Alliance magazine, which is dedicated to the subject if high end philanthropy, sent me an email yesterday that promoted an article with the following teaser:
The Financial Times noted in 2012 that ‘in less than a decade, philanthropy offices have become an integral part of the world's largest private banks and wealth management providers'. Among those cited by the article were Barclays Wealth, Kleinwort Benson, Standard Chartered and JP Morgan Private Banks. Many others, national and international, could be added to the list.
Why do banks offer advice on philanthropy?
I really don't think that is hard to answer. It's because philanthropy and tax avoidance go hand in hand.
It's not as if the magazine does not know it. In the same email another teaser for an article confronting philanthropy's image problem says:
Jenny Hodgson, executive director of Global Fund for Community Foundations, examines why the word philanthropy 'inspires such contradictory reactions and emotions'.
She writes, 'On the one hand, there is philanthropy as a positive force. On the other, philanthropy is seen as part of the problem: the product of systemic failures of current political and economic structures, which have resulted in large concentrations of wealth in the hands of an elite and unaccountable minority.'
And that's a process tax avoidance,and a tax system that quite absurdly encourages this particular form of accumulation of private wealth, has helped create. Let's not pretend otherwise.
And, yes I have been funded by foundations. But not privately controlled ones.
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I couldn’t agree more.
Don’t you receive funding from a private trust?
http://www.taxresearch.org.uk/Blog/2015/07/24/new-sources-of-funding-for-tax-research-uk/
I said so in the post
And provided a clarification
Andrew, does your determination to score points obscure your ability to read?
You’re not funded from private foundations. So, you’re funded from public foundations. But there’s no such thing as public foundations, foundations are an innately private entity. So, what you mean is you’re funded from public funds, so funded by the state. It would be much clearer if you said that in the first place.
A publiuc foundation is one where there is clear accountability, and not to a person who might personally gain from that, in my opinion
But you did receive funding from a private trust. You said so yourself. We can have no idea about its accountability as you won’t say who it was. Shouldn’t you have politely refused the money, in view of your high profile anti-secrecy stance?
I accepted because I was entirely satisfied by the source of funding and the need to protect the main trustee: you may be aware of the harassment many have suffered
What I am entirely satisfied by is that this fund came nowhere near the structure I have criticised
That was my choice: I have been completely open about it
Having worked with quite a few charities and NGOs over the years, I’ve had reason to observe philanthropy first hand. We frequently hear about how we should not criticise high income earners because they are also generous philanthropists. Or that they are better judges on how to make ‘social investments’ with their money than the government and hence their avoidance of tax is somehow OK.
My conclusions are very different and for the following reasons:
– its been known for many years that the wealthy are less generous donors as a proportion of their income than poorer people
– this is despite the donations of the wealthy having little or no impact on their general standard of living – they can afford it
– wealthy people can off-set those donations against tax at the higher rates of tax, further reducing the impact on their incomes
– they tend to choose their personal interests and activities such as the arts or theatre – rarely do they fund difficult social issues
– as donors they are high maintenance, expecting a high level of personal service, further eroding the value of their donations
There are great exceptions to this – celebrities, business people and others who are generous to difficult causes and who are very often the sort of people who want to avoid publicity. That in itself is telling about their motives. Whilst the Gates and Clinton foundations are not always popular with the traditional large NGOs, Ive seen enough of them to be clear that they are serious about using their wealth to have a big impact on big, important challenges. No-ones perfect.
So yes, I think the tax and philanthropy nexus is very dubious. I’m reminded again of Warren Buffet, a serious philanthropist and also someone who has expressed grave doubts about the injustice of the tax system
Agree with a great deal of that