Wealthy people giving money to the less well-off may sound Victorian, but a new generation of business people are supporting good causes in a smart, 21st-century way. And isn't it time we learned to cheer about it?

It's partly a question, says John Caudwell, of what you'd want to see on your tombstone. "Here Lies a Very Successful Businessman," he says. "Doesn't really do it, that, does it? Not quite enough, somehow. You'd want something more."

Not that he's in any way ashamed of being a Very Successful Businessman, which he undeniably is: Caudwell's fortune, amassed largely in various parts of the mobile phone business (he founded Phones4U), is estimated at more than £1.5bn.

"No, I feel I've made a big contribution," the 58-year-old says. "I've paid a lot of tax. I've created something like 20,000 jobs. I certainly don't feel guilty." But still, you know, something felt like it was missing.

"Business gives you a massive high," Caudwell says. "Doing a great deal, coming up with an inspirational solution … It's very addictive. But it doesn't last long. In isolation, it's a bit sterile. It doesn't reward the soul."

Caudwell knows, though, an eight-year-old girl who has Type II spinal muscular atrophy. "We've been helping her since she was two," he says. "Mainly special wheelchairs, to keep her spine upright. It's brought her a massive amount of independence. You should see the difference. Now that's a reward. That's a fantastic reward. A totally different reward."

So Caudwell is now giving much of his fortune away. He gives mainly to disabled children through own foundation, Caudwell Children, and others. That's not because he feels he didn't deserve to make a great deal of money ("I worked phenomenally hard, sacrificed what most people call a normal life"), but because he feels lucky to have been born able to.

"I channel my giving to people who weren't born lucky," he says. "I'm a capitalist. I'm not going to feel sympathetic to people leading a life they don't have to lead; who with effort could maybe break out of it. OK, I've made a preposterous amount of money. But I was born with the attributes needed to do it. That's the point."

Nor does Caudwell feel he should have paid more tax, in order – perhaps – to fund a society where such generosity wasn't necessary. "Taxes aren't the way to go," he says. "They'd strangle the economy; you wouldn't create the wealth. And nothing squanders money as well as a government. What we need is to encourage rich people to give."

How do we feel about that? Sceptical, perhaps. We are not, on the whole, very comfortable in Britain, especially on the left, with large-scale giving by extremely wealthy individuals. We haven't been since the torrents of philanthropic Victorian cash that flowed – not always to very great effect – from rich to poor in the 19th century.

Giving in the UK stands at around 1% of GDP, roughly half the US level (though the comparison is skewed by the fact that nearly a third of US giving is to religious organisations). But in the US, philanthropy is institutionalised: wealthy Americans routinely give 3.5% of their investable assets to charity (against 0.5-0.8% for their British counterparts) and have a public "duty" to give.

Here, it has generally been a private affair: not done to blow your own trumpet. "It's cultural," says Beth Breeze of the centre for philanthropy, humanitarianism and social justice at the University of Kent. "The tax differences aren't enormous. Partly, it's because the US is better at asking. But in America, every Harvard graduate thinks: who's going to be the first in my year to have a building named after him? In New York, you haven't made it if you're not on the board of a major arts institution like the Met."

There are big givers in Britain, certainly: the Coutts Million Pound Donor Report identifies 174 donations of £1m or more in 2010, worth £1.3bn. (This was down from £1.6bn in 2006, but since the Sunday Times Rich List reported an 11.5% fall in donations by its major charitable givers last year – coinciding with a 37% fall in their wealth due to the recession – the general view is that philanthropy, under the circumstances, is holding up well.)

But there's another angle to this very British reticence towards philanthropy, says Breeze, and as a left-leaning academic, it annoys her: "It seems to be OK to be a local giver, raise money for charity, give a bit to Comic Relief. But as soon as you add a few zeroes, people start thinking: something's up. What's in it for them?"

So press coverage of big givers – especially the Guardian – can be negative, even snide. There are unspoken inferences and unasked questions, suggests Breeze. "How did these people get their money? Did they really earn it? Did they make it by exploitation? Or in something somehow shabby, like 'the man who introduced shellsuits to Britain', the 'curry king' or 'fake-tan queen'. Should they really have it at all? And this idea that people only really give to look good … Or to somehow 'redeem themselves'."

