I have a text for this afternoon and it comes from one of the most generous people in Britain. The author’s name will be revealed shortly. What he said was this:
“We have to learn what it means to be a member of the human race”.
As befits the final presentation of this conference, I promise that I will be positive and optimistic by demonstrating what a practical and moral response to current challenges could be, a response that should give us and future generations hope for the future.
I say this at the outset because you are about to hear an analysis of our current circumstances that might seem anything but optimistic. Britain has much to be proud of but before we can talk about building bridges between ourselves and towards a better future we must be honest and confront what is going wrong.
To put right what is going wrong will be challenging. New bridges must be built between government, politicians, the public, private and voluntary sectors and all of us as citizens.
This means significant changes in responsibility, roles and behaviour. This will not be easy but I believe it is possible.
Four months ago the Grenfell Tower fire seared the conscience of the nation.
A few days later, I had lunch with a friend in Kensington, only a mile away from the disaster. She is married to one of Britain’s most senior business men. In addition to expressing anguish about the loss of life and the suffering of the survivors, I was struck by what else she said.
She was appalled by the inequality and social divisions in Kensington, dismayed by the response of local and national politicians and wondered, I quote: “What has happened to the public realm? People like us are not paying enough tax”.
I have given you this perspective deliberately because it reflects the views of several of those I have worked with in my professional life, namely very wealthy people with a social conscience.
One of these is Sir John Madejski, the patron saint of our conference and the author of today’s text.
I will try to spare John’s blushes. His good works are well documented so I won’t repeat them all.
However, amongst many acts of outstandingly generous philanthropy, John has endowed The John Madejski Academy in Reading. This is what John told me as reported in my first book GIVING IS GOOD FOR YOU published in 2013. His remarks are prescient given what has happened since then:
“The fundamental thing about life is that we enter and leave with nothing. What we have when we are alive is merely borrowed and money exists to be used.
I believe in sharing my good fortune with my fellow citizens.
I worry that our sense of community, and the sense of obligation to it that seemed so strong when I was young, has broken down. This is a serious problem with serious implications for our country.
I thought I was well aware of the problems facing young people in Reading and did not need to be convinced that I had a role to play in helping to revitalize run-down schools and give youngsters a better start in life.
After we had opened JMA, I asked the head teacher to describe the beginning of the school day which she said started with an eight o clock breakfast club.
‘We are not running a hotel’ I remonstrated until she explained that for some kids, the first and sometimes the second meal may not be provided at home. Hungry children do not make either happy or good pupils. Giving children a start in life has taken on a new meaning.
Most of us are so ignorant and so stupid about the reality of life today. I was amazed when I discovered how people live just down the road. The depth of ignorance amongst the middle classes is truly shocking”.
John Madejski is amongst the minority of wealthy people in Britain who think about the needs of society and are prepared to do something about it.
It is indeed a problem that only a minority of the very rich are public spirited but there is a bigger problem that John has identified, namely that both our national and local sense of community has been eroded. That has implications for ALL of us.
Our topic today is about building bridges post- Brexit.
I believe we need to rebuild bridges irrespective and regardless of BREXIT. Our Kingdom may be united but our society is not.
For many reasons, society is under strain. Globalisation, neo-liberalism, “austerity”, automation and artificial intelligence can all be lined up as culprits. They are beyond our scope this afternoon.
I wish to focus on how our society works and what we, as members of society, have to do in order to sustain our way of life, for ourselves, and perhaps even more importantly, for future generations.
The accumulation of wealth at the very top whilst the incomes of the majority stagnate must surely be one source of the feelings of discontent and disengagement today.
Encouraging more of the wealthy to give is one way of building bridges between the 1% and the 99%.
In the 1980’s, there were estimated to be 5 billionaires living or based in the UK compared with over 130 currently.
In 2014, according to Office for National Statistics, the wealthiest 10% of households owned 45% of total aggregate wealth, an increase of 21% over the previous two years.
