The rise of the 1% club

According to 2023’s Sunday Times Giving List, the UK’s most generous philanthropist is Sir Chris Hohn.

The hedge fund manager set up the Children's Investment (TCI) Fund in 2003, structuring it so that 15% of the profits would go directly to Children's Investment Fund Foundation (CIFF).

In an interview with The Sunday Times, Hohn urged more wealthy individuals to give a significant proportion of their income to good causes.

He said: “If they could understand, even on a simple level, the joy they could have by sharing their wealth, I think they might all be happier people. Even for those who are into philanthropy, they’re only giving away a half percent of their wealth. They’re not really doing more than tokenism.”

He suggests that corporates and wealthy individuals can give effectively to charities by committing to donate a minimum of 1% of their wealth to good causes.

Gaining traction

The 1% concept is gaining traction. A growing number of campaigns are encouraging wealthy entrepreneurs, philanthropists, and corporates to share their wealth.

For example:

Pledge 1%

In 2014, Pledge 1% founding partners, Salesforce, Atlassian, and Rally, came together with the Entrepreneurs Foundation of Colorado to accelerate a shared vision of every business around the globe integrating philanthropy into its corporate DNA.

They came up with Pledge 1%: a global movement that aims to inspire, educate, and empower businesses and entrepreneurs to be a force for good.

They help companies of every size and stage leverage their unique assets and pledge 1% of equity, product, profit, and/or employee time to a charity of their choice. 

To date, over 18,000 businesses in 100 countries have used Pledge 1%’s flexible framework to ignite half a billion dollars in new philanthropy.

1% for the Planet

The brainchild of Yvon Chouinard, founder of Patagonia, and Craig Mathews, founder of Blue Ribbon Flies, the ethos behind 1% for the Planet is simple: companies profit from the resources they take from the earth, so they should protect those resources.

The duo pledged to donate 1% of their annual sales to environmental organisations and invited others to do the same.

The idea resonated with Brushfire Records, Klean Kanteen, and the movement was born.

To date, 1% for the Planet has certified over $500 million in donations to environmental causes.

Are UK businesses getting in on the act?

To date, much of the 1% activity has taken place overseas. But change is afoot in the UK.

In 2022, the Directory of Social Change (DSC) conducted a survey to find out how much money UK businesses are injecting into the charity sector.  

Of the 223 companies they received data for, 70 either gave or pledged at least 1% of their pre-tax profits to charitable causes in the UK. 

How much does this equate to? According to the DSC, it amounts to £230 million in cash and in-kind donations.

Case studies

Businesses are donating in various ways. Let’s look at a few examples.

Alpkit Ltd

Formed in 2004, Alpkit is an outdoor equipment manufacturer and retailer.

The brand donates 1% of sales and at least 10% of its annual profits to support grassroots projects through its foundation.

The Alpkit Foundation makes grants of £50 to £500 for outdoor projects focussed on diversity and inclusion, health, education, the environment and increasing participation in outdoor activities.

Since launching in 2015, the foundation has donated over £500,000 to 1,800 projects.

Nationwide Building Society

Nationwide is committed to tackling the housing crisis and educating young people in numeracy and developing money skills.

Each year, the building society donates 1% of its pre-tax profits to causes that work in those areas.

Through its Community Grants programme, it awards grants of up to £60,000 to charities, community land trusts and housing co-operatives that are looking to make positive changes in their local areas.

In 2021/22, a combined £4 million was awarded to 94 housing projects across the UK.

Central England Co-operative

Central England Co-operative, or the Co-op, as its more commonly known, reinvests 1% of its trading profit in local communities each year.

Via its Community Dividend Fund, the retailer makes charitable donations of between £100 and £5,000 to local schools, parks, small businesses, and charity groups in the areas it operates.

As of September 2023, the brand has donated more than £173,000 to community projects across its trading area.

DSC plea

The DSC is urging more UK based companies to join the 1% club.

Debra Allcock Tyler, CEO of DSC says of the initiative, “when we’re talking about companies who make huge pre-tax profits each year, 1% can have a large cumulative effect.

The 1% Club is a great example of corporate organisations supporting charities and helping those who are facing the most challenging of times.”

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