So I’m not sure that Bill Gates and Michael Bloomberg the Mayor of New York are right or even sensible to spend their money - £50 million a year ($100 m ) for 5 years - on an anti smoking educational campaign (announced in New York 23 July).  Apparently 1 billion people could die of smoking this century. 

At the same time a child dies of disease every 3 seconds of every 24 hours. 

Smoking is obviously an addiction, but it’s not impossible to give up.  I speak from personal experience. I’d like a vote on that $500 million Gates and Bloomberg are giving away.  I think it should be spent providing food, water and shelter for young children and their parents.  Young children, unlike smokers,  can’t do anything to help themselves.

In fact I’d go several steps further.  I’d like a philanthropy tax on everyone in the world whose income is over £10 million per year.  95% tax.  We would all get a vote for the charities that would benefit. 

OK I know it’s not going to happen, it would be expensive and unworkable they will say.  That’s what people always say although I don’t really believe it.  But we have just got to do something about all those children dying, and I challenge you to come up with a better idea.

Today the leader of the Roman Catholic Church in in Washington DC.  Pope Benedict, due to an accident of Italian history, is a head of state, the Vatican, as well as a religious leader, and he has been received by President George W. Bush as a Head of State at the White House.  Today is also the Pope’s birthday.  He is 81.  Happy Birthday Holy Father they sang.  He’s pretty good for his age.  Gives hope to elderly heads of state everywhere but don’t tell President Mugabe.

At the same time the Prime Minister of Great Britain, Gordon Brown, is making a secret visit to America.  Or at least you would think it’s secret if you read the newspapers in the UK.  He’s not getting the same kind of reception as the Pope.  But then he’s not a head of state (that’s Queen Elizabeth).  And he’s not 81.  It’s not even his birthday.

Some UK newspapers (well nearly all of them actually) are making mischief because Gordon Brown has multiple problems: The economy (stupid), tax, Iraq, Zimbabwe, upcoming elections, charisma (actually lack of it), and foolishly he’s not the former Prime Minister Tony Blair who was, it is now reported, charismatic and even (since recently) Roman Catholic!!  At the weekend it was reported on the BBC that there is a even a call TB’s return as prime Minister - but don’t hold your breath.

Gordon Brown’s visit has attracted roars of silence from the US media who are interested in the Pope.  And why not?  The Pope’s a colurful figure dressed in white.  And he has the confidence and respect of a vast number of people.

But Prime Minister Gordon Brown has a very significant point in favour which changes everything.  He is a democratically elected leader.

The Pope, whose first pronouncement in the USA sadly had to be an apology for the immoral and illegal behaviour of some of his priests, isn’t democratically elected.  If she were she might be Pope Tracey, for it’s probable that a majority of committed Roman Catholics are women.

And democracy matters, not least to nonprofit organizations.  Philanthropy only functions as it should if the laws that regulate it are just and fair to all.  I’m for democracy.  And religious leaders who aren’t democratically elected by a free vote are fair game if they stray into the political arena.  It’s not just the Pope, it’s the Dali Lama, the Archbishop of Canterbury, Bishops in the UK House of Lords……

Religous leaders come and go according to the rules of their religion, political leaders should be democratically elected.  That is their authority.  Gordon Brown has that authority, and he is in the USA to do a job at the UN, at the White House, in Wall Street.  He’s doing this job for the people of the UK who believe in the democratic process.  Wish him success.

This summary of the story so far sounded about right when I read it a couple of weeks ago: “It was of course all the more drastic in the USA because in fact a lagging expansion of demand has been beefed up by means of an enormous expansion of consumer credit.  (Readers who remember the late 1980s may find themselves on familiar territory).  Banks, already hurt by the speculative real-estate boom which, with the usual help of self-deluding optimists and mushrooming financial crookery, loaded with bad debts, refused new housing loans or to refinance existing ones.  A thousand properties a day were being foreclosed.” 