However, the evidence suggests only a minority of the wealthiest are philanthropic. Coutts Bank estimates that only 10% of clients who sell a business engage in significant sustained philanthropy thereafter.
You may be wondering what philanthropy and charitable giving have to do with anything. For many, philanthropy reeks of the Victorian age and is only for the super- rich.
My definition of philanthropy is the commitment of time and talent as well as money, with emphasis upon the word ‘commitment’.
My job this afternoon is to convince you that almost anyone can be a philanthropist, regardless of wealth, and that all of us need to contribute much more to society.
Why?
Because the challenges we face are beyond the resources of the state.
It is obvious that philanthropy and charity cannot possible solve all our nation’s problems, nor should they, but I will demonstrate to you how philanthropy can be a game changer when in partnership with the public and private sectors.
The key point is that Britain today is not the same as it was but with less public money. Britain is a different country from what it was 20 years ago.
Perhaps most significant has been the changing role of the state. For example, although public expenditure may continue to increase in real terms, local government spending in the poorest parts of the country will have been cut by more than 50% between 2010 and 2020.
Inevitably, this must change what local authorities do and the services they are able to provide.
When I started research for my book OUR COMMON GOOD in 2014, my initial concern was for the voluntary or beyond profit sector. How could the sector cope with more demand if government support for charities is in decline and charitable giving, according to the Charities Aid Foundation, has been stagnant for decades and may even be in decline despite a colossal increase in personal wealth?
Moreover, CAF reports that charities obtain their financial support from a small civic core, the 9% of the population responsible for two thirds of all charitable activity.
Clearly, annual charitable giving of £10.6 billion cannot compensate for public expenditure cuts of £20 billion in local services or make more than a dent in annual public spending of £814 billion.
In order to help find the answer to this fundamental question about who will provide more, I started by drawing up a balance sheet of the strengths and weaknesses of our country:
On the credit side:
We are a free people with a vibrant and healthy democracy.
We have a record rate of employment and our economy continues to expand, albeit more slowly since the most recent recession.
My generation has not had to fight a war and is the wealthiest that has ever been.
We have a national health service free at the point of delivery.
Younger people are the healthiest ever, have instantaneous access to limitless knowledge and the ability to travel almost anywhere.
Our creativity in terms of the arts, science and technology is recognised internationally and our creative industries are amongst the fastest growing parts of our economy
We are an open and diverse society and that makes Britain an attractive place to live and in which to invest.
On the debit side:
We have the longest period of wage stagnation since the Napoleonic wars and many of the employed are paid so little that they need state benefits to survive.
There are people in our country who cannot afford to feed themselves.
There is a growing wealth gap between rich and poor.
Intergenerational inequality means that the young are not as well off as their parents and grandparents and this trend looks like getting worse.
Mental illness is on the increase, particularly amongst the young.
Increasingly unaffordable housing threatens to become a catastrophe for young people.
There are huge disparities of wealth and resources between regions resulting in social division and weakened communities.
Growing lack of confidence and trust in authority may lead to alienation, polarisation and political extremism posing a threat to our liberal democracy.
These are all symptoms of failure. The failure of governments of all parties to tackle these over decades suggests that we look elsewhere for solutions.
If we need to find new ways of overcoming problems and to create new opportunities, we should look to the voluntary or beyond profit sector. The best pioneering charities and philanthropists have been amongst the most progressive forces for centuries:
The abolition of slavery, the creation of social housing, hospices, votes for women, the decriminalisation of homosexuality and the preservation of our rural and cultural heritage are amongst the causes that define our country today and they would not have happened without campaigning charities led by visionary leaders and funded by personal donations.
I have learned from researching and writing my book that contemporary Britain is defined as much by the personal generosity of our predecessors as much as by the State. And I suspect most people would be surprised how much philanthropy contributes to society today.
