Foundations everywhere should donate at least five percent of their assets each year. That shouldn’t be controversial

The social contract between society and its key institutions is fraying. In an ideal world, philanthropic institutions – with their long view, their flexibility, and their independence – would be taking the bold action which others can’t or won’t. Despite self-perceptions to the contrary, too often, at least in the UK, they’re not taking the steps which our times demand. That’s particularly true for the question of how much foundations should be expected to give today versus an indefinite future period.  

Despite critical challenges, British philanthropy seems stubbornly opposed to proposals for those with the most resources to give more through a mandatory five percent payout each year. Why is that?  

Fundamentally, it’s an issue of freedom. No one likes to be told what to do. Donors prefer to give what they want, when they want, and how they want. The Association of Foundations, which represents British foundations, has stated that the introduction of payouts – at any level – is ‘a really bad idea’.