Which is sad, reckons Breeze, because such attitudes do form "a barrier to giving. People don't want to read that about themselves. And it's strange: we approve of charity, but disapprove of where the money comes from – rich individual donors." Her view is straightforward: "Given we are where we are, do we want to cheer someone who does something to even out inequality, or discourage them?"

13-year-old Beryl and her baby brother Vincent live in Kamagoma in Kenya. Since their mother was widowed they get help from an NGO supported by Ciff, which was set up by a British financier and his wife. Photograph: Tomas Van Houtryve

Merely by talking openly about his giving, then, John Caudwell is something of a novelty. But despite our jaundiced view, things are changing: TV programmes such as Channel 4's The Secret Millionaire have helped, and more multimillion pound donors such as Sir Tom Hunter (Sports Division) and Dame Stephanie "Steve" Shirley (FI Group) are not shy about publicising their philanthropy.

This is a characteristic, say some, of The New Philanthropy, a term that emerged a decade or so ago following the sudden explosion of earnings in the City of London. Breeze dislikes the term new, arguing that philanthropy has always evolved and adapted to suit the age; look back, she says, and you'll find examples thoughout history of all that supposedly defines a New Philanthropist.

But a 21st-century model of philanthropy, new or not, does exist, and several factors lie behind it, says Plum Lomax of New Philanthropy Capital, one of a number of institutions that now offer donors advice on their giving and are themselves part of the contemporary philanthropic scene. "First, the past couple of decades have seen massive wealth creation; there's more money to give, even after the crisis," she says.

"And there's been a shift in the nature of that wealth: 15 years ago, 75% of the Sunday Times Rich List had inherited their wealth, and 25% were self-made. Those figures are now reversed." That has led to more people wanting to give more: surveys in the US show self-made money is three times as likely to be given away as inherited wealth. In the UK, the amount donated by the most generous givers on the Sunday Times Rich List increased tenfold, to £3bn, between 2004 and 2009.

There's something of a recent consensus, too, Lomax says, that for many wealthy individuals, "giving while living" is preferable – and certainly more fun – than endowing foundations in perpetuity. The £15bn Bill & Melinda Gates Foundation, for example, is designed to spend down its capital within 50 years of the death of its last founder.

Similarly, High Net Worth Individuals (as they're known) are increasingly tending, as the billionaire US investor Warren Buffett puts it, to the view that very rich people "should leave their children enough money so that they would feel they could do anything, but not so much that they could do nothing". ("Paris Hilton," says Breeze drily, "has done a great deal for philanthropy in recent years.")

The Impetus Trust’s ‘venture philanthropy’ supports this scheme for young people, InToUniversity. Photograph: Impetus Trust

Government, too, is taking philanthropy more seriously. Last year's budget included measures aimed at building a more philanthropic culture, and a Giving White Paper published in May declared the coalition's intention of making giving both "easier" and "more compelling", to achieve "a step-change in giving".

One concrete move, which comes into effect this April, is the reduction in inheritance tax for people leaving at least 10% of their estate to charity from to 36%, from 40%. Roland Rudd, of the public relations firm Finsbury, has set up Legacy10 to encourage rather more of the population to leave money to charity than the current miserable 7%. "For a wealthy individual, it's not a big ask, for a very real benefit," says Rudd of the initiative, backed by the leaders of the three big political parties and some well-known businessmen.

Taken together, these trends prompt distinctive approaches to giving, Lomax argues. "These people take an informed, planned, precisely targeted and hands-on approach to giving," she says. "They care about maximising the impact their money can achieve. Some will invest substantial sums and take considerable risks on innovative ideas. This is strategic philanthropy."

In fact, New Philanthropists treat their giving exactly as they treat their businesses and investments: their talk is of "rigorous due diligence", "scalability", "return on capital", "leveraging the investment", "accountability to stakeholders", "agreed targets", "excellence in delivery", "accurately measured outcomes".

Some really push the parallels. The Impetus Trust, founded in 2002 by two City financiers with backgrounds in private equity and venture capital, takes the principles of those two sectors and applies them to philanthropy, calling the result "venture philanthropy".