For example, the ability of the National Health Service to look after us rests upon a bedrock of academic medicine that is almost entirely funded by charitable giving.
A £20 million grant from the Wolfson Foundation has enabled a major research programme into Alzheimers which would not otherwise have been possible.
Pioneering research into the growing mental health problems of young people is being led by a new charity, MQ, that is entirely funded by philanthropy.
The role of philanthropy in tertiary education is becoming more important, particularly at post-graduate level, not least for research and in support of those intent upon a vocational career.
We should ask ourselves this: who will provide the intellectual capital needed by our knowledge economy that will allow us to compete with other countries who invest more than Britain does?
Our cultural achievements and industries drive one of the fastest growing parts of our economy. This would be impossible without philanthropy and corporate sponsorship.
Many of the poorest would have no access to Legal Aid, cut by both Labour and Tory governments, without philanthropy.
Philanthropists and philanthropically funded think tanks such as the Resolution Foundation have led the campaign for a national living wage.
Philanthropy gave birth to social housing and we urgently need more of both now.
For my research, I talked to more than a hundred people across the country from Belfast to Blackpool via Bromley-by-Bow in east London. They were philanthropists, social entrepreneurs, academics, think tanks and leaders of business, charities, communities and local authorities.
I came to realise that our concern should not be just for the future of the voluntary sector and civil society. As 2016 and 2017 unfolded, BREXIT, the effects of climate change, terrorism, the Grenfell Tower fire, unprecedented international migration, the election of Trump and the growth of political extremism should encourage us to think about our values, about what makes our society work, who is responsible for the public realm and the prospects for our democracy.
The fact is that we can no longer depend upon the state for the social, cultural and intellectual capital we need to sustain our society and our economy. At present, it is not clear where this investment will come from.
Let us examine some of the principal challenges we face.
What are the facts about inequality in Britain?
Government may be entitled to say that income inequality has been stable for years, although think tanks forecast that it will increase again. The real problem is inequality in the ownership of wealth.
As Martin Wolf, chief economics commentator has said in the Financial Times:
“Why should inequality concern us? This is a moral and political question. It is also an economic problem. There are two economic consequences of rising inequality- weak demand and a lagging process in raising educational levels”.
He went on to say:
“Less inequality is likely to make economies work better by increasing the ability of the entire population to participate on more equal terms.
The costs of rising inequality go further. To my mind, the greatest costs are the erosion of the Republican ideal of shared citizenship. Enormous divergences in wealth and power have hollowed out republics before. They could well do so in our age.
The rebellion against elites is in full swing…we face the danger that the gulf between economic and technocratic elites on the one hand and the mass of people on the other is too vast to be bridged.
At the limit, trust might break down altogether. Thereupon, the electorate will turn to outsiders to clean up the system. We are seeing such a shift to trust in outsiders right now, not only in the US but also in many European countries…
Large numbers of people feel disrespected and dispossessed. This can no longer be ignored”.
We are now hearing about intergenerational inequality. Is this generation the most spoiled in human history or is it jinxed?
I turned to David Willetts, former Conservative government minister, executive chairman of the Resolution Foundation, and author of the book: The Pinch: How the baby boomers took their children’s future and why they should give it back.
Willetts tell us that in 1974, the average 50 to 59 year- old earned about 4% more than the 25 to 29 year- old. By 2008, it was 35% more.
The Resolution Foundation reports that hourly pay for those in their twenties is now lower than at any time since 1998.
Those born between 1985 and 1994 were the first who were not better off at the same stage of their lives than their forbears.
Willett’s comments:
“We used to assume that social mobility would slowly improve. That is why it was such a shock when in 2005, evidence came out that social mobility had declined. This would suggest that young people were losing out in the jobs market even before the recession struck. During the years from 1997 to 2007, which we now see as a debt-driven boom, youth unemployment was actually rising.
