HOW ENTREPRENEURS VIEW PHILANTHROPY IN IRELAND · HOW ENTREPRENEURS VIEW PHILANTHROPY IN IRELAND...

A COMMUNITY FOUNDATION FOR IRELAND REPORT

HOW ENTREPRENEURS VIEW PHILANTHROPY IN IRELAND

SUPPORTED BY

Giving and Gaining – How entrepreneurs view philanthropy in Ireland 1

INTRODUCTIONby the Chairperson and Chief Executive of The Community Foundation for Ireland (CFI)

Notwithstanding a number of recent reports, relatively little is known about philanthropy in Ireland - in terms of more strategic, structured and purposeful charitable giving. In particular, little is knownabout philanthropic donors or those with the propensity to give. This report on ‘Giving and Gaining -How entrepreneurs view philanthropy in Ireland’ provides insights into one such group.

The report is being published against a backdrop of economic recovery following a severe recessionaryperiod in Ireland. With a clear correlation between income, wealth and philanthropy, such trends suggest that philanthropic giving should increase.

Through its work with the non-profit sector and community groups throughout Ireland, CFI is awarethat the recessionary period has had a high toll for the community and voluntary sector. In an environment of limited public resources, community and voluntary groups remain under severe pressureto provide much needed services. An additional challenge is the imminent closure of The AtlanticPhilanthropies, as well as the exiting of The Joseph Rowntree Charitable Trust from funding in Ireland.Although never a substitute for state funding and investment in core services, The CommunityFoundation for Ireland believes that increased philanthropic giving – in particular in planned and committed ways – could make a significant difference across many areas of society including health,education, the arts and community development.

ODec e y ounda o

INTRODUCTION

2 Giving and Gaining – How entrepreneurs view philanthropy in Ireland

Message from Head of AIB Private Banking

Positively, despite relatively low engagement in structured and strategic giving to date,the report finds that there is an appetite for engaging more in philanthropy amongstmany entrepreneurs. There is also a clear interest in seeing certain trends and supportswhich have encouraged entrepreneurs to engage in philanthropy globally, replicated inIreland.

As part of a global network of over 1800 community foundations world-wide, CFI hasthe opportunity to collaborate with other community foundations and to learn fromtheir extensive experience developed over the past 100 years.1 Having worked directlywith the Silicon Valley Community Foundation (SVCF), we were aware that it is now thelargest in the United States based on its success in engaging with entrepreneurs inSilicon Valley. Indeed the largest philanthropic gift in the United States in 2013 was adonation by Mark Zuckerberg and his wife Priscilla Chan of $1bn to the Silicon Valley Community Foundation. Through this research initiative, we were interested to learn more about how entrepreneurs are engaging in philanthropy and how they are facilitated to do so, as well as building an understanding of the interrelationship between entrepreneurs and philanthropy in an Irish context; about which little is known.

We were fortunate that AIB Private Banking is interested in the area of study and supported the project. Through their generous support, CFI commissioned Sia Partnersto undertake the research phase of the project. We thank Jane Williams for her excellent and thorough work in this regard and all who gave generously of their time tocomplete the survey and/or to be interviewed.

If you would like general advice around how to engage in philanthropy or are interestedin setting up a charitable fund at CFI, please feel free to contact us at any stage.

AIB Private Banking is delighted to be supporting this report and hope it gives a uniqueinsight into the link between entrepreneurship and philanthropy. We have all witnessedthe effect the past number of years has had on the community and the voluntary sectorbut I am confident that the recent seeds of recovery present new opportunities for giving and donating to worthwhile initiatives. I wish to acknowledge the superb workThe Community Foundation for Ireland do in empowering people who want to make adifference through a model of philanthropy that is based on trust, effectiveness andimpact and wish them well with all their future endeavours.

Louis FitzGerald,Chairperson

Tina Roche,Chief Executive

Patrick Farrell,Head of AIB Private Banking

1 The first community foundation was established in Cleveland, Ohio in 1914

3

Executive summary 4

Philanthropy at a glance 365.1 Getting started 375.2 Giving options 375.3 Donor Advised Funds – How does it work? 375.4 Tax relief on donations to charity 385.5 Complex gifts, including shares 385.6 The Community Foundation for Ireland 395.7 Resources 40

Setting the scene 62.1 Introduction 62.2 Philanthropy in Ireland 92.3 Entrepreneurship in Ireland 102.4 Entrepreneurship and philanthropy 102.4.1 The relationship between

philanthropy and entrepreneurship 102.4.2 Vibrancy of place 102.4.3 Facilitating entrepreneurs’ transition

to philanthropy: the case of the SiliconValley Community Foundation 12

How entrepreneurs view philanthropy in Ireland 143.1 Introduction 153.2 Objectives of the Report 153.3 Method 163.4 Findings 163.4.1 Profile of respondents 163.4.2 Engagement with philanthropy 173.4.3 Ways of engaging in philanthropy 203.4.4 What philanthropy means to

entrepreneurs in Ireland 203.4.5 The environment to support

philanthropy in Ireland 233.4.6 International trends 253.4.7 Communicating with

entrepreneurs effectively 26

Improving the support environment and encouragingentrepreneurs to engage in philanthropy 274.1 Developing supports for donors 284.2 The non-profit sector 304.3 Public policy 324.4 Conclusion 35

01 0203

04

05


The Community Foundation for Ireland (CFI) is aware of the particularimpact that successful entrepreneurs are having on the world of philanthropy and in this report was interested to explore philanthropicgiving by Irish entrepreneurs in the light of significant entrepreneurialsuccess in Ireland in the last 15 years.

01

Through the support of AIB Private Banking, CFI commissioned Sia Partners to undertake a study ofentrepreneurs – with over fifty entrepreneurs completing an online survey and 15 subsequentinterviews with entrepreneurs and key informants.

Engagement in charitable giving and perceptions of philanthropyThe report provided interesting insights into entrepreneurs’ current engagement in philanthropyand motivations to give (or indeed not to give). Although 96% of respondents indicate that they give in some way (through financial donations or by giving time and expertise), one in eight entrepreneurs do not give financially. Although two thirds of respondents understand ‘philanthropy’ to be a strategic, more engaged and purposeful approach to charitable giving, only a third perceives that they give in such a way. The term philanthropy also generates some unease in an Irish context with some respondents expressing their discomfort with the term‘philanthropy’ as appearing elitist and not aligning well with Irish culture.

5

Communicating with entrepreneursThe report makes a number of recommendationsarising from direct suggestions by respondents inthe areas of donor services, the non-profit sectorand public policy. These include developing an activeengagement and leadership in relation tophilanthropy on the part of business networks, aswell as the provision of a suite of supports and services to support charitable giving on the part ofprofessional advisers and intermediary philanthropic organisations, such as CFI. The reporthighlights that the non-profit sector needs toaddress concerns in relation to governance and efficacy, as well as developing their capacity topartner with entrepreneurial donors. In terms ofpublic policy, the report highlights the need for asupportive regulatory and fiscal environment, aswell as the opportunity to harness the “can do” andinnovative capacity of entrepreneurs in addressingsocial challenges. Finally it suggests that there is aneed to create an Irish meaning of ‘philanthropy’which aligns with Irish culture and values.

This report identifies a latent potential for entrepreneurs to engage more – both in terms oftheir financial contributions but also in bringing amind set and skill set that has much to offer asIreland starts the process of rebuilding both itssocial capital and infrastructure.

Environment for philanthropyThe survey respondents do not see philanthropy as atopic that comes up regularly amongst their peersalthough in common with international research,entrepreneurs in Ireland are strongly motivated by‘putting something back’. The report also providesinteresting insights into how entrepreneurs viewthe environment for philanthropy with almost all ofthe interviewees identifying ways in which the environment could be made more supportive inIreland. Factors such as changes in tax legislation,attitudes to successful people and the lack of efficient and accountable interlocutors were identified as examples of the shortcomings and thereport also brings forward suggestions for improvement.

