in the US than the UK, and can not be easily addressed by policy makers. The US does not have an organised welfare state equivalent to the UK and has a historic commitment to the idea of limited government, creating a fertile space for philanthropically funded programs that the UK does not have.

The CAF World Giving Index 2013 found last year that the US was the most charitable country in the world, with the UK coming in 6th globally.

The report, the first of a series of discussion papers that CAF will be releasing throughout the year, argues that we should look to US levels of giving as a benchmark to aim for, but the methods the UK uses to achieve this must be different to those used in the US.

To launch the report, CAF, which promotes charitable giving and provides financial services and social finance to not-for-profit organisations, is holding a parliamentary event today (Wednesday) comparing the culture of charitable giving in the UK and US.  The Minister for Civil Society Nick Hurd MP, the Shadow Minister (Cabinet Office) Lisa Nandy MP and the report’s author Rhodri Davies, will be speaking.

Rhodri Davies, author of the report and CAF's Policy Manager, says: “It is fantastic that policy makers are keen to boost levels of charitable support in the UK, but we must stop obsessing over why we lag behind the US.

“Each country has different cultural factors which shape attitudes to giving and the US model isn’t the best fit for the UK.

“It is important to remember that our tax incentives are amongst the most generous in the world and British people are incredibly generous, with 76% giving to charity in a typical month.

“Instead of constantly comparing ourselves to the US or trying to mimic them, policy makers should be celebrating our healthy culture of giving and looking for measures to boost giving that fit well with our society and culture.”

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