‘Diaspora philanthropists’ aim to help revival of UK regions
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Victorian industrialists in Britain often focused their charity on the towns and cities where they made their money. The Cadburys in Birmingham, the Lever brothers on the Wirral, and mill owners in Manchester and Leeds all built strong philanthropic ties with their local communities.
And, today, a group of entrepreneurs from the gritty Midlands city of Stoke-on-Trent is reviving this tradition using modern-day methods. The Made in Stoke-on-Trent network is bringing together local universities, football clubs, charities, philanthropists and the city council to harness what they call the “Stoke diaspora” — people who were themselves “made in Stoke” — to invest in the place that made them successful.
They are working on difficult ground. Once famous for its potteries, or ceramics factories, Stoke in recent times has been a byword for high unemployment, low pay, poor health standards and disillusionment with mainstream politics. In the 2000s, it was a stronghold of the far-right British National Party and, in the 2016 Brexit referendum, more than two-thirds of voters backed Leave.
Originally put together by Tristram Hunt when he was a Stoke MP, the charitable project is now championed by philanthropists, notably tech entrepreneur Matthew Bowcock. He co-founded the Beacon Collaborative, which brings together charities and philanthropists. Bowcock was born in Australia, though his family was originally from Stoke, and he returned to the city at the age of 12 and was educated there to degree level. “There are successful people originally from Stoke but now doing incredibly exciting things all over the world, and we’re on a mission to persuade them to bring more of that positive activity back to their home city,” the 65-year-old says.
He studied law at what was then North Staffordshire Polytechnic, now Staffordshire University, although he hated academic work. He joined a computer company as a trainee, then set up a software business in Australia specialising in chip cards, payment systems and cyber security, and later invested in the US and the UK. He merged, floated and sold his businesses, exiting in 2005.
“Since then, I have invested in numerous early-stage companies and sat on the boards of a number of them, mainly in cyber security and privacy,” he says. “I now spend about 70 per cent of my time on charity and philanthropy.” He is committed to persuading other wealthy local people to back Stoke. “We are harnessing the fierce pride and loyalty felt by people born or raised in or somehow connected to this city.”
Unlike, some trailblazing philanthropists, who often highlight their individual contributions, the new Stoke donors are financing projects where private funders are working hand in hand with the city council and community organisations. They are operating in line with the government’s “Levelling Up” agenda, launched in 2019 by former prime minister Boris Johnson, which set out to address regional inequalities across the UK and called for people to “stay local and go far”.
Stoke is among the economic black spots singled out for levelling up. After decades during which workers earned high wages at the local potteries, coal mines and steel plants, it became one of the poorer areas in Britain through successive economic shocks. In the past decade, cuts to local authority budgets and the streamlining of the welfare system have exacerbated the city’s problems.
Stoke-based philanthropists have stepped in to supplement straitened public resources. They include the Coates, one of Britain’s richest families, with a fortune of £8bn from its Bet365 online gambling business. Founded by Denise Coates and her father Peter Coates, Bet365 has been frequently accused by the industry’s critics of promoting gambling without regard to its social consequences. But, through its charitable arm, the Peter Coates Foundation, the family has supported health services and entrepreneurs in Stoke.
Local philanthropists are also active elsewhere in the UK. They include Jonathan Ruffer, a multimillionaire former investment banker, in north-east England, and Andrew Law, a hedge fund chief executive, in Sheffield. Sir Roger De Haan, whose wealth comes from the Saga holiday company, has changed the face of the port of Folkestone after buying its harbour for £11mn in 2004 and rejuvenating it.
“Diaspora philanthropy actually goes back centuries,” says Chris Priestly, a partner at law firm Withers specialising in charity law and philanthropy. “In fact, it was at a peak in the Victorian era.”
Stoke’s best-known entrepreneur was the 18th-century ceramics tycoon Josiah Wedgwood, who built a model village for workers in the Staffordshire potteries, setting an example for the following decades. Elsewhere, industrialists such as the Rowntrees in York and Bradford’s Titus Salt also built homes and community facilities for their employees. However, such philanthropy dropped off after the second world war as the state greatly expanded its welfare role with tax-funded services.