Looking internationally confirms that a supportiveenvironment for philanthropy encouragesengagement by entrepreneurs. Such an environmentincludes supportive fiscal and regulatory arrangements, as well as the capacity of non-profitorganisations to engage effectively withentrepreneurs. Different models of engagement,channels of giving and the facilitation of complexgifts have also underpinned greater engagement byentrepreneurs globally.

Communicating with entrepreneursThe report found that entrepreneurs perceived theusual approaches to promoting charitable giving inIreland to often be unsophisticated, unsubtle andnot strategic. Entrepreneurs had a strong preferenceto be communicated with on philanthropy via contact through peer and business networks, as wellas through philanthropic intermediaries such as CFI.

96%of respondents indicate that they givein some way


Where philanthropy may once have been perceived to be the preserveof those with inherited wealth and inter-generational family trusts, inrecent decades the philanthropic pendulum has increasingly swungtowards entrepreneurial wealth.

02

2.1 IntroductionHow people made their money has shifted dramatically. Just twenty five years ago,four fifths of the wealthiest individuals in the UK had inherited their wealth and onefifth was self-made. The past few decades have seen a complete reversal of this ratio.2It has been noted that a key defining feature of Irish wealth is that it is firstgenerational by nature and more entrepreneurial than in many other developed countries.3 Wealth that is self-made rather than inherited tends to have a positiveeffect on philanthropy. Entrepreneurs and the companies they lead are more inclinedto give to charity.4

7

The philanthropic pendulum hasincreasingly swung towardsentrepreneurialwealth.

Globally, the last two decades have been a time ofsignificant wealth creation with a surge in the numbers of high net worth individuals, as well as anincreased polarisation in wealth between rich andpoor. Linked to such wealth creation, is a significantglobal, inter-generational transfer of wealth. From2007 until 2061, ‘baby boomers’ and the SecondWorld War generation will pass on their estates totheir heirs and charity. In the US alone, this wealthtransfer is estimated to be worth $59 trillion, with$6.3 trillion being bequeathed to charity and anadditional $20.6 trillion through life time giving.5

Notions of ‘armchair philanthropists’ – engaging inphilanthropy in later stages of life and in a somewhat detached manner have increasingly beenreplaced by the ‘philanthropreneurs’. Havingachieved business and financial success relativelyearly in their lives, such entrepreneurial philanthropists begin to pursue philanthropic andsocial entrepreneurship interests at a relativelyyoung age, often demonstrating the passion andenergy which drove their original business success.

In the US alone, this wealth transfer isestimated to be worth

$59 trillion

2 www.wealth.barclays.com/en_gb/home/research/research-centre/wealth-insights/volume-17/a-changing-wealth-landscape.html

3 Bank of Ireland Wealth of the Nation Report, 20074 www.fidelitycharitable.org/docs/Entrepreneurs-and-Giving-Executive-

Summary.pdf5 “A golden age of philanthropy still beckons”, Schervish and Havens,

Center on Wealth and Philanthropy, 2014


The best known example is the Bill &Melinda Gates Foundation (which is designedto spend down its capital within 50 years ofthe death of its last founder). The two largestphilanthropic funders in the past decade inIreland, The Atlantic Philanthropies and TheONE Foundation – are also spend down foundations.6

A growing trend amongst parents is to wishto involve their children in their philanthropy.Through engaging their children in philanthropy many parents wish to avoid‘affluenza’ – the dissatisfaction that is said to come from the pursuit of a material life andthe negative effects of burdening children with excessive wealth. SuccinctlyWarren Buffet when he said:

captured

lea“people should

ve their children enough money sothey would feel they could do

that

not so much that they could do nothing.”anything but

02

The ways in which people give are changingwith a wide range of giving options andapproaches to philanthropy, including donating on line and mobile donations.There is also a wider range of philanthropicapproaches from more conventionalgrant making approaches and communityphilanthropy, through to venture philanthropy and social investment. There isalso a trend towards collaborative giving,with donors often funding as part of a widercircle or network of donors.

In tandem with such trends has been anemerging infrastructure around giving withthose new to philanthropy increasingly drawing on specialist advice and guidanceand the emergence of philanthropic intermediaries, such as community foundations which support donors in theirgiving and provide alternative channels ofgiving.

People should leave their childrenenough money so that they would feelthey could do anything but not somuch that they could do nothing.” ‘‘

9

2.2 Philanthropy in IrelandThe proportion of the population giving tocharity is consistently very high in Ireland.Despite high levels of participation, the levels ofgiving in Ireland (with only 0.8% of incomedonated to charity) tend to be low. However, inmany countries with a similar governmentphilosophy to Ireland, people are donating morethan 1% of their disposable income.7 In the UK1.2% of income is donated. Although recognisingthat the United States has particularly high rates,in the US, 2% is donated.

It is not only what people give that is of relevancebut also how they give. Giving in Ireland has beencharacterised by spontaneous giving channelssuch as responding to emergency appeals andstreet collections and fundraising events. Plannedgiving includes direct debits and standing orders.In Ireland, only 15% of people give in a plannedway, compared to 36% in the UK.8 Ireland also hasthe smallest number of charitable foundations inEurope and donor advised funds are only emerging as a way to give.

An additional challenge is that the terms ‘philanthropy’ and ‘philanthropist’ tend to conjureup mixed perceptions in Ireland. Attitudinalresearch commissioned by Philanthropy Ireland9

revealed that 52% of people in Ireland have neverheard of the term ‘philanthropy’ and just a quarter know what the term means. When askedhow much someone would have to donate to be

a ‘philanthropist’, the survey found that the average amount was 130,000. Although the Irishsee themselves as a nation of givers, “the positiveembrace of philanthropy only extends to thesmaller donations made by the majority of thepopulation. By contrast, the general public and themedia tend to be distrustful of the large scale philanthropic activities of Ireland’s wealthy.”10

If Ireland mirrors trends in demographics and philanthropy elsewhere, notably in the UK and theUS, we are likely to see a sea change in charitablegiving resulting in sustained, higher levels of giving by a greater number of individuals and families in the coming years.

6 ONE Foundation ceased funding in 2013 and The Atlantic Philanthropies will finish its grant making by 2016

7 Forum on Philanthropy and Fundraising Report, 2012, p. 98 Forum on Philanthropy and Fundraising Report, 2012, p. 99 Research into Awareness and Understanding of Philanthropy in

Ireland, Behaviours and Attitudes, 201110 Philanthropy in the Republic of Ireland, McKinsey & Co, 2010, p. 4

Percentage of Disposable Incomedonated to charity

0.8% 1.2% 2%


2.3 Entrepreneurship in IrelandThe strong growth of the late ‘90s and early2000s, together with international trends in innovation in telecommunications, bio-sciencesand ICT produced a strong, opportunity led,growth in entrepreneurial ventures in Ireland.

During the recent recession, there was a dramaticfall in the level of entrepreneurship. However, theGEM 201311 study has identified a recovery in therate of entrepreneurial start up in Ireland.Government policy is to support new entrepreneurial ventures and make Ireland the‘best small country in the world to start and growa business.’ The rate of entrepreneurship has alsoincreased (9.2% in 2013 from 6.1% in 2012) andIreland’s ranking against other countries hasgreatly improved. Ireland is now ranked 11thamong the OECD countries, 9th of the EU-28countries and 2nd of the EU-15 countries.

The last two decades have produced significantnumbers of successful entrepreneurs in Irelandand, despite the impact of recession, the indications are that the trend is upwards againwith 32,000 individuals starting new business in2013.

