Bankers coy about charitable side

The Beacon Fellowship Charitable Trust was founded in March last year by David Charters, the author and former managing director at Deutsche Bank. Every year the trust plans to award six prizes to UK-based individuals who have contributed time or money to charity. Nominations for this year's prizes opened last week and will close on July 15.

Charters says bankers are one of the groups targeted for nominations: "There are a lot of people working in the City of London who contribute time or money to charity. This is an opportunity to celebrate that generosity."

There are many charities with close ties to individuals in the financial services sector. Organisations include Absolute Return for Kids (ARK), a foundation offering funding to charitable children's projects; Support and Help in Education (Shine) Trust, which funds educational projects for disadvantaged children; and New Philanthropy Capital, which advises donors how best to target their funds.

Wall Street has set a precedent for charities with financial services connections. Shine is modelled on the Robin Hood Foundation, an educationally focused trust set up by Paul Tudor Jones, a trader at Tudor Investment Corporation. At the Robin Hood Foundation, Shine and ARK, banking trustees pay all administrative costs so that money donated goes entirely to good causes.

It is no coincidence that many charities with financial services connections are focused on investing funds and measuring the outcome, instead of actual project implementation.

Emily Stonor, joint founder and chief executive of the Beacon Fellowship, conducted research into the philanthropic activities of the financial services sector. She says interviews with 20 City figures revealed that people were more comfortable donating money when they were able to track whether their contributions were effective.

Charities with financial services links are aware of the need for concrete results. Gavin Boyle, chairman of Shine and a partner at Tudor Proprietary Trading, says the trust aims to apply the City's rigorous standards of assessment to investments in the charities sector: "We say to our donor base that we will only invest in the most effective projects. It is important that we are offering real leverage and real and measurable outcomes."

With bonuses low and bankers counting the pennies, spending donations effectively is all the more important. But the downturn has not been all bad for charities. Faced with the bear market, many who made their fortunes during the 1990s have gone into retirement.

Peter Wheeler, a trustee at New Philanthropy Capital and former partner at Goldman Sachs, says bankers now devote time as well as money to good causes. "Ten years ago people were not as well off as they have since become, and their time was fully absorbed pursuing their careers.

"More and more bankers in their 40s who have reaped the rewards of the last decade are now devoting themselves to philanthropic pursuits."

Wheeler says: "The main advantages that bankers have are wealth and an instinctive thoughtfulness and rigour about how that wealth is applied."

Tom Hughes-Hallett, chief executive of Marie Curie Cancer Care, was part of the exodus. A former director of Fleming Asset Management, He left the industry in 2000, when Fleming was sold to Chase Manhattan. He says the merger gave him the financial freedom to contemplate a career outside: "I was already chairing two charities. When the position at Marie Curie became available, I was in a position to take it."

He says banking is good preparation for working in the charitable sector: "People from the City have good marketing skills and the requisite courage to convince donors to invest." Nevertheless, he says bankers also need a healthy dose of modesty: "Charities are just as competitive as anywhere else."

Ultimately, however, it is their money rather than their business skills that makes bankers valuable assets for a charity. For this reason, attempts to celebrate the philanthropic activities of financiers risk meeting with reticence in some quarters. City figures are notoriously hesitant about drawing public attention to their wealth. Coupled with British reserve about self-publicity, this could reduce the flow of financial nominees for Beacon Fellowships.

Charters acknowledges the obstacles. He says the tradition of celebrating charitable giving is better established in the US, where prizes such as the Carnegie Corporation's medals of philanthropy are awarded to individuals who have used private wealth for public good.

Nominees may come forward to encourage others to support charities. Hughes-Hallett says: "The Beacon prize will raise the profile of City people who have given their time and money."

But potential prize winners may take some convincing. One says: "There are three types of philanthropists: those who are so discreet you would not know they existed; those who allow publicity because they want to set an example; and those who court publicity out of pure vanity. For fear of appearing to fall into the latter group, most people prefer to stay anonymous."

For Beacon nominations see www.beaconfellowship.org.uk