Charitable giving – a reputation dividend?

Charitable giving is increasing at all levels. Last year Coutts reported an explosion of high level giving since the financial crash. Only a fraction of these significant gifts come close to the frontpages. Even without making headlines, however, it is important to understand that philanthropy can be a valuable tool to improve a donor’s reputation. Beyond the generosity they express, gifts can make a powerful impact on the brand of both individual donors and the charities who receive them.

This summer, French football star Kylian Mbappe made headlines across the world not only due to his skill on the field but also when it was reported that he would be donating all of his earnings from the World Cup to charity. Many took to Twitter to praise his generosity, remarking that his altruistic gesture indicated a maturity beyond his years. His choice of charity also made a significant statement; giving to Premiers de Cordees (a French charity providing sports activities for disabled children) conveyed his concern for helping to give disadvantaged young people opportunities to experience sport. As an emerging young player, the stories played a key role in shaping Mbappe’s public persona, simultaneously raising the profile of the charity too.

The biggest story about charitable giving in the UK this summer has been Stormzy’s pledge to fund scholarships for two BAME students to attend Cambridge University. Neither Cambridge nor Stormzy have gained as significantly in terms of profile-raising – both have well established public personas. However, the terms of the donation – specifically that they stipulated the scholarships be awarded to BAME students – has sparked conversation about access to top tier UK universities for ethnic minority students. We can speculate that doing so was as much a motivator for making the gift as making a difference to the lives of two individuals students.

The relationship between philanthropy and reputation, however, cuts both ways. Charities must be aware that their reputation contributes to their donors’ image too. Negative coverage can have far-reaching consequences for charities when it makes their donors want to disassociate with them. Following the Haiti sex abuse scandal, Oxfam lost over 7,000 regular direct debits and brand ambassador Minnie Driver tweeted that she was leaving the charity “devastated”.

Over the past year there has also been a notable example of charities being adversely affected by their donors’ reputations. The revelation that much of the Sackler family’s fortune had come from profits derived from the sale of controversial opioid drugs in the US sparked criticism of the many arts and education institutions who have benefitted from the family’s philanthropy. Institutions including the Metropolitan Museum, the Tate and Oxford University were scrutinised over their due diligence processes and whether they would return these significant donations from the Sackler family.

In an economic climate of reduced public spending, philanthropy is vital. It is also clear that, done smartly, it is a real opportunity for high-net worth individuals and charities to enjoy a ‘reputation dividend’. Though over the last year we’ve seen the risk to both donors and charities when there is a breakdown in due diligence on either side, there have been some shining examples of individuals doing good for others, while making a smart move in terms of their own reputation.

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