Should the City give more to charity?

On the day that Goldman Sachs revealed a compensation pot estimated at £10 billion, resulting in bonus payouts in London to some employees of £5 million-plus, with chairman Lloyd Blankfein in line for £35 million, a panel drawn from the City and the charity sector assembled at the Tate Modern to discuss what is clearly a burning issue.

Financier John Studzinski, who is donating £5 million of his own money to the Tate Modern's new extension, was joined by Arki Busson, hedge fund operatorand founder of the Ark children's charity (his annual dinner earlier this year raised a world record £28 million) and Lord Griffiths (vice-chairman of Goldman Sachs International, former head of the Downing Street Policy Unit and a firm believer that business must do more to help others).

They were, pointed out fellow panellist, columnist and author Will Self, to ironic cheers, "the good guys". Self said that while he was impressed by their own personal contributions nothing could detract from the paucity of City giving.

The figures make grim reading. This year, according to the Centre for Economics and Business Research, the City will receive £7.4 billion in payouts. But total charitable income in the UK has barely shifted, in real terms, in the last 10 years while, based on the Sunday Times Rich List, the wealth of the richest 1,000 people in the country has trebled.

Each year, charities take in around £41 billion - of which £13 billion comes from the public, companies and trusts. Of that figure, £8.9 billion is from individuals and companies. That equates to just 0.76 per cent of GDP.

When I examined the accounts of some of the City's best-known names, I found that Goldman Sachs International donates just 0.32 per cent of its pre-tax profits to charity; Schroders, 0.21 per cent; Merrill Lynch Europe, 0.19 per cent and Morgan Stanley International, 0.17 per cent. Not all firms give so little. RAB Capital, the hedge fund manager, hands over 4.77 per cent and Icap, the interdealer broker, 2.82 per cent.

As was mentioned from the audience, Icap, headed by Michael Spencer, was yesterday holding its annual charity day when all proceeds from its trading go to charity. Last year's day raised more than £7 million.

Someone who knows all too well the difficulty of extracting cash from the City - as she made plain - is the redoubtable Camila Batmanghelidjh, founder of the charity Kids Company, which helps 12,000 children across London with behavioural problems due to neglect and abuse.

To loud applause, she painted a depressing picture of City tokenism, of firms foisting young employees on charities because they thought it a good thing to do - when their actual interest in the cause and their ability to make a difference was minimal.

The cultural divide between the City and the voluntary sector was clear. Modern philanthropists are not prepared to hand over their money without some knowledge of where it is going and what sort of return it will yield.

A noisy intervention from three people over Ark's plan to establish a City academy in Brent highlighted the issue. While it was difficult to assess what exactly the triowere demanding, Busson was happy to explain how Ark, which he runs with other leading City figures, doesn't want to take over schools but will work with teachers and give them the tools to perform.

Studzinksi wished people would regard a donation not as a gift but as an "investment". That was the language the City understood. To applause, he expressed regret there were too many charities, often in overlapping areas. There was he said, a case for some City-style mergers and acquisitions consolidation.

As one observer said, it was inconceivable that 20 years ago, the subject of the City giving to good causes would even be the subject of discussion - that, at least, was a measure of some sort of progress.

Click here to read what our panel said

And click here to watch video highlights of the debate

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