ENTREPRENEUR Sir Tom Hunter describes himself as a canny Scot — “I don’t give anything away” — but over the past decade Hunter has invested (as he describes it) tens of millions of pounds in charitable causes.
Hunter, who pledged in 2004 to give a total of £100m to the Hunter Foundation, is one of a growing number of entrepreneurs who are giving chunks of their fortunes to charity.
The Sunday Times reveals this weekend that David and Simon Reuben have donated $100m (£56m) to the Reuben Foundation. The brothers, whose fortune was founded on aluminium mining in Russia and Afghanistan, are worth an estimated £2.5 billion, having made a second fortune investing in the London property market.
Last year George Weston, the chief executive of Associated British Foods, gave away an estimated £68m. Gerald Ronson, the property developer, has pledged to donate his 23% shareholding in Heron to the new Ronson Foundation, which gives money to children’s charities. And John Studzinski, the joint head of HSBC’s investment-banking division, gives half his annual salary to human-rights causes, the homeless and the arts.
There is a new generation of philanthropists, but they are more demanding than their predecessors. They want to see returns on their “investment” and bring the discipline of business to their giving.
Daniel Phelan, who is publisher and editor-in-chief of Professional Fundraising magazine, describes this new generation as “venture philanthropists”.
“Major donors want a lot more from their giving these days than just the warm, comforting glow that they have done some good,” he said.
The baby boomers who grew up trying to change the world, or the younger entrepreneurs who made their money in the 1980s and 1990s are not prepared to hand over large sums of money without having some kind of input into how the money is used.”
Up to 5% of any donation made by the Hunter Foundation is spent on assessing the impact of donations: when Hunter funded an enterprise programme in all Scottish primary schools, Warwick University was employed to assess the project’s success.
Charities are set short-term and long-term targets, with key performance indicators to measure their progress.
“We expect to see a return,” said Hunter. “We want to see that our money has made a difference. In extreme circumstances we would pull the money out. We don’t just put the money in and hope.”
Robin Turner runs the Reuben Foundation, but he stresses that it is David and Simon Reuben who make the final decision on any donations. “They want to make sure that it is run properly,” said Turner.
The Reuben Foundation has up to now focused on helping medical and educational charities, and is currently working on creating scholarships.
But why are a growing number of entrepreneurs giving large chunks of their fortunes away? Hunter said that “investing” the money was fun.
Born in the tough Ayrshire mining community, he made his first fortune when he sold Sports Division, a 240-strong chain of shops he had founded, to JJB for £290m.
The decision to give away £100m of his estimated £678m wealth was made jointly with his wife. “We thought why leave it until we are dead. Why let someone else have the fun? I want to see things happen while I am alive.”
He was partly inspired by the legendary philanthropist Andrew Carnegie, the Scottish entrepreneur who became the world’s richest man in the late 1800s as a steel magnate.
But Hunter also drew inspiration for his “venture philanthropy” from Bill Gates, the billionaire co-founder of Microsoft, who has so far given away $26 billion to the Bill & Melinda Gates Foundation.
Gates, who is involved in the day-to-day running of the foundation, is spending a large chunk of the $26 billion on tackling disease in the developing world. Gates has a top 20 hit list of diseases and ambitious targets for tackling each of them.
But despite the generosity, the new philanthropists insist that they are still focused on business.
Ronson now jokingly refers to himself as a charity worker — but he stresses that he still wants to make money.
And Hunter insists that he has not lost his edge. “I am still committed to wealth creation,” he said. “I have not turned into Mother Teresa. People will still find me quite difficult to deal with.”
The top donors ranked by donations and commitments made in 2004
1 George Weston £68.6m
2 Lord Sainsbury £58.6m
3 Hans Rausing £54.3m
4 Sir Tom Hunter £50.2m
5 Sir Elton John £22.6m
6 David and Simon Reuben £20.2m
7 Robert Edmiston £10.7m
8 Roger De Haan £7.5m
9 Leo Noe £5.1m
10 Sir Peter Vardy £4.6m
Source: The Sunday Times Rich List 2005