June 2007
The concept of a social contract is a well-developed one: an agreement under which citizens accept the fiscal and moral authority of the state, in return for its protection of their interests and their freedoms. Following the Second World War, this agreement saw the British government provide a life-long range of social services for each of its citizens, for which it charged a high rate of income tax. The formula was simple: citizens would hand over the lion’s share of their wealth to the state, and the state would in turn provide the full array of cradle-to-grave social services.
More recently, that relationship has changed: now, the UK citizen bears a lighter tax burden than before, with the result that he or she is free both to make and retain great wealth. However, the alleviation of that fiscal weight has not been matched, as we believe it should, by a rise in charitable giving. At the Institute for Philanthropy, we therefore feel that it is time for a new social contract in British society.
This new contract would be one of reciprocity, with philanthropy as its currency: it would be based on the principle that those who have gained greatly from this state’s liberal fiscal regime would be willing to give greatly back to local and national causes. Through following the terms of such a contract, donors would help to steer society away from an increasingly inequitable route, where Britain’s wealthy elite stand to grow ever more distant from the concerns of the rest of their compatriots.
Philanthropy, at its most effective, works to create opportunities for those from disadvantaged backgrounds; to create a virtuous cycle whereby individuals, having been shown the tools of self-sufficiency, will benefit their nation in turn. For this reason, now that the new social contract has been offered, there should be no hesitation in signing it.
Dr. Salvatore LaSpada
Chief Executive
June 2007