As well as giving an historical survey, any discussion of philanthropy has to recognise the particular context of London today. The city has changed remarkably over recent years. After the postwar decades, during which London’s population and economy shrank, London re-established itself as perhaps the world’s leading global capital – an economic, cultural and intellectual superpower that attracts migrants, visitors and investors from around the world. London’s spectacular rebirth has brought many benefits. The capital now generates around a quarter of the UK’s wealth and closer to a third of its tax receipts. Much of the UK’s soft power – its influence around the world – is exercised through London. And its wealth, cosmopolitanism, youth and creative vitality can make it a very exciting place to live and visit.

Need in London

At the same time, the city has struggled to manage the pressures that come with growth. The rising cost of housing, transport, childcare and other necessities mean that, for all London’s wealth, inequality has increased, and poverty and exclusion remain stubbornly high. ⁷ To take just a few examples:

• 50 per cent of London’s wealth is owned by the richest 10 per cent of households, while the bottom 50 per cent own just five per cent. ⁸ After housing costs, 27 per cent of Londoners live in poverty, a figure six percentage points higher than the rest of England. In two east London wards – Bethnal Green and Poplar & Limehouse – more than half of children now live in poverty. ⁹
• Seven in ten households in temporary accommodation in England are in London, a 48 per cent increase on the five years previous. In 2017, over 80 per cent of these households contained children, and 66 per cent were BME. ⁸
• Rough sleeping has increased by around 50 per cent in the last decade, and is currently almost double the figure, relative to population, of the rest of England. ¹¹
• Though the capital has the best performing schools of any English region in terms of GCSE attainment, educational inequalities remain stark. By the age of 16, the most persistently disadvantaged children are twelve months behind non-disadvantaged children. ¹² Attainment in Barking and Dagenham, the worst performing borough, is 21 per cent behind the best performers – Redbridge, Kensington & Chelsea and Harrow. ¹³
• London has the widest health inequalities in England. Children born in Kensington and Chelsea are half as likely to have a low birth weight as those born in Redbridge. ¹⁴ Just 13 per cent of children in Richmond are obese, whereas the figure rises to 29 per cent in Barking & Dagenham. ¹⁴
• Though London’s overall crime rate has fallen over the last two decades, violent crime is on the rise. The latest figures from the Crime Survey for England and Wales (CSEW, formerly the British Crime Survey) detail a 37 per cent increase in robbery in the last year. In the first three months of 2018, there were 45 murders across the capital, almost double the number in the first three months of 2017. ¹⁶

London as a national and global capital of giving

The story told above – of a booming world city struggling to manage the downsides that come with success – is in many ways reflected in recent developments in giving.

Just as London is one of the world’s leading financial, academic and creative hubs, so it is also a leading centre of philanthropy. Indeed, the characteristics that have ensured its success in the former fields have also ensured its success in the latter: a great infrastructure and built environment offer, a global language, a convenient time zone, a highly trusted legal system, openness to migrants from different backgrounds, and the sheer depth and range of its services and talent pool.

As a result, London is very much the national capital of giving. Though London accounts for only around 15 per cent of the UK’s population, it is home to:

1. 18 per cent of English charities – around 24,200 in total. ¹⁷
2. 11 of the UK’s 20 largest charities (e.g. Cancer Research UK, Save the Children, The Salvation Army and the British Heart Foundation). ¹⁸
3. 47 per cent of all English charitable income and 68 per cent of total charitable assets.
4. Around a quarter of the UK’s social entrepreneurs. ¹⁹
5. Up to one-third of all social investment activity. ²⁰

The 2015 More to Give report by City Philanthropy Trust estimated that annual cash giving from London citizens, foundations and businesses stood at £5.6bn. ²¹ This is equivalent to an impressive 40 per cent of the total non-governmental voluntary income ²² for all UK charities. ²³ Nearly three-quarters (73 per cent) of all donations or grants over £1m made between 2008 and 2017 have come from London-based donors, totalling £9.8bn. ²⁴

Moreover, just as London’s economy has grown relative to that of the UK, so has its charitable sector. To give just one example: according to our analysis of Charity Commission data, the number of charities based in London has risen by seven per cent over the five years to 2015, even as the number of charities outside London has fallen by one per cent (see Table 1).

London is not only a national capital of giving – it is also a global one. Many foreign philanthropists choose to give through London, whether by setting up their own family trusts or in other ways. London has been described as a “global centre of civil society”, playing host to thousands of internationally focused charities. These encompass large organisations like the Red Cross and Amnesty International as well as small innovative startups. As Danny Skriskandarajah has noted, London has been at the forefront of recent creative global philanthropic organisations and movements such as Band Aid, Drop the Debt and Make Poverty History. ²⁵ The international nature of London’s voluntary sector is reflected in the makeup of its workforce. The proportion of Londoners employed in the charitable sector is a little higher than across England as a whole – 3.2 per cent compared to 2.7 per cent. ²⁶ But 17.6 per cent of London’s voluntary sector workforce are non-UK nationals, compared to 5.4 per cent across the rest of England. 5.4 per cent of London’s voluntary sector workforce are EU nationals, compared to 3 per cent across England. ²⁷

Given London’s role as both national and global voluntary sector capital, it’s not surprising that London charities have a distinct profile in terms of size. Seven per cent of its voluntary organisations have an annual income of more than £1m, compared to 2-3 per cent for other regions. 68 per cent of charities with over £100m annual income are based in London, with none in the North East or Yorkshire and Humberside. ²⁸

29. National Council of Voluntary Organisations (2018). UK Civil Society Almanac 2018. London: National Council of Voluntary Organisations.