2.4 Entrepreneurship and philanthropy2.4.1 The relationship between philanthropy andentrepreneurship To date there has been little research on the inter-section of entrepreneurship and philanthropyalthough many prominent entrepreneurs have

02also been philanthropists, including Carnegie,Rockefeller and more recently, Gates andZuckerberg.12

However, we do know that that many of the characteristics specific to the individual play alarge role in their level of engagement in entrepreneurship and philanthropy. Entrepreneursrecognise opportunity and organise resources tostart new organisations, develop organisationsand enable change. They may also use their localnetworks to shift norms that lead to institutionalchange when they transition to policy entrepreneurs – advocates who invest resourcesto bring about policy change. It has also beennoted that entrepreneurs tend to be distinguishable by their high levels of social acuity and their ability to define problems, buildteams and lead by example.13

2.4.2 Vibrancy of placeIn looking at how entrepreneurs engage in philanthropy, a common theme is that they frequently choose to support the local communitywhere they were raised or where they startedtheir business. Indeed the story of successfulplaces is often predicated on an individual whowas “instrumental in creating institutions andmaking connections that were transformative fora local economy” or who act as “regional champions.” Such highly connected individualswho live and work in a region and who, “throughtheir actions, make a difference in the economicvibrancy and prosperity of a place.” Recent

11

Passing on the baton - The ONE FoundationFounded in January 2004, the ONE Foundation was aprivate Irish philanthropic foundation which investedall its resources by the time it closed, in December2013. Over ten years, ONE Foundation spent more than

85 million targeting solutions in relation to its goalsin the fields of Disadvantaged Children and Families,Youth Mental Health, Integration, and SocialEntrepreneurship in both Ireland and Vietnam. TheONE Foundation was set up with a determination tofocus on solving issues, rather than just alleviatingthem.

In reviewing the ten years of the ONE Foundation, itsco-founder Declan Ryan has talked about what wasachieved through engaging in a structured and strategic philanthropic approach: “Most exciting andmost important for me, however, has been to witnessthe social impact achieved by ONE, which has been

research identifies how an entrepreneur’s affinityand connection to a region can result in tangibleeconomic and social benefits - “the role ofentrepreneurs who have made a difference intheir local communities through business practices, complementary investments in theregion and ultimately through philanthropy”.15

Many donors choose to target their philanthropicsupport to a selected town or indeed county and

greater than I ever could have imagined. Of course, wemade more than a few mistakes along the way. Yet whathas been achieved for young people here in Ireland andin Vietnam was and, I hope, will continue to be,significant. While I don’t want to list the home runs herein detail, one of the things which heartens me most isthe impact we made in the area of Youth Mental Health.The thought that a kid from rural Ireland can now go toa Jigsaw centre and find the help there to avoid a lot ofpain – and perhaps even death – is in my book a prettyamazing one. Thankfully now, at last, Youth MentalHealth is now on everyone’s agenda.”

The ONE Foundation was based on the philosophy of‘giving while living’, as coined by the Irish-American philanthropist Chuck Feeney. “In keeping with this out-look, and putting his own spin on it, Declan Ryan seesphilanthropy as a relay race, in which each generationmust step up and play its part, taking the baton at theappropriate time. After ten years he would pass on thebaton to other players, who could in turn drive forwardthe progress already made by ONE and others.”14

community foundations provide an ideal mechanism to channel such support and tofacilitate grassroots grant making.

11 Global Entrepreneurship Monitor, 201312 Handbook of Research on Entrepreneurs’ Engagement in

Philanthropy, Introduction, p.113 Mintrom and Norman, 200914 www.onefoundation.ie15 Handbook of Research on Entrepreneurs’ Engagement in

Philanthropy, 2014 (Feldman and Zoller, 2012)


022.4.3 Facilitating entrepreneurs’ transitions to philanthropy: the case of the Silicon ValleyCommunity Foundation16

Silicon Valley Community Foundation (SVCF) is thelargest community foundation in the United Stateswith $4.7 billion in assets and working with morethan 2,600 individual and family donors, many ofwhom are entrepreneurs who became involved inphilanthropy with its assistance. The typical entrepreneur who works with SVCF initiated their relationship at the recommendation of their tax,investment or legal adviser, although personalreferrals through other entrepreneurs are alsocommon.

Through its extensive work and experience, SVCFhas identified four characteristics of entrepreneurdonors, namely:

1. They are curious – with a “gift for inquisitiveness that expresses itself through boundless questions and new ideas”;

2. They invest in learning about how and why things work the way they do (including an appreciation of failure);

3. They have a capacity to make connections among seemingly unrelated areas;

4. They are “uniquely optimistic” coming to philanthropy with a strong belief that complex problems can be solved with the right resources,correctly applied.

SVCF identifies that the first step for engaging witha prospective donor is to understand their needsand goals. The selection of the appropriate vehicle

How one family give back totheir community: TheCallery Family FundJim Callery is a successful entrepreneur and is also well-known for his involvement in the restoration ofStrokestown Park House and the Irish National FamineMuseum in his home county of Roscommon. In 2004Jim and his family set up a philanthropic fund at TheCommunity Foundation for Ireland (CFI) as Jimdescribes:

“People who have made some money or a lot of moneythemselves generally had very little time during theirworking lives to consider the needs of others. It is onlyas you get older in life that you begin to realise thesethings. I think, when you and your family are providedfor, there is a duty to be helpful to others in a financialway. So when I came across CFI, I thought that this wasan ideal and very tax efficient way to channel funds tolocal efforts among one’s own community.”

The Callery Family Fund has, and continues to successfully fund projects in Roscommon that supporteducation, the arts and community development.

13

The Tony Ryan Fund forTipperary The Tony Ryan Trust was established in December2009 by the estate of the late Tony Ryan. The Trusthas provided 1.9m in funding over a five year periodto organisations that seek to improve the life experience of children and young people living inCounty Tipperary. To do this effectively, The Tony RyanFund for Tipperary donor advised fund was launchedin May 2013 and is being managed by The CommunityFoundation for Ireland (CFI). The Fund awarded grantsto initiatives that support children and young peopleto reach their potential with a focus on communityevidence based programmes. In this instance, CFI hadthe infrastructure in place to effectively deliver aninitiative at a county level on behalf of Tony RyanTrust. CFI takes responsibility for all administration,grant making and governance in relation to the Fundand the work aligns closely with other strategic initiatives that are being undertaken by CFI inrelation to early education. The Fund has awarded itssecond year of grants from the programme and nowexpects to have significantly improved many aspectsof the lives of children and young people in Tipperary.An evaluation is being undertaken to assess theimpact of bringing evidence based programmes into aspecific geographical region in a relatively shorttimeframe.

16 Draws on Handbook of Research on Entrepreneurs’ Engagement in Philanthropy, (Taylor, Strom and Renz, 2014), Part II, section 8 “Facilitating Entrepreneurs Transitions to Philanthropy; the case of the Silicon Valley Community Foundation”, Carson and Stilwell

by which to support the donor’s philanthropy isguided by factors including the level of control thedonor wishes to maintain, the time horizon of theirgiving, the level of involvement they intend to haveand their preferred investment. In the experience ofSVCF, entrepreneurs typically want to move quicklyand SVCF “must be ready to act promptly andresponsively to their ideas and interests in order tohelp them move to active philanthropy”.

SVCF has worked hard to develop an understandingand responsiveness to Bay Area entrepreneurs.Such responsiveness has included accepting complex gifts such as shares (including 36 millionFacebook shares it received from co-founder MarkZuckerberg and his wife, Priscilla Chan), bitcoinsand ripples (both forms of virtual currency). ForSVCF, this often means being open to working withprospective donors in new ways. SVCF has figuredout how to process other complex gifts thatentrepreneurs are likely to want to donate,including pre-IPO shares from start-up companies,large blocks of publicly traded stock, and property.

Tailoring giving plans to each donor’s preferences –based around a donor’s own style of giving – is a critical success factor for SVCF in working withentrepreneurs. This includes pairing donors whoare entrepreneurs with non-profits that welcomeinteraction and assistance and determining howthese “highly curious donors can contribute beyond making cash donations. Many donors end up volunteering their time, technology skills, or strategy suggestions.”


The Community Foundation for Ireland, through itsinternational connections, is aware of the particularimpact that successful entrepreneurs are having onthe world of philanthropy.

03

15

Some entrepreneurs believe that the culture in Ireland would not support the US concept of prominent and public giving.