We do our best for our own children even whilst our society gives a raw deal to young people as a whole – this is the reason for declining social mobility. We are better at providing for our own children than looking after the interests of the next generation as a whole. We are indeed better parents than we are citizens”.
Intergenerational inequality is nowhere more stark than the current housing crisis.
According to the Resolution Foundation, nine out of ten people under the age of thirty- five will be unable to own a home within a decade.
Any would be home owner earning the national average wage of £26,500 will find that 91% of properties in England and Wales are currently beyond their reach.
The Resolution Foundation also confirmed that the high cost of housing, the brunt of it borne by the young, is undermining living standards. The key finding is that the increase in annual housing costs since the early 1990’s is equivalent to a 10% increase in the basic rate of tax.
Out of every pound of government expenditure on housing, £25 billion a year and rising, 95p is spent on housing benefit and only 5p is spent on building new homes.
Solving the housing crisis is beyond the scope of my book and we are not going to fix it this afternoon but I must confess that of all the research I undertook, I was most shocked by what I learned about the state of housing in Britain today. If we continue with the current disastrous policy, the problem will be even worse for future generations and very damaging for social cohesion.
We are failing the young. This is the clearest evidence yet that bridges need to be built between mine and younger generations.
By drawing attention to the impact that housing policy has on society and upon the young in particular, should remind us of the role that philanthropy and the voluntary sector have played in the provision of social housing in the past and to ask what role they could play in the future.
150 years ago, the most enlightened Victorian entrepreneurs acknowledged social need in a way that is conspicuously absent today. They were social pioneers. George Peabody invested in social housing. This was enlightened capitalism.
Peabody invested in bricks and mortar not only to provide homes but also to change ideas about housing.
New thinking is needed now. Might it be possible to create a multi-billion philanthropic fund designed to create social housing?
I asked the current chairman of Peabody, Lord Kerslake (a former head of the home civil service) for his opinion:
“The role of philanthropy could be two-fold. Whilst government remains fixated on home ownership, it is also interested in expanding private rentals following the US model. Philanthropists could take the lead and build apartment blocks (at a contractor’s rather than a builder’s margin) and subsidise social rents from lets at market rates.
Would a new Peabody or group of Peabody’s make a difference? It could but it would be important to hang on to the tradition that providing housing is not just about bricks and mortar. The Peabody mission is about the ability to live a good life.
Any new Peabody initiative would be about excellent design, green spaces, access to good schools and public transport. If I were a philanthropist now, I would want to address a range of issues to make a life better for people.
Philanthropists have invested in academies because they understand the importance of education and the need to invest in it. Can we recreate that same sense of legacy and mission in terms of housing?
We need more people now to emulate what Peabody did in the nineteenth century. Look at the legacy, an initial gift of £150,000 has created so much social capital in terms of homes and communities and improving the quality of life – and, a balance sheet of billions.”
Bob Kerslake and I spoke in December 2015. We could not have imagined what was to happen in Grenfell Tower in June 2017.
There is an alternative, there is evidence that there are enterprising and socially responsible people who can give the leadership we need and that, regrettably, our politicians seem unable to provide.
Let us look at east London. For many the first indication that east London has changed was the opening ceremony for the London Olympics in 2012. An area once blighted by poverty and neglect has been and continues to be transformed and the Olympic Park is only a part of what is now Europe’s largest regeneration area.
Regeneration began more than thirty years ago and involves a cast of thousands but one man, Andrew Mawson, can claim a leadership role that has been consistent from the moment he became a United Reform Church minister in Bromley-by-Bow in 1984. Mawson is now a cross bench peer and chairman of one of Britain’s leading consultancies specializing in urban regeneration.
His adult life has been all about the regeneration of east London. His ability to bring together local people, local authorities, businesses, trusts, foundations and others who shared his vision for how society could be made to work and to serve the interests of communities and those who live in them.
Mawson told me that making sure that the interests of the consumer and the public are foremost is one of THE challenges of our times.
