In 2020, PBE created the Law Family Commission on Civil Society. Steered by leaders from business, academia, public life and civil society, the Commission was an ambitious programme of groundbreaking research into how the potential of civil society can be unleashed, including how increased and more effective philanthropy can be unlocked.

More than 800 individuals and organisations provided input into the Commission’s work, which informs this submission. In addition, PBE undertook over a dozen interviews with experts in philanthropy, philanthropy advice and within financial services to inform this submission. The quotes throughout this submission are from these interviewees.

This submission sets out PBE’s view that:

• A strategy for improving and increasing sustainable finance which misses out philanthropy misses out the most impact-focused form of capital, and therefore a critical opportunity to deliver change.
• Consumers are being let down by a failure in the UK financial sector to offer comprehensive philanthropy services, but the FCA’s sustainable finance agenda could be a powerful means by which to start solving this.

On leadership and culture:

• The attitude of leadership makes the difference between provision of any philanthropy services and no philanthropy services at regulated firms, and as such the FCA should incorporate philanthropy into the guidance provided to firms about embedding sustainability considerations into their business objectives and strategies. Leadership teams should also be encouraged to include their approaches to client philanthropy in their business objectives and strategies. 
• The FCA should provide guidance on how a firm’s culture and behaviours can support positive sustainable change. This guidance should refer explicitly to how a firm’s culture and behaviours towards philanthropy can make a substantial difference to both the quality of philanthropy service provision, and to society itself – and include advice on how firms can use philanthropy services in the most impactful way. 

On incentives:

• Financial advisors in most firms are currently disincentivised from providing philanthropy services, and this is leading to a failure in the provision of information and services to consumers. There is therefore a strong case for linking pay to sustainability-related objectives, and for those objectives to be broken down into different factors - including philanthropy.
• The explicit inclusion of philanthropy in advisors’ sustainability objectives is important to ensure that the more ‘impact aligned’ forms of capital such as philanthropy are addressed, and do not get lost in what is more familiar.
• As a minimum, the KPIs that advisors’ renumeration levels are assessed against should include the proportion of clients that they have had a conversation about philanthropy with.

On education and training:

• There is a serious and substantial lack of knowledge in the financial sector as to how philanthropy can support consumers’ and firms’ sustainability objectives. This results in harm to consumers who are not offered information, services and products relevant to their decision making. It also has the potential to reduce the amount of public good that philanthropy can achieve. Information about philanthropy should therefore be included alongside other sustainability-related options for capital investment in the training and CPD that relevant advisors, asset managers and relationship managers receive.
• Improving training and education about philanthropy is also important to ensure that changes to incentives, objectives and strategies don’t become tick box exercise.
• Information about philanthropy should be included alongside other sustainability-related options for capital investment in the compulsory training and CPD that relevant advisors, asset managers and relationship managers receive – so that all relevant individuals in the sector receive this training over the next 5 years.

·    There is no need for specific qualifications to be developed on philanthropy – merely an alteration or extension of the curricula to incorporate relatively basic information on philanthropy, its benefits for both firms and clients, the various means by which philanthropy services can be provided, and how to open up a conversation with a client about charitable giving, as part of a discussion about values-based investing, sustainable finance options, or the objectives they have with their wealth.

Read the full submission