3.1 IntroductionIreland has experienced significant entrepre-neurial success in the last 15 years. In 2014, TheCommunity Foundation for Ireland (CFI) commissioned a report to explore philanthropic giving by Irish entrepreneurs. SiaPartners successfully tendered to undertakethis report on behalf of CFI.

3.2 Objectives of the reportThe key objectives of the report were asfollows:

01To develop an understanding

of how Irish entrepreneursview philanthropy and theinter-relationship between

entrepreneurship andphilanthropy in

Ireland02To gain insights into the

appetite, routes to, barriers for,and changes that would

support, philanthropyby Irish

entrepreneurs 03To identify views and

perspectives that will assist TheCommunity Foundation for Ireland

and others with an interest ingrowing philanthropy

in Ireland


3.3 MethodResearch was undertaken by Sia Partners in2014 comprising an on line survey coupledwith interviews. The survey was completed byover 50 entrepreneurs, representing a highcompletion rate in the selected sample. Inorder to obtain a deeper understanding ofthemes emerging from the survey, Sia Partnersundertook in-depth, personal interviews withten entrepreneurs and five key informants toexplore qualitatively the survey findings andto obtain further insights into the views ofentrepreneurs on philanthropy in Ireland. Thecompletion of the 50+ surveys and 15 interviews makes this a significant report, bythe standards of research amongst eliteswhere the respondents could be regarded as‘experts’ in the topic or having unique insightand understanding.

The survey was issued to a selected sample toinclude entrepreneurs from the ICT, LifeSciences, Agribusiness, Media, Retail andManufacturing. The selection criteria includedentrepreneurs who started the business themselves and who had achieved significantsuccess with the business in terms of realisable financial value. The sample alsoattempted to include the sectors in Ireland,which are prominent in terms of the level ofknown entrepreneurial success such as ICT.The recruitment method for respondents wasthrough CFI’s contact base, supplemented bySia Partners’ network of entrepreneurs and

03experts in entrepreneurship. From this base, asnowballing method was applied to access a widercircle of respondents who fitted the selection criteria.

The analysis of the outcomes of the survey andthe interviews shows consistency in key findingsacross the two methods, survey and interview.

3.4 Findings3.4.1 Profile of respondentsThe profile of respondents to the survey was asfollows:

The low participation rate of females in the survey is consistentwith statistics on the number of female-led successful entrepreneurial businesses. To provide insight into the projected increasingly female successful entrepreneurs of the future, SiaPartners targeted additional female entrepreneursand key informants, for the interviews with 47% ofthe interviewees being female.

Gender

Male88%

Female12%

17

3.4.2 Engagement with philanthropy

a. Current giving

All but two (96%) of the respondents to the report provided information indicating someform of charitable giving. When asked for reasonsfor not giving currently, six answered the question, indicating that 12.25% of respondentsdo not give financially.n ICT n Pharma/Life Sciences n Manufacturing

n Media/Entertainment n Retail

n Nascent Entrepreneur n Start up Entrepreneurn Established and Developing Entrepreneurn High Growth Entrepreneur n Serial Entrepreneurn Retired

Age Entrepreneurial

Stage

Sector

30-44

45-59

22.4%

60-74

24.5% 4.1%

75+

49.0%

47%

16%

4%

43%

9%

23%

6%15%

13%

3% 22%


In terms of current philanthropic engagement, the following picture emergesfrom the responses:

Although none of the respondents initiallyresponded to say that they are giving bydonating other assets such as property orshares, when subsequently asked how theygive 2% selected by ‘giving shares’. About athird perceive that they give in a planned andstrategic way and about a third see them-selves as giving in a somewhat ad hoc way.

03b. Motivation to engage in philanthropy

The motivations for giving mirror the UKresearch17 into philanthropy in general with thefollowing key reasons chosen:

Donatingmoney

Giving time and expertise

Giving in a strategic way

Mix of these

None of the above

Giving in an ad hoc way

Having done well and wanting to give back 67%

Being asked by friends and peers

Tackling injustice and contributing to solutions

Wanting to help local communities in Ireland

A particular cause they feel passionate about

Enjoyment of giving and getting involved

Tradition of giving in their family

Personal experience (self or a loved one)

Desire to help communities overseas

Tax breaks for charitable giving

56%

44%

44%

40%

29%

18%

11%

11%

11%

63% 46%

38% 33%

25%

4%

19

Interview respondents provided additional insights.A number disclosed that philanthropy is their wayof engaging their children in understanding thatothers are not as fortunate and that they have aresponsibility for helping to support people lessfortunate than themselves; for some CFI has beenimportant in facilitating that effort for them.

Others cite the recent recession in Ireland as a keymotivator (“It has been an appalling six years”). Asense of helping out in hard times was animportant motivator for many interviewees. Anumber cite the pleasure and enjoyment they getfrom giving. They also believe that many philanthropists are unaware of this as a motivationfor their giving and see their giving as one-waytraffic with the philanthropist giving and thebeneficiary receiving. (“Giving is fun and I get realpleasure from doing this”).

The belief in their own capacity to make a difference was considered by entrepreneurs to be aparticularly strong trait in their make-up thatcarries from their businesses into their philanthropic giving. Like their capacity to look atan area and spot the business opportunity, theyfeel that they are particularly well equipped to spotthe social issue and develop an innovative solution

to meet that problem, successfully. Their capacityto network and to bring the resources together isan additional capacity which they believe could bevery effective if harnessed well.

c. Reasons for not engaging in philanthropy:

Six respondents (12.25%) indicated that they don’tcurrently give citing the following reasons:

Giving is fun and I get real pleasurefrom doing this.”‘‘

17 Richer Lives: why rich people give, Beth Breeze, Theresa Lloyd, 2013,Pears Foundation University of Kent

50%

33%

17%

17%

Recent controversiesin relation to the charitable sector

Other financial commitments

Time does not permit

Never gave it much thought


3.4.3 Ways of engaging in philanthropy

In response to the question ‘How do yougive?’, respondents identified a number ofmethods:

A small number mentioned giving through adonor advised fund (9%); writing charitiesinto their will (6%); or giving shares (2%).

03The most common annual giving levels were between €1,000 and €5,000 and between €10,000 and €50,000. The full responses produced the following pattern:

3.4.4 What philanthropy means to entrepreneurs in Ireland

a. Strategic, more engaged and purposeful giving

Two thirds of the respondents to the surveyunderstand ‘philanthropy’ to be a strategic, moreengaged and purposeful approach to charitablegiving. Their understanding of strategic and

57%

34%

32%

28%

19%

Once-off donations of cash, cheque orbank transfer

Through corporate donations

By direct debit/standing order

Own charitable trust/foundation

Mix of the above

Giving levels

21%

Less than 1,000

10,001 –50,000

100,001 –250,000

1,001 –5,000

5001 –10,00050,001 –

100,000250,001 – 500,000)

No entrepreneurs were donatingin the range 250,001 - 500,000

Over 500,000

15%6%10%

6% 21%

10%

(0%

21

impact focused giving was clear and articulatedin interviews and relates back to their entrepreneurial traits and experiences. Some alsocommented on the creativity and spirit that isrequired to devise new businesses, includingproblem solving. A few commented on theunique perspective of entrepreneurs, whichallows them to see the social problem differentlyto the public servant or the charity executive.This capacity brings added value in that theproblem is likely to be tackled in an innovativeway, which is likely to be more effective and to beless costly than more standard approaches tosocial issues.

b. The term ‘philanthropy’

One in ten did not relate the word ‘philanthropy’to themselves or their own charitable giving.80% of respondents do not see philanthropy as atopic that is discussed regularly amongst theirpeers. There is a strong association amongst

survey participants and interviewees betweenphilanthropy and high profile entrepreneurs suchas Bill Gates, Chuck Feeney and Denis O’Brien.‘Philanthropy is for billionaires’ was a responsefrom more than one interviewee.

