The British are said to be among the most generous people on earth. When it comes to ordinary people scraping together pennies to give to children’s hospitals or donkey sanctuaries, this is unquestionably true. Yet when it comes to wealthy individuals using large slices of their fortunes to make transformative donations to institutions such as universities and schools, we are a long way behind America.
Where are the Carnegies, the Rockefellers? We do have wealthy donors, but they are generally on a much smaller scale, and quite often feel inclined to make their donations anonymously, as if it were an embarrassment to be seen to be acting with generosity.
The donation of £100 million to Cambridge University by one of its Natural Sciences graduates, David Harding, will hopefully prove to be a watershed. The single biggest donation ever made by a British citizen to the university, it will be used to fund 100 PhD students at a time, drawn from around the world and with the emphasis on under-represented groups. More PhDs will lead to more innovation and business start-ups. It allows Cambridge to take a huge leap towards widening participation — something which it has tried hard to achieve but has struggled with.
David Harding is not a household name, though his profession is sufficient in itself to have earned him a little notoriety. He made his fortune from managing hedge funds, setting up the investment house Winton. He represents, in other words, one of the chief bogeymen of our age. Since the financial crash of a decade ago, the very words ‘hedge fund’ have been enough to provoke a curl of the lip in many people. Those who run hedge funds stand accused — not unreasonably in some cases — of profiting from economic misery, and running off with the proceeds to palm-fringed tax havens.
The idea that hedge funds create easy pickings for amoral speculators has never been accurate — many hedge funds have lost their investors a great deal of money. With large rewards always comes the risk of equally large losses.
Yet the absence of hedge fund billionaires from civic life has provided much fuel for those, such as Jeremy Corbyn, who claim that the wealthy are not fiscally pulling their weight. The narrative that financiers made fortunes and then left ordinary people to pay for the damage wrought by ‘casino capitalism’ has succeeded in gaining a lot of traction, and has led voters to contemplate electing a Labour party which promises punitive wealth taxes — something which would have been unthinkable a few years ago.
How different things might be were there more David Hardings prepared to put their wealth into worthwhile social causes. Harding is putting his money to work on something which Corbyn would surely approve of: investing in the widening of education, and through that in the economic future of Britain — yet without the money having to be first confiscated by the government.
Would it be better if the taxman had intervened and extracted the money from Harding involuntarily? Absolutely not. For one thing, Harding, who is believed to be worth £1 billion, will already be paying huge sums in tax, helping to fund general public expenditure. With his donation to Cambridge University comes the benefit of his financial judgment. He would not have grown so wealthy if he had not developed a keen nose for what makes good and bad investments.
Now he is putting his expertise to good use by focusing on what he has discerned to be an effective form of spending on education. To encourage wealthy individuals to spend their own money on social causes (rather than have the government tax them to the hilt and decide how to spend the money for them) is to draw upon the wisdom of a very financially astute group of people.
David Harding is not unique. In 2016 Coutts produced a report on charitable donations of more than £1 million which had been made in the preceding year. It counted 355 such gifts, totalling £1.83 billion. Four of them were for sums in excess of £30 million. A third of them went to universities. A quarter of them were made by individuals; a fifth by corporations; and the remainder by charitable foundations. Last year, according to the Sunday Times Rich List, the single biggest donation by individuals was £127 million, given by Jamie Cooper and Chris Hohn to the Children’s Investment Fund to spend on tackling malnutrition. Individuals made ten other donations exceeding £10 million, including £24 million from Sir Elton John to his Aids foundation.
Why do we not hear more of this type of giving, and why do we not champion it more loudly? Regrettably, in Britain a culture has developed in which it is seen as the government’s business to support social causes. Yes, we need taxes and government spending, but it is injurious to society when the government becomes the only source of spending for the public good. More diverse forms of funding for health, education and other services would surely help them become more resilient and protect them from capricious decisions made by the Chancellor, based as they are on political needs.
Thanks to David Harding, Cambridge University has been granted a little more independence from political decision-making. His example will hopefully inspire others who have had financially rewarding careers. The more the wealthy give and are seen to give, the less appealing the confiscatory policies of Jeremy Corbyn will seem.