“There’s a longstanding tradition among entrepreneurs who have made money in a certain area to want to give back to that community,” says Priestly. “Today, as there is an enhanced sense of need, we are seeing more wealthy people attempting to improve conditions in the communities where they are from.”
One of the problems for philanthropists is identifying where their money can make the biggest impact. He says the UK Community Foundations, a network of charities based in local communities, can help join the dots between the philanthropist and projects.
But involving donors in core social services can be controversial. “This is a debate over who should be paying for levelling-up projects, with some people questioning whether charitable funds should not be used to fund such things as education and health,” says Priestly. “Where philanthropists can have an impact is by identifying where there is a gap in what’s on offer and complementing that, rather than replacing it. Philanthropic funding . . . can work in a more agile and dynamic way than public funding.”
Zoë Billingham, director of the IPPR North think-tank, says: “Philanthropic funding to support levelling up is welcome, but it does not change the scale of government’s responsibility to people, in health, in education and beyond, to ensure they can live a good life.”
Philanthropists can offer more than funding, though, says James Routledge, founder of Sanctus, a company that provides mental wellbeing services such as coaching. Routledge is working with the Peter Coates Foundation to run courses at Staffordshire University for people wanting to start businesses in the area.
“I didn’t have many business role models growing up in Stoke,” he explains. “I’d grown up in an environment where it was implied that I’d be lucky to get a job and never believed we could all have better. It’s important for young people growing up to have hope and to be inspired to think they can achieve greater things for themselves.”
He points out that, in the past 40 years, the city has been in an economic decline that has affected almost every family, but says change is starting to happen.
Farrah Barber, a 25-year-old who recently joined the Made in Stoke-on-Trent team, agrees. She was the first in her family to go to university and believes in supportive role models to encourage young people to push themselves. “More attention is being paid to the idea of levelling up as there is so much deprivation here. What is really positive is that there are a lot of people who want to help and who are harnessing their own powerful networks to do good.”
Made in Stoke-on-Trent has signed up 180 people with links to the city and has introduced national philanthropy-funded programmes in Stoke, such as First Star Scholars UK, which helps 14-18-year-olds in care or on the edges of care to improve their life chances. One of First Star’s co-founders is Los Angeles-based film producer Peter Samuelson. His films include Foster Boy, starring Matthew Modine, which is based on Samuelson’s work advocating for young people in foster care. He says an overwhelming majority of the thousands of neglected young people in the UK face difficult adult lives. “Only 6 per cent of foster children go to university in the UK,” he says. “The way to [change that] is by surrounding looked-after children with excellence, ambition and high-achieving young people.”
Other people from business are also using networks to effect social change in poor communities. For example, in the seaside resort of Blackpool, John Nickson, former head of fundraising at the Royal Academy and Tate art galleries, is bringing together charitable and public money in a town troubled by high unemployment, low pay and poor educational attainments.
“I became involved because of my family’s links with Blackpool,” says Nickson. “My great uncle led the project to build the [seafront] tower in 1894 and he, together with my great grandpa and other family members, provided the initial capital to build the tower.” Nickson applauds the work of Blackpool council for investing in economic regeneration. “Economic revival is not solely the responsibility of local authorities, philanthropists or social entrepreneurs. It has to be done through a combination of those groups,” he says.
Nickson and Paul Donovan, an investor who until recently headed Arqiva, a telecoms group, have set up a national charity called Our Common Good, which works with the public sector on projects and is now considering ways of contributing to the regeneration of Blackpool. They are co-operating with the Blackpool Pride of Place partnership, which has attracted more than £700mn in government funding, primarily for infrastructure.
Successful charities argue philanthropic support can be more flexible than public funding as it is free of political control, and can be used to secure other finance and to bring in people with skills and influence.
“Private donations are not accountable to the public purse, meaning charities and community organisations can use them for innovative purposes, not just in service provision — innovation which can unlock greater efficiency and effectiveness,” says Bowcock. “For every post-industrial town or deprived community there are successful business leaders who left the area and made a success of their lives. These people should be encouraged to use their skills and their money to help the places they left behind.”
This article is part of FT Wealth, a section providing in-depth coverage of philanthropy, entrepreneurs, family offices, as well as alternative and impact investment