As a young man, Mawson found himself on his first Sunday as a minister addressing a congregation of twelve elderly people. The future seemed bleak and he realised he had no idea what he should or could do to revive the fortunes of a church that seemed doomed in an area where the state ran almost everything, unemployment was 47% and communities were breaking down.
When he was approached by a young dance teacher who wanted to create a dance school, he had no idea that by allowing her to rent space in his church, he had started a social enterprise that proved to the first step towards the remarkable transformation of this part of London.
This modest venture was to prove seminal. The dance school prospered and was followed by children’s nurseries and reclaimed garden squares. Unwittingly, Mawson had created a business model that worked. He told me:
“It was interesting that in this community where there was a massive dependency culture and much suspicion about meaningless promises from politicians, a strange new word had appeared. Integrity. People were promised a nursery and there it was. Perhaps there were other things we could do together”.
Mawson believes that health and social care has its priorities the wrong way round because too often the patient does not come first. He won over initially hostile local authority leaders and, in the teeth of opposition from the NHS, built the first integrated primary healthcare model in the country.
This is a community development trust. The patients own the building, not the doctors or a pension fund. They created a beautiful garden and built a cloistered building made of the kind of handmade bricks that were used for the new Glyndebourne opera house.
Mawson was asked to create a housing association in Poplar but decided to establish a community owned company that now has 9000 properties and runs a £1.7 billion regeneration programme that also includes a school, the health service, local doctors and a building company.
Mawson explained:
“This is how a community is recreated and transformed by housing, health and education coming together and sharing interests. When it came to building a new £16 million health centre opposite the new St Paul’s Way school, we tried to do so with the NHS but it was a nightmare because they were too slow. So the housing company, which was concerned about the health of its residents, took responsibility for building it.
Our housing company in Poplar is a social enterprise and we operate like a charity. Welcome to an entrepreneurial community business. This is what entrepreneurial community public service looks like. All profits go back into the community. We are about building communities but not based on fantasies coming out of Downing St called The Big Society or the Third Way”.
Our final example of best new practice is a philanthropic initiative that began in Bolton nearly 10 years ago and is now a charitable enterprise called Onside Youth Zones serving 30,000 young people in the North and the Midlands. Youth Zones are coming to London next year.
Youth zones give young people quality, safe and affordable places to go to. This is a public and private sector partnership that aims to empower the young and to combat deprivation and unemployment.
I visited the Youth Zone in Oldham, Lancashire and was impressed by the quality of the new building, the range of sporting and cultural opportunities available to young people in one of the more deprived parts of the North and the work being done to enable the most damaged youngsters to return to education and to find employment.
Capital set up costs of c. £6 million are divided between the local authority and the private sector and the local authority provides 40% of annual running costs, averaging £1 million a year, with the balance being found by local businesses and both local and national benefactors.
Typically, youth related crime has been reduced by 50% and there has been significant increases in youth employment. Treasury statisticians confirm that the return on public investment is six times using anti-social behaviour and employability as metrics.
This public/private partnership is pioneering because the public sector buys into a charitable objective on the charity’s terms. This is significant because philanthropy is convening private and public resources at a local level to meet local need.
I asked Bill Holroyd, entrepreneur, philanthropist and chairman of Onside Youth Zones, about the significance of his charitable initiative. He told me that youth services had been severely cut and they were filling a vacuum left by a public sector in retreat. He believes that the state has a leadership role to play with regard to philanthropy but government was showing no leadership and the public sector was too inflexible. I quote:
“We realised that we would have to do this ourselves. We were asked (by the state) to do all sorts of things that would have ticked boxes but we knew they were wrong for us. That is why we started the charity. We had to be pioneers and do things in the way that we believed would deliver results.
This was unique: private sector, public sector, voluntary sector, volunteers and young people all working together.
The key thing is partnership. If each sector tried to set up a Youth Zone on their own they would fail. The combination of all four partners makes a great community effort possible.