A number of the interviewees expressed a discomfort with the term ‘philanthropy’ or ‘philanthropist’ and felt it was not an Irish term ora word that sits well in Irish conversations. Theysaw ‘philanthropy’ as being an American term. Theword philanthropy can appear elitist and so foronly a few. (“We are not as class conscious as theUK and the USA. If you start creating elitism, youwill turn off Irish support. It should be open toeveryone”). They believe that the culture in Irelandwould not support the US concept of prominentand public giving and tends towards a quiet,understated approach. One respondentsuggested the alternative ‘social investing’ as abetter term. This need for an alternative term isechoed by other interviewees.

A number of the interviewees expresseda discomfort with the term ‘philanthropy’or ‘philanthropist’ and felt it was not anIrish term or a word that sits well inIrish conversations.” ‘‘


The respondents were evenly divided betweenthose who felt that entrepreneurs don’t havetime to engage in philanthropy (33%), thosethat disagreed with that (33%) and those whowere neutral or unsure (35%). The intervieweesgave additional insight into this with the concept of the stages in the entrepreneurialjourney emerging as a theme. For example,those at the beginning of their entrepreneurialjourney are heavily committed (“I work morethan 80 hours a week at the moment and haveno time for anything but the business”). Whenthey have realised some of the value in theirbusinesses, they may have more time for charitable giving (“I have sold my business andnow have time to get involved in other things.”)

c. Bringing entrepreneurial traits to philanthropy

There is significant expectation that entrepre-neurs are likely to be drawn to philanthropicprojects with clear and defined social returnson the investment. The interviewees elaboratedto say that entrepreneurs have very strong egos(their term) and these drive their actions intheir businesses and elsewhere. They saw astrong determination to achieve outcomes,together with self-belief, as being part of themakeup of an entrepreneur which can be harnessed to meet philanthropic objectiveseffectively. These attributes will also drive theirengagement with philanthropy so that they arevery outcome/return on investment driven.

03They also expect those they work with to be efficient and accountable and many indicated the parties they engage with in philanthropy arenot as professional, efficient or as accountable asthey would wish.

d. Entrepreneurs giving back

In common with international research,entrepreneurs are strongly motivated by ‘puttingsomething back’. (“I have enjoyed success and so Ishould put something back”. “My parents raised usto believe that it is important to give back to thesociety we live in”). Another referenced the strongtradition of cooperation in communities,particularly in rural areas. The current poor economic situation has brought out this spiritagain with communities seeing that they mustfend for themselves and help one another. Theview was expressed that the level of philanthropyin Ireland is masked because there is a lot of activity going on all over the country but it is notcalled ‘philanthropy’. Rather it is seen as local co-operation and helping out a neighbour.

Almost half (48%) of respondents support theview that the best way entrepreneurs give back tosociety is through growing their business interestsand supporting new ventures but 21% disagreewith this view.

e. Collaborative giving

The potential of collaborative giving was touched

23

on in the report with 38% of respondentsagreeing that entrepreneurs are naturally drawnto collaborative giving and 19% disagreeing withthis concept. A further 44% were not sure. Thereare different possible interpretations of the term ‘collaborative giving’ ranging from formalised collective giving to giving that is influenced bypeer groups. The interviews focused on the peergroup dimension as well as collaborativeapproaches that entrepreneurs often use toachieve business success. One interviewee indicated that he had significant cynicism for theidea of philanthropy and a total lack of belief thatcharitable organisations were in any way efficientand deserving of support until a business personwhom he respected and admired approachedhim to support a particular cause. He wrote thecheque on the spot and has been impressed bythe efficiency and accountability of the organisation involved. He stressed the power and significance of peer invitation and validation.Two interviewees noted the growing use of philanthropic giving as a source of self-validationand peer group validation amongst high networth individuals, including entrepreneurs, inIreland.

3.4.5 The environment to support philanthropy in Ireland

The survey respondents’ were divided (at 50/50)as to whether they perceived the environment tobe ‘supportive/very supportive’ or ‘not supportive’of philanthropy. However, almost all of the

interviewees identified ways in which the environment could become more supportive inIreland and cited changes in tax legislation,attitudes to successful people and the lack of efficient and accountable interlocutors as examples of the shortcomings.

The survey scores ranged across a number of factors, notably:

50% scored the tax treatment of donations as not supportive and49% as supportive;

80% scored the ease of donation of complex gifts as not supportive, compared with 20% considering it as supportive;

63% rated the regulation and governance of the charity sector as unsupportive and 37% assupportive;

54% see media coverage of philanthropy as being unsupportive, with 46% seeing it as supportive;

Only 25% see the environment as offeringopportunities to bring an entrepreneurial approach to giving, with 75% considering that this is not the case;

62% consider access to specialist advice and services as unsupportiveand 38% see this as supportive


A number of interviewees mentioned recentchanges in the taxation system (whereby eligible tax relief goes straight to the recipientcharity and not to the donor) as being a regressive step. This change appears to havebeen felt deeply at an emotional level by someinterviewees. Some had experience of goodadvice and specialist information and so did notsee this as a barrier to philanthropy. Many citedthe ‘dead hand’ of public administration as abarrier to the development of greater philanthropic giving in Ireland with a perceptionthat the culture and mind-set within the public service are at variance with those of theentrepreneurial community.

Interviewees gave some additional insights intowhat might lie behind these scores. The economic climate has an impact on philanthropic giving and the current climateremains uncertain. Many do not want to beseen to have money in such difficult economictimes. The culture of begrudgery is still a consideration with many wanting to give quietly to avoid this. The attitudes towards ‘do-gooders’ are another deterrent. This tendencyvaried from sector to sector with ICT being morewilling to be open about their philanthropy andthe pharma/life sciences being the least willingto be known for having been a success and forengaging in philanthropy. The view was alsoexpressed that the tax system is not developedto support philanthropy. The US system wascited as a good example of a supportive tax

03system for philanthropic giving. The recentchanges in the tax system have cut the level ofmoney going to philanthropy because of theswitch to the benefit going to the charity. TheRevenue approach can be bureaucratic and sodelays getting charitable status for elements ofan enterprise that has social rather than profitmotives. Another interviewee saw a conflict ofinterest for the public service in facilitating philanthropic projects and a stronger philan-thropic sector. It would move aspects of socialwork, from the current system where it is doneby the public sector (or under the public sector’scontrol) to civil society, where it will be donemore effectively. The suggestion was made thatIreland’s culture is not well developed when itcomes to philanthropy, as it is not instilled ineducation or in many families. “We will neversee anybody stuck. We give generously to thenext crisis in Africa. However, we will not do it ina planned and strategic way to produce an outcome. We can do ad hoc but not strategic”.

There is a poor view of the charity sector and thisis impacting on philanthropic giving. This is evidenced by the views of interviewees on theneed for clarity on the governance and allocationof funds in the sector. The cynicism of manyinterviewees was strong on this, with limited orno belief that the capacity for efficient and effective action is in the sector. “Fifty per cent ofthe funds given to the charity sector are wasted.”This comment typifies the belief expressed byrespondents.

25

3.4.6 International trends

Respondents were asked to indicate their level ofinterest in seeing global trends and supports forphilanthropy replicated in Ireland, including:

In terms of replicating international trends, a number of interviewees mentioned the distinctiveaspects of Irish culture that needs to be taken intoaccount when considering Irish philanthropyincluding the strong sense of community and

We will never see anybody stuck. Wegive generously to the next crisis inAfrica. However, we will not do it in aplanned and strategic way to producean outcome. We can do ad hoc but notstrategic.”

‘‘62%

finding the emergence of specialistintermediaries/philanthropy guidance throughprofessional advisors to be of interest;

92%interested in more openness and less suspicion around philanthropy and philanthropists;

70% interested in bespoke services and giving plans tailored around individual needs;

75% interest in support for more complex gifts such as shares and property;

77%interest in models of engagement thatfacilitate inter-generational involvement in philanthropy;

87% interest in opportunities to engage earlier and in a hands-on way;

87%interested in collaborative giving opportunities arising from peer and business networks.


helping each other that exists in Ireland and inparticular in rural Ireland. A connection to placeand ‘where I came from’ emerged from a number of interviews. The sense from respondents was that the international trendswould have to be adapted to take Ireland’s culture and way of doing things into accountbefore seeking to implement them here.

