MPs are calling on government departments to create match fund schemes for charities, which are in line with their policy objectives, such as tackling climate change and supporting marginalised communities.
The move would help boost philanthropic activity and ensure large donations and funding are more democratically accountable, according to a report by the All-Party Parliamentary Group (APPG) for Philanthropy and Social Investment.
“Match funding offers a powerful incentive to engage new donors to give by offering the opportunity to double, or even triple, their contribution,” states the APPG’s report Unleashing the Potential of Philanthropy and Social Investment.
“Match funding schemes can be developed in line with policy objectives, thus providing democratic accountability to philanthropic activity, and offering the basis for effective partnerships between communities, government and donors on shared concerns.”
Levelling up
This includes the government’s ‘levelling up’ commitments to improve employment prospects in disadvantaged areas, supporting marginalised groups and backing the arts and culture sector.
It cites the example of £2m funding by Social Investment Business, Access, The Ubele Initiative and Create Equity to support for Black, minoritised and ethnicity-led charities. This was matched by £2m of loan money from the government's Recovery Loan Fund.
“If match funding were coupled with support for civil society organisations to grow their capacity for developing donor relationships, it would enable long-term transformative change in our giving culture.”
Another example cited by MPs is match funding for the higher education sector through the Higher Education Funding Council for England. Match payments of £143m triggered £580m of giving, said the APPG.
“The fundraising capacity-building offered through this programme continues to benefit the higher education sector to this day,” states their report.
It adds: “Future schemes might also incorporate “blended” social investment options, where government match funding is made accessible to income-generating social enterprises as well as non-profit organisations, thus building financial sustainability, leverage and reach into the design of the match funding programmes.”
The MPs report stresses that while “philanthropy and social investment cannot replace government spending” it can be aligned “with national priorities, because like public spending, philanthropic funding is always made for public benefit”.
The APPG’s co-chair Rushanara Ali, Labour MP for Bethnal Green and Bow, said that “targeted policy changes” around philanthropy “could unlock £11.4bn in giving and social investment.
With my co-chair of the APPG on Philanthropy and Social Investment @danny__kruger, it was
— Rushanara Ali 💙 (@rushanaraali) November 3, 2022
fantastic to launch our report “Unleashing the potential of philanthropy and social investment”.
Targeted policy changes could unlock £11.4 billion in giving & social investment. pic.twitter.com/11EEL9XjkJ
Other recommendations made in the report include appointing a senior civil servant to be a philanthropy and social investment champion within Whitehall. Also, being called for is improvement in civil servants' knowledge of philanthropy and support the development of data on the contribution of philanthropy and social investment to the economy and UK society.
In addition, MPs want to see an overhaul of the charity and financial regulatory regimes to see if they “would be better served” by being more targeted and “recognising that funders, donors and social investors are distinct groups within civil society”.
Danny Kruger, Conservative MP for Devizes, who also co-chairs the APPG, added that the report’s recommendations offer a “great opportunity” to “maximise the huge potential of private wealth for public good”.
Under Boris Johnson’s premiership Kruger had been commissioned to carry out a review into the voluntary sector. However, the MP later admitted that this review had not “sufficiently addressed the needs” of large national charities.
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