UK society would be better if more people gave generously to charity, but how can we achieve this when cultural attitudes are notoriously difficult to shift? With the US being recognised as the most generous country in the world, many argue that we should look at what they do and learn from it. In fact, when Jeremy Hunt was Culture Secretary, he gave a speech offering exactly this prescription. But what if copying the US would actually do more harm than good? Should we really be holding up the US as a paragon for philanthropy?
If you look at how US philanthropic culture outworks, you realise its not that simple, as a new report by the Charities Aid Foundation shows. There are many factors affecting American attitudes to charitable giving that are just not replicable over here. There are also features of their system that we wouldn't want to replicate even if we could.
The first thing to notice about US charitable giving is the huge influence of religion and higher education. Taken together, these account for nearly half of all donations by value in the US, whereas in the UK they account for less than 20 per cent. This clearly reflects deep-seated differences in terms of religiosity and the way college education works that we must take into account when comparing the charitable cultures of the two countries.
There are also significant differences in terms of attitudes to the role of government and towards private wealth between the US and the UK: roughly speaking we're keen on the former and not so keen on the latter, and vice versa for Americans. The antipathy towards government action in the US can cause problems in terms of people falling through the safety net, but it also undoubtedly leaves a fertile space for philanthropic initiatives. Likewise, the generally positive view of those who have created large amounts of wealth and want to do something good with it makes it far easier to be "out" as a philanthropist in the US than it is in the UK, where you are more likely to be viewed with suspicion or even jaded negativity.
We could not easily hope to change these differences in order to drive up charitable giving, as they are rooted in much wider historical and social factors. And perhaps we would not want to change these things in any case.
There are also specific features of the way that charitable giving works in the US that we might not want to replicate. For instance, the US system has an inherent bias towards those on higher incomes in a way that the UK does not. This is because the US charitable tax deduction is only available to those filing an itemised tax return, which is heavily correlated with home ownership (as mortgage interest payments are the most common deduction) and thus also with income. Since the year 2000, when the lower limit of £250 for qualifying donations was scrapped, Gift Aid on donations of any size is available to any UK taxpayer. In this sense our system is much more democratic.
The other feature of the US system that we might be wary of copying is the ability to claim tax relief on donations of clothes or household goods. At first sight, this might seem like a good thing and one of the positive features of the US system, but further investigation reveals a problem. Since people are not required to provide any evidence to support their claims for donations of goods, there is - perhaps unsurprisingly - a significant problem with overvaluation. A 2005 study, for instance, found that the average value of deductions for donations in kind was over $1,400 per year, and a recent US Treasury report estimated that $3.8 billion was claimed in erroneous deductions every year. Given that HMRC are already extremely cautious in their approach to potential abuse of charitable tax reliefs, introducing a new type of relief that is known to be open to widespread abuse would seem foolhardy.
This doesn't mean that there is nothing we can learn from the US. Apart from anything else, the US is the most generous nation on earth by pretty much any measure you care to use, so they must be doing something right. Although there are many features of the way the Americans do things that are particular to their history, society and tax system, there are also elements of their philanthropic culture that we could bring across to the UK.
One such feature is the greater range of methods for charitable giving available in the US, where vehicles such as Charitable Remainder Trusts allow individuals to make legacy gifts during their lifetime rather than only on death and have opened up massive new markets for fundraising. Another is learning to be more open and positive about philanthropy. We might never be able to match the widespread American acceptance of big money donors getting their names emblazoned on hospitals and museums, but we can certainly do a lot more to ensure that those with money who choose to put it to use for the good of society are not viewed with suspicion and cynicism.
If we can strike a balance between learning from the US and keeping true to our own cultural values, then we can hopefully begin to develop a uniquely British philanthropic culture that matches, but does not fully mirror, the American one.