London’s local charities

While London is undoubtedly an important national and global centre of giving, it does not necessarily follow that this favours London causes. London is sometimes presented as a hotspot of charitable activity and contrasted to “cold spots” or “charity deserts” in other parts of the country. ²⁹ But this picture fails to fully recognise the difference between where charities are based and where they operate: London is home to many large charities that don’t confine their activity to the capital, with some (particularly international charities) operating entirely outside of it.

In an attempt to unpick these issues, Centre for London has partnered with the Third Sector Research Centre at the University of Birmingham to conduct an analysis of Charity Commission data based on charities’ “Area of Benefit” (AOB). This analysis has enabled us to distinguish between those charities that work nationally or internationally, and those that confine their work to the local area – London as a whole or a part of it. Clearly, this doesn’t entirely resolve the issue of where charities conduct their work: many national charities also give to London causes and deliver services in the capital. However, our analysis does allow us to say more than previous studies about the types of charity operating in London at an aggregate level, and how this compares to the rest of England (see Table 1).

31. Centre for London and Third Sector Research Centre analysis of Charity Commission data.

This analysis confirms that London dominates when it comes to charities working nationwide and internationally. In particular, nearly half of charities that work both nationally and internationally are based in the capital. This gives London a much higher per capita charity count than England as a whole – 2.8 per 1000 population in the capital, compared to 2.4 across England. The figure rises to an impressive 117.6 charities per 1000 resident population in the City of London – though these are of course largely the creation of the City’s businesses rather than its residents. Yet London has considerably fewer locally focused charities per head of population than the average for England as a whole – 1.4 per 1000 people, compared to 1.9 nationally.

We need more research to understand exactly what is going on here. This finding does not necessarily mean that London’s population is underserved. It could be, for example, that London-focused charities are larger or more effective than those that operate outside the capital.

But the finding does at least raise the concern that, for all its standing as a capital of charitable activity, parts of London are going underserved.

Our analysis also reveals a strikingly uneven distribution of charities across the capital. The pattern is most pronounced for national and international charities, which tend, like businesses, to concentrate towards the centre of the metropolis. But the same pattern can be seen in relation to London-focused charities. Perhaps surprisingly, the City of London is home not just to a disproportionate number of international and national charities, but to London focused ones as well – 33.7 London-focused charities per 1,000 people (see Figure 2). Inner London as a whole also has more than its share of London focused charities, with Camden, Hackney, Islington, and Westminster all with densities above 2, while Barking and Dagenham, Bexley, Brent, Hounslow and Newham all have less than one local AOB charity per 1,000 residents – way below the national average.

We also looked at changes in the number of London focused charities over the five years to 2015 (see Figure 3). As already mentioned, we found the overall number of charities in London has grown by seven per cent, with every borough seeing some growth, even if that growth was unevenly spread. At one end of the spectrum, Tower Hamlets and Newham saw a 16 per cent increase; at the other, Havering saw only a one per cent increase.

However, the picture looks very different when we look exclusively at locally focused charities (see Figure 4). Indeed, while London might have experienced a growth in the number of charities overall, it saw a modest reduction of around 100 (1 per cent) in charities with a local area of benefit. Again, the pattern looks very different according to borough. Hackney and Tower Hamlets have seen a big increase in locally focused charities – no doubt reflecting their relative economic dynamism and thriving startup scenes. Most other areas have seen a fall. This includes Inner London boroughs like Westminster (-4 per cent) and Southwark (-4 per cent), but is particularly notable in Outer London boroughs, including Croydon (-7 per cent), Kingston (-5 per cent), Bromley, Waltham Forest, Hounslow and Hillingdon (all -4 per cent). The decline in local Outer London borough charities is particularly concerning given that London’s economic geography is changing – with poverty spreading from its heartlands in “old London” to the outer boroughs. ⁷

In summary, our analysis suggests that while London has continued to attract national and international charities, locally focused grassroots provision appears to have declined in many boroughs, especially Outer London ones, just as poverty rates have been rising in Outer London.

Statutory funding

This report focuses on giving by individuals, corporates, and trusts and foundations. But to fully understand patterns of giving in London, we also need to review developments in giving by the state.

The reliance of many charities on public sector income – nationally, one-third of all charity income comes from statutory sources – means that the sector has been hit hard by austerity, and particularly by the dramatic cuts to local authority budgets. Borough spending per head (excluding education and public health) fell by a fifth between 2010/11 and 2017/18; cuts to “discretionary” services, including support for the voluntary sector, has fallen much further. ³¹ Local government cuts are also likely to fall most heavily on locally focused charities, and seem likely to be an important factor in the decline of London-focused charities across most boroughs that we identified earlier.

