Cathy Pharoah: Youth causes can be a hard ask, but a tax break for donations might help

Charitable foundations are more committed to such causes, says our columnist, but the amount they contribute does not make up for the decline in public and statutory funding

Cathy Pharoah
Cathy Pharoah

Nearly a quarter of a century ago, the sociologist Ralf Dahrendorf, in his 1987 lecture The Underclass and The Future of Britain, highlighted the cumulative impact of unemployment, poor housing and illiteracy on young people, and asked voluntary sector leaders "who will make the underclass their cause?"

One of the dilemmas faced by the charitable sector in responding to this challenge is that potential donors are deeply divided on whether disadvantaged young people who display anti-social behaviour deserve their support.

Youth causes have never been a major concern to the donating public: they attract less than 1 per cent of giving to the major charities, and their popularity has declined compared with other causes such as cancer or international development.

A striking contrast, however, is the significant priority given to youth causes by charitable foundations. One of the few studies of UK grant-making (Vincent and Pharoah, 2000) showed young people were the single highest beneficiary group mentioned in grants - 23 per cent, with children a close second at 18 per cent. Issues supported included youth work, social services and employment and training. In their understanding of youth need, trusts and foundations have been closer to local authorities, who provide at least half of the funding of youth charities. But, with their relatively fixed resources, trusts and foundations provide only about one-fifth of the funding given by the general public or statutory funders. This is why potential cuts in statutory spending on youth services are of such concern.

But if there is donor reluctance to support youth needs today, fundraising might get even harder if the trend towards sector dependence on an ever-older donor population continues. An even greater gulf could open between older donors who feel too threatened to be sympathetic, and young people whose behaviour appears increasingly threatening. Initiatives addressing this gulf are being undertaken by charities such as age2age, supported by foundations including the Glass-House Trust and the Rayne Foundation. The Private Equity Foundation is dedicated to the needs of young people not in education, employment or training and recently received a Big Lottery Fund commitment to pioneer a social impact bond.

But more resources like these are needed because youth disaffection is complex. Supernanny's 'naughty step', or its judicial equivalent, is important as a short-term measure, but will not tackle longer-term issues. Perhaps the government could 'nudge' donors towards causes of disadvantage by prioritising them in tax reliefs?

In a vision that looks remarkably like the big society, Dahrendorf asked for "a hundred, if not a thousand, local initiatives" to stand up for the dispossessed and be supported. But with a philanthropic deficit in this area, the question is: how?

Cathy Pharoah is professor of charity funding at Cass Business School.

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