The land of saints and Scrooges

We're always patting ourselves on the back for our generosity, but a recent survey has found that Irish people rank very poorly in giving to charity, writes Joe Humphreys.

Of all the myths that Irish people perpetrate about themselves, none is more pernicious nor ill-founded than the belief than they are the most generous people in the world. No one gives more to charity per capita than the Irish. Right? Wrong, a new report by US researchers shows.

Of 20 developed countries surveyed by the Johns Hopkins Institute in Maryland, Ireland ranked a lowly 12th in terms of private philanthropy - measured as "volunteering and giving" as a percentage of GDP. The survey (see graph) estimates that between 1995 and 2000 people gave 0.55 per cent of GDP to charity in Ireland, compared to 0.62 per cent in the UK, 0.87 per cent in Spain, and 1.01 per cent in the US.

"If you look at the size of the population and the income of the population, and then you look at what is happening in terms of philanthropy there is a mismatch," says Dr Freda Donoghue of the Centre for Nonprofit Management at Trinity College Dublin, who collated data from Ireland for the US research team. "Philanthropy is not happening at a high-income level. It's not happening at a business level. We don't have the kind of culture of philanthropy that they have in other countries where people give in a consistent, planned and sustained way."

She traces misperceptions about levels of Irish generosity to the Band Aid and Live Aid phenomena of 1984-5. An oft-repeated claim is that Ireland gave more per capita to the Bob Geldof-inspired "Feed the World" campaign than any other country. But, says Donoghue, "I have looked into it and I have never come across any solid research to support that claim." She notes there appears to have been a flood of calls made to the Live Aid studio from Ireland, and on the basis of that anecdote, "the same line is trotted out, 'Ireland are great with their largesse'." What research there is in Ireland on philanthropy indicates that few people - and fewer businesses - give a minimum of 1 per cent of their income to charity. Moreover, people in higher income brackets tend to give less proportionately than those in lower ones. The Irish Charities Tax Reform Group (ICTRG), which is lobbying for new tax reliefs for philanthropists, estimates that the average Irish person donates just €100-€130 a year to charity.

A recent survey commissioned by the Community Foundation for Ireland (CFI) also points towards miserly habits. Some 22 per cent of respondents said they gave nothing at all to charity. Half that proportion, or 11 per cent, said they contributed at least €21 a month, or €250 a year - enough to allow their chosen charity get tax relief on their donation.

Figures from the Revenue Commissioners suggest even fewer people reach this tax relief threshold, with just under 30,000 PAYE workers - or 1.6 per cent of the labour force - making registered donations of €250 or more in 2003.

However, Niamh Ní Chonghaile, chairwoman of the ICTRG, believes such figures underestimate the generosity of Irish people. Many donations of more than €250 are not registered for tax relief because people fail to provide charities with their RSI numbers, she says. More importantly, a donation of €250 split between two charities does not qualify for relief. "A lot of people give money to both a Third World charity and a domestic charity. If you want both to benefit from tax relief you have to give a minimum of €250 to each, which is a lot of money."

Ní Chonghaile, who is financial controller with the Irish Cancer Society, says the issue highlights the need to lower or eliminate the €250 relief threshold for donations - a move which she believes would increase donations significantly. The ICTRG is also seeking for donations of assets and other non-monetary goods, like shares or property, to be eligible for tax relief in order to encourage more philanthropy.

Since Budget Day, the group met Department of Finance officials to discuss these and other possible reforms, like the abolition of VAT on charities, in the hope of influencing next month's Finance Bill.

CFI CHIEF EXECUTIVE Tina Roche believes such reforms are necessary if Ireland is to create the same culture of philanthropy that exists in the US, where people can benefit from tax relief not only on asset donations but on bequests to charity made in one's will. "No one gives because of tax laws but it is a driver in giving. It can get people to give more," says Roche, whose organisation is geared towards attracting high-wealth individuals in Ireland to philanthropy.

Since its establishment in 2001, the foundation has amassed an endowment fund of €1.6 million - in part thanks to the current tax laws which allow self-employed people who are paying in the top income bracket to get 42 cent back on every €1 donated to charity.

Among CFI's backers is Roscommon motor distributor Jim Callery, who has a previous track record in charitable works, having rescued Strokestown House from ruin in the 1980s. A key motivation for his setting up of a fund for projects in his local community was frustration over the way in which the area had been neglected by the State.

"There are forgotten towns and villages in rural Ireland. Places like Elphin and Strokestown have never had an employment project in their life." Establishing the "Callery family fund" was "a way of giving something back", he remarks. "It gives you a level of control over your own taxes. It allows you some control over where your money goes."

A small but increasing number of high-wealth individuals are coming round to the same view. J.P. McManus is a long-established supporter of health and education projects in his native Limerick; Denis O'Brien gave money to establish the human rights group Front Line; and golfer Pádraig Harrington this week announced the establishment of a Charitable Foundation in his name.

In the US, a new breed of "venture philanthropist" has proved unwilling to send off cheques to a charity without also getting something in return - perhaps a seat on the charity's board. Roche believes, however, such "deeper involvement" should be seen an opportunity rather than a threat. "Business people can bring problem-solving skills, and thought and reflection, to a charity as well as money."

WHAT, THOUGH, IF governments use increased private philanthropy as a reason to cut back on State funding for important services? "There is that fear there," says Donoghue. "The US is a more self-serving society, and because they have a weaker social services structure there is recognition for the private sphere of philanthropy. The question is how to create the right balance between the private sphere and the public sphere."

Believing that Ireland relies too heavily on the latter, she argues: "We are not used to taking a long-term view with our wealth because we have not had it for very long. We have to become less adolescent, less childish, in our approach to money, and realise there are things that matter more than the next new mobile phone."

But if people do start to divert more of their income to worthy causes they still have to figure out exactly how much to give. The United Nations believes governments should donate 0.7 per cent of their income to overseas development aid. Should ordinary citizens follow a similar guide? Under the obligatory code of zakat, Muslims typically give 2.5 per cent of income and capital annually to charity. Some Christian churches in the US recommend a benchmark of 10 per cent of income a year, while the general rule among high-earning Americans (of all creeds) is "five per cent" annually, says Roche.

Whichever of these figures one settles on, it seems the Irish are not making the grade. Is it too early perhaps for a New Year's resolution: make 2005 the year when we earn our reputation for giving?