A comparative study which tracks, for the first time, the growth and change in family foundations reveals an increase of 10% in UK family foundation charitable spending in 2007, and that family foundation philanthropy benefited from wealth gained just before the global economic downturn.

Family Foundation Philanthropy 2009 is the first analysis of the charitable spending of the largest 100 charitable family foundations in the UK, Germany, Italy and the US where there is a strong presence of family foundation philanthropy.

The study reveals the differences between UK and US expenditure, but also contrasts these with the two continental European countries for the first time.

Top family foundations in the countries under study contribute a total of £5.5billion (sterling equivalent).

Professor Cathy Pharoah, author of the report and co-director of the Centre for Charitable Giving and Philanthropy at Cass Business School, found that the charitable expenditure of the largest 100 UK family foundations was worth £1.2billion and increased by 10% in real terms in 2006 – 2007.

This compared with 33.5% growth in the US, however this high percentage was largely due to the major investment by Warren Buffett in the Gates Foundation: if this is excluded, the US growth rate decreases to 8.4%.

In Germany, the largest foundations had a charitable expenditure of £491 million, and data for Italy was less complete but revealed that 12% of foundations are family foundations and that their combined charitable spending was a minimum of 90 million euros.

Professor Cathy Pharoah commented: “The last few decades have seen escalating private wealth built on the success of global markets and capital flows, and the creation of many new foundations, in countries with different political, fiscal and regulatory regimes.

"Germany and Italy were selected for comparison because both countries have long, though very different traditions of family foundation philanthropy, though they lack the same level of published financial information as the UK and the US because similar reporting is not mandatory.”

The results of the analysis show that family foundation philanthropy is impressive in Germany, given that the post-war years in East Germany undermined the role of private philanthropy. In the US, individuals turn to foundations because they see them as a vehicle by which social impact and change can be achieved, partly due to their independence, social and financial resources.

Charles Keidan, director, the Pears Foundation and co-editor of the report, said: “The collaboration between researchers and foundations across four countries has led to important advances in the reliability, accessibility and transparency of information about the nature and extent of philanthropy. Our Foundation is delighted to continue our partnership with the Centre at Cass in pursuit of these objectives.”