Big charity stops charity asking big questions

Posted on

Polly Toynbee  was on form yesterday, under the above title:

The big society is a good idea: there is nothing rightwing about little platoons acting locally. The voluntary sector's good impact on state services is incalculable, showing how the old, children, the disabled, mentally ill and the dying should be treated with compassion, creating beacon services for the state to follow. One of the dismal voids in post-communist society was the discovery there was no tradition of charity or volunteering to build on. But, contrary to endless Tory jibes about Labour's "soviet tractor factory target", voluntarism is deep-dyed in Labour's roots.

For all the "broken Britain" breast–beating, we are already quite good at volunteering – 13.5 million people volunteer at least once a month, more than in most equivalent countries. But it doesn't come from nowhere: the £35bn voluntary sector is 40% sustained by state support – more than in most countries – so shrinking the state means shrinking the charitable sector, too. Evidence from this first small sample of ferocious cuts to come warns that charities will take the first and hardest hits.

Charities are an essential buffer between state and market and a beacon for innovation, but the idea that a sector that is just 2.3% of the workforce can replace the welfare state is not so much fanciful as downright dishonest. Whenever you hear talk of the big society, just follow the money.

The reality is charities are seeing their funding slashed by this government.

The media are seeking to suggest billionaires can replace government as funders of this sector. But as a Guardian editorial also noted yesterday:

There are, however, some hard questions too. US business, like UK business, devotes much energy to finding ways of not paying tax. Bloomberg, for example (whose eponymous founder was one of the big names at Wednesday's Giving Pledge launch), reported this summer that the US treasury lost out by $60bn last year through what is called transfer pricing – taking profits where taxes are lowest. This is one of several aspects of income shifting, the report continued, that costs around $120bn a year.

Tax relief on charitable donations in the US is worth $40bn – and even in the UK, where the tradition of philanthropy is much less developed, gift aid on individual donations last year cost the British taxpayer £1bn.

Meanwhile, the good causes favoured by the super-rich tend to be self-serving, at least according to sceptical observers like the former US treasury secretary Robert Reich. Nine of the top 10 recipients of large individual donations are arts foundations and universities. In the UK, the amounts are much smaller but the pattern, according to the Charities Aid Foundation, is the same.

This gives no cause for encouragement as to what will be supported by these people – and rightly suggests that these so called charitable billions actually arise as a result of tax avoidance – for which there is significant evidence.

The reality is that this government is not supporting the charitable sector. It is casting it adrift – and is at the same time seeking to hand power to elite who have no time for tackling the real issues charities have traditionally tackled. I’ll offer one small example of this massive problem. I was talking to a senior employee of a UK aid agency this week, and as he put it (I paraphrase, but I think accurately), “Our donors don’t want us to ask why the poor are poor”. There’s good reason for that. It’s those donors who are making the poor poor, not least by their refusal to pay tax, their tax haven activities and their need to exploit the resources of developing countries at undervalue. And they want this to continue. Their capture of the charitable sector is intended to make sure that abuse of the poor continues.

So much for charity.