 In fact this isn’t a paragraph from a recent Financial Times but part of Eric Hobsbawm’s description of the Crash of 1929 (The Age of Extremes, Abacus, p100, 1992).  Hobsbawm comments “it provides a vivid illustration of society’s need for historians, who are the professional remembrancers of what their fellow-citizens forget.”  As someone too old to have been taught any twentieth century history at school, I can recommend this book as a “brilliant synthesis of familiar and forgotten facts and ideas” (Ben Pimlott) and a wonderful read for those like me ignorant of the history and economics of that time.

Another example of our need for historians is the tragedy of Iraq.  Even if the invasion were justified, and I don’t think it was, (although I admit I wasn’t so sure when I marched in London with a million others,) only the war was planned, not the peace.  I wish that I could say that philanthropy could have shown the way but there were no voices loud enough to be heard above the thunder of the helicopters.  However, I knew that I had read something about the similar and far worse situation when Germany surrendered in 1945.  Winston Churchill the British Prime Minister wrote, “the surrender of the German people should be completed by the agencies which have authority over them.  We will never be able to rule Germany apart from the Germans.” (Prime Minister’s Personal Minute, M.474/5, 14 May 1954, Churchill papers, 20/209.)

Has anyone written a history of international philanthropy, as readable and insightful as Hobsbawn and as immediate as Churchill?  I know that it’s a tall order, but in these difficult times, philanthropists and fundraisers need perspective and encouragement too. Remembrancers, please step forward

Frankly, I don’t believe a word of it.  Business doesn’t even do business very well ( sub-prime mortgages, Enron, dot-com bubble, etc) so what possible reason is there to believe that wealthy individuals who run businesses will do charity better?  Why did Warren Buffett hand his fortune to the Gates Foundation?  Because, famously, he sticks to what he knows.  11% increase in his company Berkshire Hathaway’s asset value last year against 5.5% in the Standard & Poor’s 500 Index.

 Years ago I remember a conversation with a colleague in BP’s Public Affairs Department.  BP had decided to run seminars to teach senior charity executives modern business methods because at that time they believed charities were badly managed and BP was well managed.  I welcomed the initiative but suggested that, in order to start on a level playing field, BP stopped selling fuel at the pumps and instead asked for a charitable contribution for each tank full!  Then BP would experience the challenge facing charities.  The plan for seminars was modified.

Most charities don’t sell services, and they need money, so they don’t say No to wealthy individuals.  In some cases generous gifts allow the donor to significantly influence the way the charity is run.  Of course, the donors may be a useful addition to a board, but where is the evidence to say that they are a catalyst for good systemic change and not peddlers of the latest business theories? 

The publicity surrounding huge gifts to charity confers a kind of sainthood that was once only available through religion.  Big donors bask in the reflected glory of the millions of ordinary men and women who care deeply, give generously, and volunteer their services to charity, many with full-time jobs and family responsibilities at the same time.  It is the millions of these supporters that give many charities their enviable brand reputation.  These are the people charity depends on.  The huge gifts may enable charities to do incredible things, but they don’t define what a charity is really about. 

Perhaps most worryingly, donors who give huge gifts are unaccountable.  If gifts over a certain size had to remain anonymous would that mean no more huge gifts?  Of course not.  There are always a very significant number of anonymous gifts, some very large, most small.  But it would reduce the influence of the donors by depriving them of what Prime Minister Margaret Thatcher call “the oxygen of publicity.”

 Charities, at their best, confront the big issues and try and clear up the mess made by human relationships, the natural world, business and politics.  They give ordinary people the opportunity of making a meaningful contribution of time and money.  And for the most part charities survive on relatively small amounts of money.  Let’s have more anonymous donations, and the bigger the better!  More money, and less influence from wealthy individuals.

 For example, I read of Wen Xinjie, heiress to a family property development business, who dreams of opening a school, a hospital and a home for the elderly in part as a not-for-profit venture following the lead of her late father’s lwho set up the firm and made the first moves as an innovative philanthropist.

