This article was originally published on ConservativeHome on January 27, 2022.

By Helen Barnard, Director of Research and Policy at Pro Bono Economics

Next month we expect the publication of the long-promised Levelling Up White Paper (political drama allowing). Discussion tends to focus on the role of the public sector and how to attract private investment but this overlooks the crucial role that civil society must play if levelling up is to be a success. Many places in most need of transformation lack civil society organisations and miss out on the philanthropic giving which supports them. The white paper must include proposals to remedy this if it is to deliver on its ambition.  

Past attempts show civil society is central to successful regeneration  

Previous attempts at regeneration have shown that strong civil society involvement is crucial to success. Places with more civic assets and community participation saw the biggest and most sustained falls in deprivation under previous programmes. Failures often followed a lack of community involvement.  

Civil society organisations provide unmatched insights into community issues, helping design schemes that truly meet local needs. Participating in civil society builds social capital, neighbourliness and trust. Communities that gain control over resources and decisions invest in spaces and services that nurture community life and pride in place. Examples abound from the Big Local programme. On the Isle of Sheppey in Kent, a resident-led partnership has reinvigorated community life, with holiday play schemes, employment support, projects to tackle loneliness and improve mental health, as well as establishing a community hub as a shared place for advice and activities. 

Polling for the Law Family Commission on Civil Society found that people in levelling up areas prioritise living standards, good jobs and decent pay. Achieving these requires civil society organisations. They employ nearly a million people and disproportionately unlock opportunities for those furthest from the labour market. Charities provide many of the mental health, social care and social prescribing services which boost people’s health and wellbeing, support employment, bring down reoffending and reduce pressure on GPs and hospitals.  

But many deprived places lack a thriving charitable and philanthropic sector   

Deprived places have fewer charities and voluntary organisations than less disadvantaged areas. Research by NPC shows there are 28% fewer local charities per 1,000 people in Levelling Up Fund priority one areas compared to the lowest priority areas.  

Recent research by Pro Bono Economics uncovers funding patterns that help to explain this. Looking at self-assessment tax records, people in the wealthiest parts of the country make seven times as many donations to charity as those in the most deprived areas (excluding London). Other research by New Local shows charitable grant funding disadvantages ‘left-behind’ communities. A University of Southampton study found charities in the most deprived local authority areas lost a fifth of their income from local government in recent years, while those in the least deprived places saw little change.  

So how do we boost place-based philanthropy?  

Pro Bono Economics research highlights significant opportunities to increase charity funding through philanthropy.  A declining proportion of the public give to charity, high earners have become less generous and too few donations claim Gift Aid. Closing these giving gaps could raise nearly £3 billion for the country’s charities. This wouldn’t necessarily ensure greater funding flows to the places which most need it, but there are plenty of ways to achieve this.  

‘Diaspora philanthropy’ was suggested by Danny Kruger in his 2020 report for the government. Many wealthy people now live in London or the South East but grew up in or near places in need of funding. Encouraging them to direct their philanthropy towards their former home turf could help fill the gap. Examples include Jonathan Ruffer in the North East and Andrew Law (also the funder of the Law Family Commission on Civil Society) in Sheffield who has donated to the University of Sheffield to fund student support and medical research. There are risks in this approach, however, as Rob Williamson, Chief Executive of the Tyne & Wear and Northumberland Community Foundation, points out. Many places in most need of support don’t have connections with a wealthy donor, and the places donors feel most attached to won’t always be those that are most deprived. In addition, donors are more often motivated to give to specific causes rather than to a place. Community Foundations and giving circles, or cause networks, can play a crucial role in bridging between these interests.  

Giving circles or cause networks connect donors with others who are interested in a particular issue. Many have links to one or more of the 47 Community Foundations around the UK. The Foundations bring together multiple funders and donors with local charities and other partners, creating connections between the needs of a local area and the interests of donors and funders. Building on this, the Law Family Commission on Civil Society is exploring the idea of establishing local Philanthropy Champions, particularly in areas where civil society is weak. Metro Mayors could nominate a Philanthropy Champion to encourage giving by their peers, the business community, and wealthy individuals who grew up in their area. The champions could also spread best practice and work with Mayors, councils, MPs and expert local organisations to understand local need and connect it with interested donors.  

Wealth advisers could also play a much bigger role in raising awareness of and encouraging philanthropy and place-based giving. Currently, only one in five wealth advisors raise philanthropic giving with clients, and only half of higher and additional rate taxpayers are aware of Gift Aid. 

Match funding schemes have a good track record in supporting philanthropic giving, particularly through increasing the amount donated and directing it towards particular appeals or causes. Matched donations are an average of 2.5 times higher than unmatched donations. Over a third of respondents to the Big Give survey said they gave to a matched funded appeal because of the matching contribution. These schemes are most successful when they have broad objectives and a flexible approach, enabling local variation and tailoring to donors’ interests. Just as importantly, the Charities Aid Foundation highlights (from their experience delivering the Government’s Growing Place-based Giving Fund) the importance of developing local civil society infrastructure and capacity, not just handing out money. Long-term funding for core costs, particularly staff, is at the heart of this. Without this, money tends to flow into places which already have such infrastructure and capacity, rather than those which have most need of it. A new Levelling Up Match Funding Scheme could be designed to redress geographical imbalances by limiting it to certain areas or offering a higher level of match funding in levelling up priority areas than elsewhere. 

The political landscape is mired in uncertainty, but we can be sure that the pressing need will remain to increase opportunity, living standards and the quality of community life in places that have long been neglected. Achieving that ambition will require serious and sustained policy focus and the full participation of a thriving social sector.