Thursday, March 01, 2007

More On Charities

The Bloke forgot to make some key points...

Last week we blogged the report from the Charities Commission on the growth of government funding for charities. We expressed concern that the massive growth in public funding is turning charities into little more than quangos, snuffing out the very vitality that used to make them so much more effective than government.

Last night The Bloke took part in a discussion on this with Blair Gibbs of the TaxPayers' Alliance, and Nick Seddon of Civitas. You can watch it here.

Nick is an expert in this area. He recently wrote a book detailing how many charities are now so dependent on state funding that they are in reality part of the political process, rather than the independent organisations we imagine (Who Cares? press release here and Guardian article here). He argues this should be made explicit, and proposes a formal distinction between charities that are truly independent (drawing less than 30% of their income from the state), those that are "state funded charities" (30-70%), and those that actually quangos (70%+).

That would make Barnardos (78% state funded, and now run by an ex-civil servant), NCH (88%), and Leonard Cheshire (88%), all quangos.

Why does it matter? Let's just summarise the arguments:
  • Distorts priorities Charities are set up to pursue worthy objectives, which are most unlikely to square with those of our elected politicos. But once they take the Queen's shilling, they have to play the politicos' tune. The Charity Commission survey found that three-quarters of those doing so are put under pressure to do what the politicos want

  • Stifles vitality The closer relationship between charities and the state is still new, and neither side has a clue how to manage it. The inevitable result is that the government bureaucracy's instinct to impose huge new monitoring, reporting, and regulatory burdens runs unchecked. When they examined it, the PAC reckoned that government requires much more information- on for example costs- than they ever demand from private sector counterparties

  • Damages private funding People are already very sceptical about whether their charitable donations actually go to the underlying good cause: a recent MORI poll found that only 10% agree with the statement "when I give money to charity, I feel confident that most of it will go directly to the cause". More state funding is likely to reinforce the view that charities are not in reality what they pretend to be.

As we blogged before, everybody's Big Idea right now is to syndicate public services from the government to the charitable and voluntary sector. But quangoising charities is not going to get us there- it will simply kill the very thing we are trying to grow.

Much MUCH better would be to find ways of using some of the current c£5bn state funding for charities to increase the tax breaks for private charitable giving. The key is to harness private enthusiasm and ideas, not to spend yet more tax pounds through slightly different quangos.

Yes, we understand that Gordo has already done a certain amount in that direction (eg abolishing the limits for Gift Aid). But what about increasing the tax credit for donations to say 50%?

PS As mentioned before on BOM, Mrs T is actively involved in the NSPCC. But the NSPCC has in recent times come under considerable fire for spending money on "political campaigning" (the Full Stop campaign) rather than directly helping abused kids. Nick rehearsed the charges last night, and Tyler made what he considered a valiant defence. What he forgot to mention was that the initial TV ad campaign was largely paid for by Microsoft (who have donated £5.5m since 1994). Yes, maybe the Empire could have been persuaded to fund home visits instead, but come on, get real- they are a commercial organisation, and their shareholders have a right to expect something visible for £5.5m... in this case their logo in the corner of the ads.


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