The government of China has introduced regulations, including a minimum distribution of 8% of assets per year, similar to the 5% rule for private foundations in the USA.  [It’s zero percent in the UK, so trustees can save it instead of spending it on good causes - is this public benefit I wonder?  Public Benefit is the new litmus test for charities in the UK.] 

 In January 2008 the Ministry of Finance and State Administration of Taxation in China is introducing requirements that a “non-profit public welfare association” must meet in order to qualify for tax deductible donations.

However almost all foreign non-profits are banned from registering in China.  I did see an advert in the China Daily (an English language newspaper) for the United Nations’ Children’s Fund, but without any mention of a tax deduction or any other donor tax break.

The most striking indication of charitable activity I saw was an article in the Beijing Review:  “Should Charity Fundraisers be rewarded with a Commission?”  The discussion was similar to others that I have read in the USA and the UK.  The very existence of this discussion demonstrates how far Chinese philanthropy has come in the three decades.  The answer was a qualified Yes.

New China not only appears to encourage philanthropy but also services for major philanthropists.  The China Merchant Bank has announced that it is setting up a Private Bank in Beijing - for the mega-wealthy.  (We didn’t visit the tomb of Chairman Mao; it was closed because he was turning in his grave!)  The bank is targetting those with over £10 ($20) million in assets and already has £6 billion ($12 billion) under management.  Reassuringly for someone like me 25% Scottish the China Merchant Bank is partnering in the venture with the Royal Bank of Scotland.

There is a large advert for the Private Bank in the International Airport which gave me an unworthy thought.  Could this all be window dressing for Olympic visitors?  Impossible I mused.  China is investing a billion US dollars a day via its Sovereign Fund in the West according to the World Bank, so the money is really there. 

Philanthropy in China could be an important catalyst for democratic change.

 (Reading what I wrote over 3 weeks ago, I also wonder what impact the US subprime mortgage fiasco is having on the plans of charities and donors in China.)

 But now I have assembled a list of subjects I want to blog about.  The first is how to start to look for funding internationally.  I receive numbers of emails where this is the basic question. 

The first part of the answer is to make applications to grantmaking trusts and foundations that fund internationally.  How do you find them?  Well, Chapel & York has just published the Directory of American Grantmakers 2008-2009.  It is the 4th edition, completely revised, and contains the profiles of over 700 US foundation grantmakers that offer grants to charitable organizations, and in some cases to individuals, outside the USA.  It’s a great place to start.  Grantmakers are indexed by the countries and geographical areas they fund, and the kind of work they support, e.g. arts, civil society, economic development, education, etc.  It costs GBP24.95 (about US$50) plus shipping, or GBP9.50 (about US$20) for a pdf download by email (no shipping costs but 17.5% value added tax where applicable).  You can order online www.chapel-york.com or telephone +44 1342 871910. 

Chapel & York also publish directories of grantmakers in Europe, Asia Pacific, and shortly Africa Middle East.  So why start with the USA?  Because there is more money available for international projects from the USA than anywhere else, and because the application process is straighforward because it reflects a single language and tax and legal system.  Think of Europe, bigger, perhaps more money, but with all those different languages and legal systems plus the European Union!

Everyone who orders the directory in hard copy is invited to nominate a charity to receive a free pdf download.   We have called it Donate a Download.  We want to help charities in developing countries find funding.  The directory has a useful chapter about researching and making an application to a US foundation.  But the offer to Donate a Download has been too much of a challenge to some of our customers.  Only about 10% have donated.  (One very major UK charity has donated one to itself - I hope that they pass it on!)  We may be demonstrating just how little contact nonprofits have with their sister organizations in the third world.  Or is it like my blogging, just too much urgent work, and it will be done tomorrow?

 Also on my list to blog about:  what are the most significant issues and happenings in the world of international philanthropy, and what’s happening in China?  I’ll do it tomorrow.

