Social entrepreneurship institute to open in London

A centre for the study of philanthropy and social entrepreneurship is to open at the London School of Economics with a £30m donation from Paul Marshall, the hedge fund investor.

Despite recent growth in philanthropic activity, there is a sparse formal evidence to demonstrate which strategies for giving are most effective. The Marshall Institute for Philanthropy and Social Entrepreneurship aims to bring together philanthropists, policy makers and researchers to inject "academic rigour" into the subject.

Mr Marshall, co-founder and chief investment officer of Marshall Wace, said teaching was the "primary purpose" of the institute. But it would also produce research, host events and act as an incubator of ideas for social entrepreneurship.

"There has been huge growth in philanthropic giving, in the number of people working in social ventures and the voluntary sector. Yet there's no recognised training," said Mr Marshall, who is also a founding trustee and chairman of Ark Schools, the academies provider.

Philanthropic giving has recovered since the financial crisis, with UK charitable giving reaching £10.4bn in 2012-13, according to the Charities Aid Foundation. The number of £1m-plus donations rose by 50 per cent in 2013 compared with the previous year, a study by Coutts private bank found.

Mr Marshall said the financial crisis had led to a backlash against the wealthy, with rising concern over inequality and rewards for failure. "Inevitably that is going to lead those who are fortunate enough to be wealthy to think more about the stewardship of their wealth and how they help the rest of society."

The institute will be based at a new building on the LSE campus in Holborn on the site of the headquarters of Cancer Research UK.

Two-thirds of Mr Marshall's £30m will go towards building the centre; the rest will fund its operation. Its founders said they expected the institute to be self-funding within five years through its academic programmes, corporate events and other activities.

The Marshall Institute joins a number of existing academic centres focused on philanthropy, including at Stanford and Indiana universities, the Skoll Centre at Oxford's Said Business School and Cass Business School. But Sir Thomas Hughes-Hallett, a City veteran and director of the King's Fund, the healthcare think-tank, who will chair the institute, said it would go beyond these institutions.

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Professor Craig Calhoun, LSE director, said part of the LSE's academic interest lay in understanding how sophisticated ideas in philanthropy and social entrepreneurship were spreading beyond the developed world into countries including India, China and Africa. "It's a matter of understanding one of the most important developments in the way social change is shaped," he said.

London's attractions as a base for the global super-rich as well as its educational and financial status make it an obvious location for a philanthropic centre. But its thriving entrepreneurial culture was another key factor, Prof Calhoun said.

"People intend both to make money and to make the world a better place. Go a mile or so east of here and the ground is thick with entrepreneurs determined to do both at once."

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