HC 716 Funding of the Voluntary Sector

Written evidence submitted by Barclays (FVS 07)

About Barclays

1. Barclays welcomes the opportunity to submit evidence to the Public Administration Select Committee inquiry on this important issue.

2. With over 300 years of history and expertise in banking, Barclays employs over 147,000 people supporting 48 million customers and clients.

3. Barclays is a major global financial services provider engaged in retail banking, credit cards, corporate and investment banking, and wealth management with an extensive international presence operating in over 50 countries.

Introduction – Barclays approach to citizenship

4. As the Committee considers the philanthropic behaviour of large business organisations, it is important to set this within the context of the wider social contribution of the private sector.

5. We describe the way in which Barclays is able to generate value in the economy and society as ‘Citizenship’. Our contribution to the communities in which we operate is at the very heart of our strategy as an effective financial services provider. (A copy of our recently published ‘Citizenship Summary’ is attached.)

6. For Barclays, Citizenship means understanding the needs of our stakeholders and making decisions – in the short and long term – that will positively impact communities and the environment in which we operate.

7. Central to our vision of Citizenship is running a sound and successful bank. By doing what we do well, we will not only employ a significant number of people, and contribute a significant amount to government revenue (through direct and indirect means), but also help our customers and clients support economic growth.

8. Helping our customers and clients requires the provision of financial solutions that help them build security for their families, live better quality lives, develop and grow businesses that create wealth, jobs, and foster economic development contributing to sustainable growth for the long term. Some highlights include:

· In 2010 Barclays provided £43bn of new lending to UK households and businesses. Across the world we have lent a total of nearly £500bn to customers and clients. We continue to use a prudent approach to lending which carefully considers our customers’ ability to repay their loans.

· We supported 106,000 business start-ups in 2010 which was a 12% increase on 2009 and the largest number since 2003.

· We have committed £1bn over the next four years to improving the customer experience by delivering new technology channels, transparent products and services, and enhancing complaints management processes.

9. We recognise, though, that we must do more than just that. So we put considerable energy, investment and resource into dedicated community investment activities that build on what we do as a bank. The next section outlines our activities in this particular regard in detail.

10. While we are proud of what we have achieved so far, we recognise that there is much more to do, and we are identifying opportunities to strengthen our Citizenship approach. In particular, we are looking at ways in which we can embed and integrate social and environmental considerations into our day-to-day decision making.

11. The remainder of our comments in this submission are focused on the community investment and direct employee participation/giving aspects of our Citizenship agenda. This response outlines some of the ways, with some illustrative data, in which Barclays supports communities through charitable partnerships and giving back time, energy, and resources in order to generate real added value. We also attach the recent Barclays response to the Giving Green Paper issued by the Cabinet Office which addresses many of the issues that we expect will be considered as part of the Committee’s inquiry.

Community investment through partnership

12. Corporate giving is a specific way in which an organisation like Barclays can demonstrate philanthropy. Increasingly, we are encouraging the use of core business skills and expertise, rather than simply donating money, to maximise our social impact. Key stakeholders in the third sector have made it clear that they believe this is how Barclays can make the biggest positive impact on society.

13. Barclays allocated £55.3m in community investment in 2010, a figure which has remained stable throughout the crisis. We provided support for more than 8,000 organisations across 37 countries.

14. As a sector, financial services firms are one of the largest providers of vital cash donations. Employees of the sector are also amongst the most generous with their time (volunteering) and money (payroll giving).

15. In 2010, we facilitated over 5,000 work experience placements for disadvantaged people and provided vocational training, interview skills, and CV workshops for many thousands more. (See below for additional Barclays-specific data.)

16. While it is important that individual companies contribute to society, it is crucial to recognise that impact and effectiveness can be improved if we work in partnership with policymakers, other companies, NGOs, and community based organisations, to ensure that our contribution is focused, scaleable, outcome oriented, and generates positive change.

17. Part of Barclays strategic focus involves working in partnership with others. This is a more effective way to achieve outcomes and Barclays has a number of established relationships with organisations such as Care International, Plan, and Citizens Advice. We develop our programmes in close consultation with external stakeholders to ensure they meet the needs of local communities.

Barclays Money Skills

18. Projects funded through Barclays community investment programme in 2010 reached over one and half million people. with financial capability training alone provided to over half a million people. Through our flagship UK community programme, Barclays Money Skills, we are investing £15m over three years to help one million people build the skills, knowledge and confidence they need to manage their money more effectively.