3.4.7 Communicating with entrepreneurs effectively

The overall sense was that entrepreneurs foundthe usual approaches to being asked to supportcharitable causes in Ireland to be often unsophisticated, unsubtle and not strategic.Through some of the interviews, the interviewees expressed reservations in relationto the usual methods of approaching wealthy individuals for charitable donations.

The survey responses indicated the strong preference of entrepreneurs is to be communicated with in relation to philanthropyvia contact through peer and business networks(with 98% agreeing that this is a very effectiveor somewhat effective method of contact). Thenext most preferred is through intermediariessuch as CFI or The Ireland Funds (91%). Greaterclarity about overheads and expenditure in non-profit organisations, through the Internetand social media and professional/wealth advisers and respected intermediaries were thenext most preferred methods. Articles, guidance

03

studies and other printed materials were thenext preferred by 82.6%.

In summary, the report shows that the majorityof entrepreneurs are engaged in giving – oftenthrough financial contributions as well asthrough giving their time. However, they span awide spectrum in terms of whether they give ina structured and strategic way (for example, afew have a donor advised fund or their own trustor foundation) or whether they give on an ad hocbasis. Their motivations to give align closely withinternational studies but they also express aclear interest in seeing more opportunities togive in Ireland which align closer with some ofthe characteristics which have contributed totheir business success, including opportunitiesfor engagement, creativity and innovation, aswell as a return on their social investment.

91%of entrepreneurs have apreference to be communicated with throughintermediaries such as CFIor The Ireland Funds.

27

and encouraging entrepreneurs to engage in philanthropy

04Against a backdrop of an emerging literature on thetopic internationally, this report provided the opportunityto gain insights into how entrepreneurs in Ireland viewphilanthropy.


International research and experience indicatethat entrepreneurs tend to engage in philanthropy in a distinctive and creative wayand often wish to give back to society (or oftena particular geographical area such as wherethey came from) on foot of their success in business. In doing so, they tend to bring many oftheir business skills to their giving. Such skillsinclude being innovative, solution oriented, aswell as the capacity to think outside the boxand problem solving. The ways in which entrepreneurs give often align with their business style and this has led to a growinginterest in more hands-on engagement on thepart of such donors and the emergence of anumber of different models of giving includingventure philanthropy, social entrepreneurshipand social investment.

Notwithstanding a strong culture of giving,18

Ireland has a weak tradition when it comes tomore structured giving, as evidenced by the tinypool of trusts and foundations in Ireland.19

Despite the significant setbacks of the recentrecessionary period, there has been strongunderlying growth in the economy and levels ofwealth in the past 25 years. In addition to thesuccess of foreign direct investment, there hasbeen a strong entrepreneurial component toIreland’s economic growth. If we are to meet theaspiration of developing more planned andstrategic philanthropy in Ireland, entrepreneursare a key constituency with the capacity toengage more – both in terms of providing

04financial support, as well as their time and talent.

Looking internationally confirms that a supportiveenvironment for philanthropy encourages entrepreneurs to engage in philanthropy. Therealso needs to be an effective infrastructure to support giving, including the capacity of non-profit organisations to engage effectively withentrepreneurs, as well as varying models ofengagement, channels of giving and the facilitation of complex gifts.

So what insights does the report give us into howentrepreneurs might be encouraged to engage inmore strategic, planned and purposeful charitablegiving and how might the support environmentbe improved? The following recommendationsarise from direct suggestions by respondents tothe survey and by the interviewees.

4.1 Developing supports for donors A number of suggestions and recommendationsarose in the report around developing better supports for donors to engage in more structured,strategic and more purposeful charitable givingincluding:

Business networks

The survey responses indicated that 80% ofrespondents do not see philanthropy as a topicthat is discussed regularly amongst their peers.On the other hand, the report identified a strong

29

preference on the part of entrepreneurs to be communicated with in relation to philanthropy viacontact through peer and business networks (with98% agreeing this is a very effective or somewhateffective method of contact). In addition 87% ofrespondents were interested in collaborative givingopportunities arising from peer and business net-works. A variety of business groups – including tradeassociations and business and sectoral networkscould play an important role in introducing philanthropy and opportunities for charitable givingto their areas of interest and work programmes. Inline with global research, the importance of peer invitation and validation (in relation to introducingor endorsing particular charitable initiatives or non-profit organisations) was also raised in the report.

Philanthropic intermediaries and professional advisers

There were mixed findings in relation to accessingspecialist advice and services. Almost two thirds(62%) did not perceive that there is easy access tosupportive advice and services. On the other hand,some respondents had experience of good adviceand specialist information and so did not see this asa barrier to philanthropy.

Almost two thirds of respondents (61%) indicatedthat the emergence of specialist intermediaries/philanthropy guidance through professional advisers would be of interest. Such services havegrown rapidly in markets such as London in recentyears and are emerging in Ireland as well. CFI

18 The 2014 World Giving Index places Ireland at 4th place19 Philanthropy in the Republic of Ireland, McKinsey & Co, 2010

of respondents do not see philanthropy as a topic that is discussed regularly amongst their peers.

identified a strong preference to be communicated with in relation to philanthropy via contact through peer and business networks

of respondents wereinterested in collaborative giving opportunities arising from peer and business networks.

80%

87%

98%


works closely with many professional advisersand receives valuable advice and supportthrough its Professional Advisers AdvisoryGroup.

The report indicated a strong interest in a number of areas where professional advisersand philanthropic intermediaries (such as CFI)can play an important role working with donors.These included an interest in bespoke servicesand giving plans tailored around individualneeds (on the part of 70% of respondents), 75%of respondents expressed interest in support formore complex gifts such as donating shares andproperty and 77% were interested in models ofengagement that facilitate inter-generationalinvolvement in philanthropy.

38% of respondents consider that entrepreneursare drawn to collaborative giving opportunities.This is an area which is only emerging in Irelandand is being facilitated by philanthropic organisations such as CFI, Social EntrepreneursIreland, Ashoka, Social Innovation Fund Irelandand ChangeX.

Encouraging early engagement

Encouraging early engagement amongstentrepreneurs is about building the relationshipwith philanthropy in advance of the time of significant philanthropic giving. The early stagesare often a challenging time for such engagement in the following respects: other

04

than in the formal start-up hubs, early stage successful entrepreneurs do not present as easilyidentifiable targets; they are also very busy anddon’t have much or any free time available.However, a thread in the interviews was thecapacity for early stage entrepreneurs to have aphilanthropic aspect to their business from thestart but that this needs to be supported by thetax system to allow it to flourish.

4.2 The non-profit sector The second area where a number of suggestionswere made related to the non-profit sector andindeed individual non-profit organisations,including:

Address concerns about governance and effectiveness

63% rated the regulation and governance of thecharity sector as unsupportive and only 37%perceived it to be supportive. The report

ormal

of respondents

consider that

entrepreneurs are

drawn to collaborative

giving opportunities

31

highlighted that there is a poor view of the charity sector amongst entrepreneurs and this isimpacting on philanthropic giving. This isevidenced by the views of interviewees on theneed for clarity on the governance and allocationof funds in the sector. The cynicism of manyinterviewees was strong on this, with limited orno belief that the capacity for efficient andeffective action is in the sector.

Clearly recent controversies in the non-profitsector in Ireland have impacted on how the sector is perceived – both as an overall sector, aswell as individual organisations. While the sectoritself has work to do in restoring confidence, italso comes back to individual non-profitorganisations to assure potential and currentdonors regarding their governance and efficacy intheir core work.

Refining the ‘ask’

The report identifies that Irish entrepreneurswould welcome more sophisticated, subtle andstrategic approaches for support. A direct “Givemoney to this important cause” is unlikely to be

successful and will not acknowledge or harness theattributes that entrepreneurs recognise inthemselves as being very valuable and capable of making a significant difference.