In creating Onside, we discovered this massive desire for people who want to do things in their own communities.
Many of our communities are becoming increasingly divided and intolerant. That is why it is so important for charity and the private and public sectors to be working together. In our Youth Zones, there is reflection in all parts of the community. When everyone works together, the results are unbelievably productive”.
Here is a model and a vision for the future that is flourishing in the present. Bridges are being built within communities and between the sectors.
The state may be redrawing its boundaries and providing less but it has not been allowed to abdicate from its responsibilities and is assuming a new enabling role by working in a real partnership with others on equal terms that offer a real return on investment of public money.
Local business is sponsoring local initiatives, often for the first time, and discovering a way of supporting their communities in ways that are more meaningful and rewarding than conventional corporate social responsibility.
Box ticking in both the public and private sectors has been abolished.
Youth Zones rely upon volunteers as well as professionals with a waiting list in of 350 in Bolton keen to serve their community.
Critics will say that philanthropy represents private interests, is unaccountable and cannot provide comprehensive cover.
To which I answer: the kind of partnership between the sectors I have just described means that public and private interests are allied to serve the public interest and thereby philanthropy becomes accountable.
Only the state can provide comprehensive cover and, regrettably, the post code lottery suggests that this maybe too much to expect.
Our world is changing. Economically, politically and socially, this is a defining moment for Britain. We must adapt.
What might be the solution?
- We need to persuade the state to adopt an enabling role rather than a providing role by working in partnership with others.
- Government must understand that philanthropists are prepared to support the public realm but only in a genuine partnership with the public sector.
- The opposition needs to understand the limitations of the state and that the social, intellectual and cultural capital we need is more likely to be generated by bringing all the sectors together to release the creative energy of the most public spirited.
- Politicians of all parties need to listen and to understand that creative initiatives and solutions are more likely to be found at local and community level. Bottom up often works better than top down
- The private sector needs to understand that social commitment and responsibility is a requirement of employees, customers and clients and is in the long term interests of business
- Public services such as the police and the NHS can show that partnership and collaboration with others can reduce demands upon their services.
- Charities need to adapt in response to changing needs and expectations and be more prepared to collaborate with others and share resources.
If the state provides less, we need an initiative that encourages more citizens to do more, not least to empower communities, to heal division and disengagement.
We need a new narrative. A smart politician would work with the other sectors to create a broad social movement with a vision that inspires the many, a vision that persuades people that their participation matters and will make a difference to their own lives as well their fellow citizens.
The new political message must be: there is such a thing as society and we are all responsible for it. Voluntary redistribution, the giving of time and money, is as important as tax in sustaining society.
Philanthropy and social enterprise are for everyone and have the power to connect people to society and to their communities.
In partnership with the state and others, philanthropy acts as a catalyst to generate positive change and we need more of it.
The Step Up To Serve project to encourage young people to volunteer is to be welcomed and applauded but an understanding of citizenry and of commitment to the common good should be at the heart of education for all young people.
They should leave the school with a qualification that demonstrates to higher education and to employers that by volunteering they are aware and socially responsible citizens who are committed to the Common Good.
Yes, I acknowledge the political leadership needed is conspicuous by its absence. That means that the case for reviving a concept for the Common Good falls to the rest of us.
I will leave the final word to John Madejski who knows all about social responsibility:
“We have to learn what it means to be a member of the human race. We must teach empathy. Part of our problem today is that people, institutions, businesses and government lack empathy and this is reflected in a weakened sense of community and social obligation. By encouraging young people to think of others, they will find that they become empowered themselves. They will learn to understand what they can do for others, whatever their circumstances. You don’t necessary need money to care about someone else”.
John Madejski has proved that this true. He has given away millions but believes that the time he continues to give is of equal if not greater value. That is something all of us can do. Thank you John for being such a great example and for being a brilliant bridge builder.
@johndnickson
Our Common Good here for £20!