According to a recent NCVO and Lloyds Bank Foundation report, London-based charities with incomes of under £1 million saw local government funding fall by 50 per cent between 2008/9 and 2012/13 – the second largest reduction of any region of the UK. ³² The London Voluntary Service Council’s (LVSC) Big Squeeze report series, which ran between 2009 and 2013, provided an insight into the experience of many charities. ³³ In the 2013 edition, just over half of organisations had seen their overall funding reduced from the previous year, 23 per cent were expecting to close services the following year, and 14 per cent held no free reserves. The final report pointed to the double impact of government austerity, simultaneously increasing levels of need and reducing income for charities working in the capital:

“The cumulative impacts on Londoners and VCS organisations mean that there is little flexibility to rise to new challenges and it is difficult to see how this problem of growing needs and decreased income will be resolved.”

The LVSC, The Big Squeeze, 2013

There is no doubt that for many smaller London-focused charities, fundraising has become increasingly difficult.

“All sorts of projects now find themselves having to raise money from multiple different sources, when they’d previously relied on public sector grants […] and what that’s thrown into the mix is a lot of people who don’t really know how to go about it.”

Individual philanthropist

“80 per cent of my time is now spent on fundraising and finances, I have no time for my team […] it’s unbelievable.”

Director, volunteering charity

Civil society and London’s governance

London’s recent history has been characterised by important changes in the city’s civic life and governance. On the one hand, 2020 will mark 20 years since the creation of a new pan-London level of government, centred on a directly elected Mayor. This has proved a strikingly popular innovation: while the Mayor’s role brings relatively little hard power, all three Mayors to date have quickly established themselves as important national as well as London figures – the voice of the city in UK and international affairs. ³⁴ On the other hand, London’s boroughs have, as we have seen, experienced dramatic cuts in their funding – thereby weakening what is already, by international standards, an underpowered system of city government. ³⁵

The impacts of austerity on London’s communities and voluntary sector have challenged traditional boundaries between statutory service provision and programmes funded by grant-makers or other private sources. This has in some ways opened up new space for dialogue and collaboration between the public sector and independent funders, but significant barriers still remain. A recent report by local authority think tank New Local Government Network (NLGN), for example, found that a lack of shared understanding of respective responsibilities and success criteria, together with continued concerns around organisational independence, had the effect of limiting collaborative work between councils and independent funders. ³⁶

At a pan-London level, the Greater London Authority’s (GLA) interaction with the voluntary sector has often been relatively narrowly focused and reactive. On the positive side, London’s first two Mayors both supported charitable fundraising efforts in various ways: Boris Johnson in particular saw the promotion of philanthropy as an important part of the Mayor’s job, and took a lead in setting up the Mayor’s Fund (a charity located in City Hall developed to focus on improving life chances for young Londoners from less advantaged backgrounds) and the Foundation for Future London (which supports the transformation of the Olympic Park into a cultural and education hub). But neither Mayor showed much interest in strategic support for London civil society or London giving in particular. The main interface between the GLA and civil society in recent years has been Team London, the organisation set up within the GLA to further the volunteering legacy of the 2012 Olympics.

Recent years have, however, seen a number of indications that London’s government institutions, independent funders and voluntary sector organisations are developing a more strategic relationship. The catalyst for some of this work has been the Review of the Future of Civil Society Support in London, commissioned by infrastructure bodies London Funders, London Voluntary Service Council (LVSC) and Greater London Volunteering (GLV) in 2015, and funded by City Bridge Trust -the Charitable arm of the City of London Corporation. The final report of the commission was published in 2016 as The Way Ahead, and calls for a new era of cross-sector collaboration:

“The GLA, elected representatives, London Councils and independent funders should bring civil society into strategic planning and decision making about the future of London.”

The Way Ahead ³⁷

Mayor Sadiq Khan and the GLA have commissioned research and launched consultations
to inform a new Civil Society Strategy, together with a separate review of the GLA’s role in supporting philanthropy. The City of London Corporation and City Bridge Trust were already more active, and had launched various strategic initiatives to cultivate greater philanthropic giving within and beyond the Square Mile, promote London as a centre of ‘investing for good’, support local placed based giving schemes and other initiatives to strengthen giving in London. But following a review of its own strategic funding activities in 2016, the Corporation has hired a new Head of Philanthropy to “effect more collaborative working and reduce the propensity to operate in silos”. ³⁸ At the time of writing, the Corporation has also embarked on a programme of research around giving by financial and professional services firms.

This report

Through an evidence-based approach to the analysis of giving in the capital, this report aims to influence and cultivate the new landscape of emerging (but still nascent) strategic and cross-sectoral collaboration.

To achieve this, we present a detailed analysis of five “giving sectors”:

• Individual donating and volunteering

• High Net Worth philanthropy

• Trust and foundation grant-making

• Corporate philanthropy

• Social investment

Following this sector-by-sector analysis, we present a comparative assessment of the state of philanthropy in London today. Addressing both particular sectors and the philanthropic landscape as a whole, we also make recommendations to increase the quantity and quality of giving in London.