Entrepreneurs do not see the standard approaches,which are used in Ireland to elicit donations, in apositive light. A number of the interviewees werequite cynical on the concept of charitable giving. Itis also interesting to note that in practice two thirds

Recent controversies in the non-profitsector in Ireland have impacted on howthe sector is perceived.” ‘‘

Only 25% see the environmentas offering opportunities to bring anentrepreneurial approach to giving


give once-off donations.the environment as offering opportunities

Only 25% see

to bring an with 75%

entrepreneurial approach to giving,considering that this is not the case.

The process of engagement with successfulentrepreneurs around philanthropy will requiredesign and testing to ensure that it takes theirspecific characteristics into account anddifferentiates the philanthropic ‘ask’ from thestandard charity donation ask. It will need toexplore the extent of engagement that theentrepreneur would like to have and harness thespectrum of support the entrepreneur wishes tooffer. Because of their interest in efficiency andeffectiveness, entrepreneurs are also likely towant evidence of these in both the organisations they engage with and in theoutcomes that they seek to secure through their involvement.

04Developing processes for active engagement

Entrepreneurs want to apply their skills to problems. They derive satisfaction from seeing aproblem, innovating a solution and implementingit – making it work. They are interested in gettinginvolved in problems of interest to them, allowingthem to see first-hand the issues that exist andencouraging them to develop ideas and approaches that draw on their skill set.

4.3 Public policyThe final area where recommendations arose wasin relation to public policy, including:

Effective regulatory environment

Notwithstanding the role of individual non-profitorganisations (as well as the wider sector), it isultimately the role of the State to ensure effectivegovernance, transparency and accountability ofthe charitable sector in Ireland. With the appointment of the Charities Regulatory Authorityin 2014, Ireland is finally moving towards having amodern and effective regulatory regime but it willbe essential that the Regulator is given adequateresources and consistent support in order toensure that this is achieved.

Harnessing the ‘can do’ and drive of entrepreneurs

Many cited the ‘dead hand’ of public administra-tion as a barrier to the development of greaterphilanthropic giving in Ireland with a perception

Entrepreneurs want to apply their skills to problems. They derive satisfaction from seeing a problem, innovating asolution and implementing it –

making it work

(63%)

33

that the culture and mind-set within the publicservice are at variance with those of theentrepreneurial community. Entrepreneurs areacknowledged as having drive and a ‘can do’attitude. However these are attributes that thepublic administrative system often characterisesas ‘a loose cannon’. A capacity to understand andwork with entrepreneurs is key to success in harnessing not just the financial strengths thatsuccessful entrepreneurs can contribute but alsoto facilitating the engagement of the particularskills and perspectives that entrepreneurs havetowards the social issues that often defy thepolicy system to solve.

A key challenge is the lack of time on the part ofentrepreneurs (up to a late stage in their entrepreneurial careers for many but some wouldengage from the beginning), together with theirdesire to be in charge and to drive the project.

Having a capacity to engage entrepreneurs requiresunderstanding and flexibility. Traditional structuresand processes such as boards and committeesdon’t function with innovation and speed to matchthese entrepreneurs. Consequently, it will takeimagination to develop methods that can attractand retain their energy and drive effectively, whilealso monitoring the approaches to ensure thatthey meet the criteria and outcomes desired, allwithin the bounds of today’s governance standards.

Effective fiscal environment

The tax system has potential to incentivise philanthropic giving – or penalise it. The administrative change which took effect in 2013 toallow the charity to reclaim the tax paid, ratherthan to be claimed against the donor’s tax bill, wasremarked on negatively. It is perceived as a

A key challenge is the lack oftime on the part of entrepreneurs

Interviewees identified the need to introduce a new incentive to promote investment in projects/businesses/organisations that are tackling social issues


disincentive to charitable giving and somewhatbureaucratic for the donor. Interviewees held theopinion that the US tax set off system hasfacilitated the development of philanthropic giving in the United States.

Interviewees made a number of specific fiscalrecommendations that are likely to work withentrepreneurs. Specifically, they identified theneed to introduce a new incentive to promoteinvestment in projects/businesses/organisations that are tackling social issues.For example, the suggestion was made toallow entrepreneurs selling their company toretain 25-50% of the Capital Gains Tax thatis payable in a fund for investment inphilanthropic ventures with demonstrablesocial impacts. The social issues would benefitfrom funding, the entrepreneurial capacity of the successful entrepreneur and the other expertise that the entrepreneur could attractfrom his/her network. The resolution of social issues can benefit from alternativethinking and entrepreneurial approaches to problems and a capacity to see the opportunity where others see an issue. The entrepreneursees that he/she can make a difference by putting his/her time into the direction of the fund and that this effort issupported by a tax incentive. The State gets different thinking and management capability forno cost. The beneficiaries receive greater fundingand alternative approaches to the issues. An

04

35

additional suggestion was to make the tax rulesfriendlier to the endowment of foundations ordonor advised funds.

Creating an ‘Irish’ meaning of Philanthropy

From a wider public policy dimension, the reportconfirms that entrepreneurs would seem toshare a general wariness if not mistrust of theterm ‘philanthropy’ and yet 92% were interestedin more openness and less suspicion around philanthropy and philanthropists. The reportindicates that the term ‘philanthropy’ often tendsto be associated with the United States, as wellas being associated with large scale philanthropyon the part of the mega wealthy and havingsomewhat negative connotations in an Irish context. On the other hand, the survey showedthat those interviewed had a clear sense of philanthropy as entailing strategic, purposefuland engaged charitable giving, which they generally saw as a positive way to give. Thereport suggests that what is needed is a model of philanthropy which aligns with Irish culture andvalues and not a direct import of a US style ofphilanthropy. There is a need for clarification ofhow such issues will be addressed from a publicpolicy perspective and in particular given theuncertain status of the Government appointedForum on Philanthropy which had a mandate toencourage greater philanthropy in Ireland.

4.4 ConclusionThis report – ‘Giving and Gaining - How entrepreneurs view philanthropy in Ireland’gives interesting insights into how entrepreneurs view the environment for givingin Ireland. Entrepreneurs have concerns aboutstandards of effectiveness and governance within non-profit organisations, as well asreservations about current fiscal arrangementsin relation to charitable giving. Notwithstandingsuch reservations, there is a clear interest andappetite amongst entrepreneurs to see certaininternational trends replicated in Ireland,including more opportunities for collaborativegiving, better tax incentives and greater facilitation of complex gifts. Given its historicover reliance on state funding, the charitable sector needs to identify new streams of sustainable funding and philanthropy has animportant role to play to help to deliver just andprogressive social change. Although for themost part already giving in a variety of ways,this report identifies a latent potential for entrepreneurs to engage more – both in terms of their financial contributions but also inbringing a mind set and skill set that has much to offer as Ireland starts the process ofrebuilding its social capital and infrastructure.


05

37

5.1 Getting startedDeciding to take a new approach to charitablegiving may be prompted by a number of factorsincluding:

An opportunity has arisen Perhaps you have had a windfall gain throughthe sale of a business or an inheritance and feelyou would like to ‘give back’ a bit more?

Frustration with your current giving Maybe you feel that your current charitable giving is somewhat ad hoc but that you wouldlike to adopt a more selective and strategicapproach?

Engaging your family Maybe you would like to pass on a spirit of givingto the next generation or continue a family legacy?

5.2 Giving optionsPhilanthropy can take many forms but the mainoptions for individuals and families are:

To give directly This approach works well where there are fewtransactions and it is also most appropriate forsmaller scale charitable giving where the level ofgiving would not justify any administrative costsand is manageable for the donor.