With a mission to "break the cycle of poverty", Impetus provides not just core grants to selected charities in its chosen fields, but follows up with sustained management support and pro bono specialist expertise, says Joanna Walker, a former investment banker and now the trust's director of philanthopy and partnerships.

"It's not about giving just money," Walker says. For every pound of "seed money" it gives, Impetus provides between £3 and £4 of practical support from both its in-house investment managers and external experts.

"It's a powerful model," she says. "People can give more than money; they can give talent and experience. Corporate donors can involve staff. And if you haven't got time for that, you know your money will have a greater impact than on its own."

Few embody the marriage of business and benefaction that characterises New Philanthropy better than famously fierce financier Chris Hohn and his wife, Jamie Cooper-Hohn: he went so far as to set up a hedge fund, The Children's Investment Fund (TCI), in order to give a chunk of its profits to The Children's Investment Fund Foundation (Ciff), which she runs. Since 2006, that chunk has £956m.

"We wanted to publicly make the statement that if you're making these kinds of profits, getting these kinds of management fees, you should be doing more than writing a few cheques," says Cooper-Hohn. Many charities do a lot of work up to the point of making their donation, but Ciff's approach, she says, is "to do as much, if not more, afterwards. It's an evidence-based approach to both the need, and the intervention."

So Ciff is more than merely hands-on. It defines targets rigorously, monitors and evaluates progress early and often, "and changes course, sometimes quite radically, if we're not on target. It's just like a business: constant assessment, constant course correction. Finding the algebraic equation that will get us to where we need to be."

This remains a rarity in the charity sector, Cooper Hohn says: "Management through to success somehow isn't seen as appropriate." And it can take time: "You spend ages researching areas and find they're not right for what you want to achieve – but something else is. So, you want to improve literacy in a developing country, which means improving school attendance. Turns out the cheapest and most effective way to do that is deworming. But for deworming to work, it has to be national. And that takes time, drawing up a national programme with a government. But if you want a quality return, it has to be done."

To meet the needs of the new breed of engaged philanthropist, a clutch of advisory institutions have emerged. The Institute for Philanthropy, headed by Kurt Hoffman, focuses on international donor education and network-building. New Philanthropy Capital helped Lombard Assurance founder John Stone work out what to do with the £100m-plus he wanted to give away. "John and his wife Vanessa weren't particularly issue-focused," says NPC's Lena Baumgartner. "He didn't know what an NGO was. So we drew up a list, and they chose a pilot portfolio of 10 charities. Very different, in water, girls' education, microfinance, in India, Africa, Asia. Over the next three years, they visited them all."

Very quickly, Baumgartner says, a passion evolved, for water and sanitation, "the root of so much". Stone scaled up his giving from £1m a year to £5m and started to focus on those fields. NPC identified three countries – Tanzania, Cambodia, Zambia – where his money would do most good. It analysed organisations able to absorb £1m over three years, and, after more visits from Stone, is now monitoring outcomes.

"It's unashamedly a businesslike approach," says Stone. "NPC works like a stock-market analyst examining and tracking a sector ... I'm certainly trying to run my giving like a business, as far as possible. Some NGO people think we shouldn't, but really every principle is the same, bar the profit principle."

The approach entails identifying promising startups capable of scaling up to become self-sustaining. "That's key to the way I see things," Stone says. "For me, the dream project is one where we become redundant." The Stone Family Foundation has now set up a Water Prize: risk capital for innovative, entrepreneurial, expandable projects in water aid. Stone's philanthropic work is now, he says, "more satisfying and more fun for me than business. It also allows me to add more value. I really feel I'm using my money, my time and my talents well. I've become an evangelist."

Are we right to be sniffy about this? Breeze believes not. "Tax," she says, "is compulsory. There's no joy in paying it. Philanthropy is about: This is my money, I can do what I like with it. It's people with surplus money wanting dreams, visions, opportunities. It's an identity question, what you feel your purpose in life is. And what kind of tax level would we need for there to be no room for extras? Even if the hospital's perfectly equipped, who'll pay to send the clowns into the children's ward? We should be cheering them."