19. Barclays Money Skills is delivered through partnerships with respected charities including Action for Children, the National Skills Academy for Financial Services and the National Youth Agency. Over 6,000 Barclays employees volunteer their skills and time to help deliver the programme through structured learning events and through the use of toolkits to help people in local communities across the UK.

20. A further example is the Barclays Community Finance Fund, which provides funding grants of up to £50,000 to credit unions and Community Development Finance Institutions (CDFIs). The funding is used to help these organisations up-scale and build capacity to reach more vulnerable people in communities where access to affordable credit is limited.

Project Merlin Agreements

21. Partnership with Government has also been significant. The ‘Merlin’ agreement between the major UK banks (Barclays, HSBC, LBG, RBS, and in the context of lending, Santander) and the UK Government underlined the banks’ recognition of their responsibility to support economic recovery. The banks are working together with the Government, particularly in the areas of lending, tax, and pay, as well as broader contributions to the economy and society. We welcomed the Merlin agreement and remain fully committed to its objectives.

22. As part of the agreement, the relevant banks will "continue to support communities through institution-specific initiatives, through which they currently put over £200 million per annum (in cash or in-kind) to work in the UK. We expect, and intend, to maintain that rate of investment" [1] .

23. In collaboration with the other large UK banks, we will also support the establishment of the Big Society Bank (through aggregate investment of £200m over the next two years) in the UK to act as a sustainable provider of wholesale finance to social investment. It will be crucial to ensure that the Big Society Bank has a clear set of objectives on which to deliver.

Employee participation and direct giving

24. It is important to recognise the importance of personal choice in philanthropy and voluntary giving. Many people’s chosen charities are decided upon for very personal reasons. We recognise this and do not wish to stipulate how much should be given, and by whom. However, we are able to make giving as easy as possible (as with payroll giving – see below), and to incentivise (as with matched fundraising).

25. 2010 was a record year for colleague involvement in Barclays community programmes with 62,118 individual employees participating (2009: 58,415). This represents 39% of all Barclays colleagues contributing through either volunteering, fundraising or regular giving (2009: 36%).

26. A record £21.4m was raised for charity by Barclays colleagues through matched fundraising and payroll giving in 2010, a 9% increase on the total in 2009. This, obviously, does not include any personal donations made by Barclays employees outside of our established programmes.

27. In 2011, we are looking to further increase our colleague involvement and drive skills-based volunteering. This will enable us to leverage our skills and capabilities to contribute more effectively, and directly, to sustainable economic development in our local communities.

Increasing philanthropy and maximising impact

28. We welcome initiatives which encourage greater philanthropy which includes Big Society initiatives from the Coalition Government. We would also welcome greater recognition for the many millions who are already volunteering and giving back through a variety of charitable activities.

29. Barclays already undertakes a number of methods to encourage, increase, and maximise philanthropy amongst employees and clients.

30. We provide employees with the means to engage in voluntary activity and charitable giving, such as by offering time off during the week to get involved in our community programmes; providing financial grants to support employee volunteering efforts; a matched fundraising scheme (raising over £75m in the last 5 years) and facilitating employee giving through matched payroll deductions.

31. At Barclays Wealth Private Bank, we offer a Client Philanthropy Service to engage, educate, and support our high net worth clients in their philanthropic journey. The nature of our clients means that this is a very discreet and confidential area and our advice is based on each client’s need. It would not be appropriate to promote our clients’ philanthropic activities, but it is an important area in which we provide support and expertise.

32. Barclays Wealth recently conducted research to understand how the wealthy react in a recession and how they engage with charities and causes; the evolution of giving and the different types of philanthropists; how charitable giving habits are evolving; and what the cultural barriers and problems are that inhibit giving.   This research i s a ttached to this response , as we thought it might be of use in the Committee’s work.

33. One lesson from the Barclays Wealth research that corroborates our general view is that maximising the impact of philanthropy and community activity is about leveraging skills, resources and capital. We believe that we can make the biggest difference to society when we focus on the areas where we can share our core expertise, which is why we invest in projects that build financial inclusion and financial capability, and support enterprise.

34. It should be noted that London serves as a hub for many of the corporate leaders in the philanthropic space. Progressive companies are able to share, and do share, expertise, disseminate best practice and encourage and stimulate wider corporate involvement. There remains scope for Government and the private sector to work together further to leverage this strength and promote best practice.

35. More generally, and as we noted in our response to the Giving Green Paper, our experience is that a high proportion of charitable giving is done for private reasons and the rationale for it varies widely. One way in which Government could promote philanthropic and charitable behaviour would be through investigating further use of tax incentives and legislation that would make giving and volunteering more attractive.

May 2011