To set up a charitable trust or foundation Setting up a foundation allows flexibility in

choosing the areas to support and in theapproaches taken to philanthropic investment.However, it also requires a commitment of timeand resources. The majority of philanthropicorganisations in Ireland are established as acharitable trust or as a company limited byguarantee and not having a share capital.20

To set up a donor advised or family fund Community foundations are pioneers of DonorAdvised Funds which provide many of the samebenefits to a donor as a private family charitablefoundation (including all tax reliefs) but donorsare also able to access the community foundation’s grant making expertise, due diligence, monitoring and reporting processes.

5.3 Donor Advised Funds – How does it work?Based on a simple fund agreement, the donor sets up a donor advised fund at The Community Foundation for Ireland in theirchosen name. Management fees are agreedup front and there are no hidden charges;The donor makes a gift to CFI (in cash orshares);Following recent changes in relation to tax relief for charitable donations, any eligibleincome tax relief on that donation accrues directly to the Fund;

20 For additional information see Philanthropy Ireland: Guide to Setting up a Foundation in Ireland


The donor identifies the cause(s) which they would like to support and CFI’s staff will assist in ensuring that the money goes to theproject where it can make most impact;CFI handles administration and issue grantsin the name of the fund or anonymously (asthe donor chooses);The donor receives agreed feedback and outcome reports;The donor can choose to increase or reduce their level of grant-making periodically basedon their time and financial demands.

5.4 Tax relief on donations to charity

a. Personal donations

Key Features of the Revised Scheme in relation totax relief on donations to charity: 21

Tax relief in respect of donations made on orafter 1 January 2013 by individuals (whether self-assessed or PAYE-only taxpayers) to anapproved body is allowed to the approved body rather than to the donor at a blended rate of 31%;An annual limit of 1million per individual can be relieved under the revised scheme anddonations under the scheme are no longer subject to the higher earner restriction;In the case of a donor who is “associated”with the charity (employee, board member,member etc.) the limit for tax relief on donations to a maximum of 10% of annualincome continues to apply;

05In the case of a donor advised fund at The Community Foundation for Ireland, the tax relief will accrue directly to the fund. For example, a donor makes a donation of 10,000 to their donor advised fund. If eligible, the tax relief, grossed up at 31% on that donation will accrue directly to the donor’s fund (once it has been claimed back from the Revenue Commissioners) resulting in a revised balance of

14,493 in that fund to disperse to charitable causes.

b. Corporate donations

If a company donates to an approved charity, thedonation can be treated as a trading expense (subject to a minimum donation per charity of

250), and so will be deductible for corporation tax.

5.5 Complex gifts, including shares

a. Donating shares (plc)

In 2005, income tax relief was introduced for thedonation of publicly-quoted shares to eligible charities. Those giving gifts of publicly quotedshares (of 250 or more) have to choose betweenan Income Tax relief and capital Gains Tax (CGT)relief. If income tax is chosen, the procedures arethe same as for cash donations. If the donor optsfor CGT relief, the sale of the shares will be treatedas a ‘no profit no loss’ sale i.e. it is treated as if theshares were sold for exactly the same price as waspaid for them.

39

b. Donating shares (private company)

A donor may still decide to donate shares in a private company to a charity. However, unlike inthe case of publicly quoted shares, the charity (forexample, The Community Foundation for Ireland)would arrange for sale of the shares in order torealise their value. Similar to donating any otherasset to charity or to a philanthropic organisation, the donor will be treated as ifhe/she did not make a profit or loss on thetransfer of the asset. As long as the proceeds areused for charitable purposes, the recipient charity

will not have to pay either CGT when it sells theasset, or any form of Capital Acquisition Tax (i.e.Gift or Inheritance Tax) on the original gift of theasset.

c. Other gifts

The case study in relation to Silicon ValleyCommunity Foundation (SVCF) in this study highlighted that the SVCF has worked with entrepreneurial donors in the US to facilitatecomplex gifts including shares, bitcoins and ripples(forms of virtual currency), as well as pre-IPO sharesin start-ups and property. Some guidance inrelation to the taxation of a variety of innovativegifts and property is contained in PWC’s CharitableGiving Guide22 or please contact your professionaladviser or CFI to ascertain the way such gifts wouldbe treated in an Irish context (if known).

5.6 The Community Foundation for Ireland The Community Foundation for Ireland (CFI)empowers people and organisations who want tomake a difference through a model of philanthropythat is based on trust, effectiveness and impact.Established in 2000, CFI has made grants on behalfof donors of over 20 million in Ireland and overseas.

For example, a donor makes a donation of

10,000 to their donor advised fund.If eligible, the tax relief, grossed up at 31% on thatdonation will accrue directly to thedonor’s fund (once it has beenclaimed back from the RevenueCommissioners) resulting in arevised balance of 14,493 in thatfund to disperse to charitablecauses.

21 Which took effect on 1st January 2013.See www.revenue.ie/charities for additional information

22 Helping to maximise donations to the wider community, PWC, 2013


CFI has a proven track record in empoweringdonors who want to make a real difference intheir communities by tackling social issueseffectively through:

Being here for the long term and operating within a proven model of philanthropy;A dedicated and committed staff withextensive experience of grant-making in Ireland and overseas;A strong commitment to ensuring that CFI attains impeccable standards of governance and transparency and follows bestinternational practice;Insights and working relationships with over 3,000 non-profit organisations at a national,regional and local level throughout Ireland;Partnering with professional advisers tocreate highly effective approaches tocharitable giving;Ensuring giving is fast, efficient andrewarding, as well as cost effective for donors.

055.7 Resources Websites The Community Foundation for Ireland www.communityfoundation.ie

Ashoka www.ireland.ashoka.org

ChangeX www.changex.org

New Philanthropy Capital www.thinknpc.org

Philanthropy Impact (formerly Philanthropy UK) www.philan-thropy-impact.org

Philanthropy Ireland www.philanthropy.ie

Social Entrepreneurs Ireland www.socialentrepreneurs.ie

Social Innovation Fund Ireland www.socialinnovation.ie The Ireland Funds www.theirelandfunds.org

UK Community Foundations www.ukcommunityfoundations.org

Reports Coutts Philanthropy Handbook (www.coutts.com/files/pdf/phi-lanthropy-handbook-sample.pdf)

Giving and Gaining through Philanthropy – A guide to familyand personal giving (The Community Foundation for Ireland,2013)

Guide to Giving; Association of Charitable Trusts(www.acf.org.uk/uploadedFiles/Publications_and_resources/Publications/Publication_repositry/AGuidetoGiving3rded.pdf)

Handbook of Research on Entrepreneurs’ Engagement inPhilanthropy (Taylor, Strom and Renz, 2014)

Helping to maximise donations to the wider community, PWC,2013 www.pwc.com/ie/pubs/2013_charitable_giving_guide.pdf

Ireland’s Vital Signs 2015 (The Community Foundation for Ireland,downloadable at www.irelandsvitalsigns.ie)

ONE Final Report, 2014 (www.onefoundation.ie)

Philanthropy in the Republic of Ireland, McKinsey & Co (2010)

Report of the Forum on Philanthropy and Fundraising (2012)

Richer Lives; why rich people give (Breeze and Lloyd, 2014)

This report was written by Jackie Harrison, Head ofDevelopment at The Community Foundation forIreland based on an independent study undertakenby Sia Partners which was commissioned by CFI in2014. The information contained in this report ismeant only to serve as a guide. CFI recommends thatwhere appropriate, individuals and families seekadvice from professional advisers.

To find out more about any of the topics covered inthe Guidance Report, please do not hesitate to contact Jackie Harrison ( [email protected]) The Community Foundation for Ireland32 Lower O Connell StreetDublin 1Tel: + 353 1 874 7354 www.communityfoundation.ie

10 YEARS Strengthening Communities through Philanthropy

The CommunityFoundation for Ireland

32 Lower O’Connell Street, Dublin 1, IrelandTel: (01) 874 7354 Fax: (01) 874 7637Email: [email protected] www.communityfoundation.ie

The Community Foundation for Ireland Ltd. Charity No. CHY 13967

Registered Office: One Spencer Dock, North Wall Quay, Dublin 1. Company Limited by Guarantee.

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