A couple of months ago, the head of the charity (let’s identify him as BD) found the Chapel & York website www.chapel-york.com   BD believed he had identified an organization that would raise the funds for his charity, namely the UK Fund for Charities.    I explained that the UK Fund for Charities is a registered charity in the UK designed to help donors who want to take advantage of Gift Aid and suggest to the UK Fund a donation to a non-profit outside the UK. The UK Fund doesn’t find the donors.  The non-profits that are Associates of the UK Fund’s International Programme find their own donors.  In fact, initially, the non-profit has to find the UK Fund, and this is exactly what BD’s already done.  The UK Fund reviews potential Associates to ensure that if they were in the UK they would qualify as a UK charity, and are, therefore, qualified to receive a garnt from a UK charity. 

Now, about Gift Aid for those unfamiliar with the complications of the UK tax system:  
Gift Aid enables a UK charity, in this case the UK Fund for Charities, to reclaim from the UK taxation authority, which is called the Inland Revenue, the income tax paid by a donor on a donation.  This increases the value of the donation by the amount of the reclaimed tax (currently an additional 28%) without costing the donor anything extra. 

Back to BD:  I explained that the UK Fund doesn’t do the fundraising.  The non-profit outside the UK has to do it.  We had a disagreement about the description of the UK Fund on the website.  I came to the private conclusion that Case Studies would make the explanation easier to understand. 

BD said that he wanted to open an office in the UK.  Great, I thought, they have supporters in the UK, and these supporters may be potential donors and they may find other donors through their various networks in the UK.  But I asked BD, and so far as I could ascertain there were no supporters.  Without more information from BD I advised against an office.  He didn’t press the point.  If BD has no supporters in the UK, another possible source of funds is UK grantmaking charitable trusts.  I told BD that a very limited number of charitable trusts will fund projects outside the UK, and they nearly all require a partner organization.  I mentioned BOND, a UK network of partner organizations working in developing countries.  At this point BD received in the mail the hard copy information that he had requested from Chapel & York, and he emailed to say that he was definitely going apply to become an Associate of the UK Fund for Charities! I have just emailed back saying No, Don’t, Not Yet.  It won’t raise you any money. 

I have suggested that BD prepares a short description of the work of his organization, including where the organization is located, what it does, who benefits and how the benefit is measured, who does the work and who is responsible for the management, where funding comes from currently, total income and expenditure, how much more money is required and how it will be spent.    I suggested to BD that this short description could be used as an introduction to his organization when he contacts UK charitable trusts that do give directly to projects outside the UK if any suitable trusts can be identified.  It can also be used when he contacts Bond and members of Bond.  I am awaiting a reply. 

In the meantime I would appreciate in your comments, advice and assistance, and so, I guess, would BD, and many other non-profit organizations in developing countries around the world.

 The question is also under discussion in the USA where the tax deduction is an article of faith for philanthropists.  It’s a contest of billionaires as described recently in the New York Times.  Eli Broad, a billionaire, says “The public benefit is significantly greater than the tax benefit an individual receives.  Smart entrepreneurial philanthropists get greater value  for their money than if the government were doing it.”

 But William H. Gross, also a billionaire, wrote in his investment commentary “When millions of people are dying of AIDS and malaria in Africa, it is hard to justify the umpteenth society gala held for the benefit of a performing arts center or an art museum.  A $30 million gift to a concert hall is not philanthropy, it is a Napoleonic coronation.” In an interview he said “I don’t think the public would vote for spending tax dollars on these things.”

I suspect that the public think that charities should primarily help those in need.  In fact, we all know that people give to charities that address issues that have touched them personally, not necessarily to those that help where the need is greatest.  Gift Aid and the tax deduction translate into the public allowing individuals to decide how to allocate money on their behalf.  Sometimes very large sums of money.

 Tax breaks reduce government revenues; and tax breaks enhance the giving of private individuals to their personal interests - the wealthier you already are the more help you receive.  I would like to see a public benefit debate about that.