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Plugging the Holes in Government Funding

Research by the Centre for Charitable Giving and Philanthropy (CGAP) finds innovation is required

Charities need to step up and innovate if they are to plug the gaps in Government funding in austerity Britain, according to research by the Centre for Charitable Giving and Philanthropy (CGAP) at Cass Business School, City University London.

Professor of Charity Funding, Catherina Pharoah, and research associate Meta Zimmeck from GCAP contributed the United Kingdom Country Report to the European Foundations for Research and Innovation (EUFORI) Study.
The study was funded by the European Commission (EC) to find out whether and how far philanthropic foundations are contributing to supporting research and innovation across Europe.

Prof Pharoah, co-director of CGAP, said: “As Governments across Europe - and elsewhere - seek to cut back on their own expenditure, they have increasing expectations and interest in how far philanthropy can meet gaps in public service delivery. This report shows that many charitable foundations in the UK are already contributing importantly to research and development at local, national and international levels, but there is scope for much more.

“The report also looks at whether philanthropic funding can take risks or be more innovative than Governments. The EC has an interest in the ways in which it can support philanthropic foundations, and encourage more philanthropy.”

The full study, comprised of 29 country reports, concludes that there are large differences in research and innovation expenditure between the countries in Europe. The United Kingdom comes top with £1.17 billion, followed by Germany, and the expenditure of foundations in the UK is about four times the amount spent by philanthropic and charitable foundations in Denmark and Sweden.

Overall, the Europe-wide report recommends that:

  • Foundations and governments should work to increase the visibility of charitable foundations, and look at the opportunities and benefits that would arise from the creation of “national forums of research foundations”;
  • Explore what can be achieved through collaboration to improve dialogue, information exchange, networking and cooperation between the foundations;
  • Create financially resilient foundations by diversifying sources of income and joining forces with others to share resources;
  • Improve the legal and fiscal system so that legal and fiscal conditions don’t hamper the establishment and functioning of foundations;
  • Integrate philanthropy as a part of the EU welfare state. EU policymakers, EU politicians and national politicians should be promoting a giving culture which will increase funding for foundations.
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