Bogus charities?

There used to be a welcome consensus on charities in the UK. We all knew a charity when we saw one. If you were doing something to further education, or the welfare of animals, or looking after children, you were running a charity and you could claim tax exemptions.

Like much else which was traditional, lightly regulated and worked, this was not good enough for Nulab. Under them they pushed the envelope in two directions. Educational charities were challenged for being elitist, and had to jump through new hoops to keep their tax status. New charities sprang up, which some of you are calling bogus. Some of these new “charities” spend considerable sums on what looks like political campaigning, some through detached political wings and some in other ways.

Clearly there needs to be a new charity settlement which is fair and which works. I would like to hear from you about what types of things should and should not be qualifying activities for charitable status. Please don’t make the editing job too difficult by too many libels against existing institutions, however tempting it may be!


  1. marksany
    March 16, 2009

    Simple; a charity is an organisation that can attract donations from the public concerned about what the charity stands for. If a charity is funded by the government, or by charging for services it provides by its users, then its not a charity. In the first case it is a quango and in the second a business.

    I don’t care what field of human concern constitutes a charity, I just object to paying for one through my taxes. I also object to the government using fake carities for propoganda purposes.

    1. chris southern
      March 16, 2009

      Couldn’t have said better myself 🙂

    2. Blank Xavier
      March 16, 2009

      Actually, it’s worse than a quango.

      A quango is bad, but at least it is what it is – it’s not trying to pretend to be something else. A quango *pretending* to be a charity is simply duplicious. This is from the Government who are now going to track every single damn people coming into and out of this country. Trust them? I don’t and I shouldn’t *need* to anyway.

  2. APL
    March 16, 2009

    JR: “Bogus charities”

    There are thousands of them!

    My idea of a charity, is an organization that receives voluntary contributions from an individual acting on his own behalf. Perhaps that person will offer his time as well.

    What in my opinion a Charity is not, is any organization that takes a cash grant from the government. A charity that does so had become a QUANGO.

    JR: “Clearly there needs to be a new charity settlement ..”


  3. SaltedSlug
    March 16, 2009

    It’s quite simple actually John.
    If you’re receiving more money from the government then you are from private donations: you’re not a charity, you’re a quango.

    1. Blank Xavier
      March 16, 2009


      Furthermore, RNLI have found that taking Government money isn’t worth it – you actually lose more in public donations than you gain from the Government. RNLI tried taking Government money and then stopped, for that reason.

      I think if a charity is primarily funded by Government, it’s decided to give up being funded by the public and that means it’s not a charity any more.

      1. Paul from MK
        March 16, 2009

        I quite agree. If any organization receives money from government then it becomes suspect in my mind.

        Perhaps any organization that has a high “PR” or “administration” cost its budgeting is not a genuine charity.

        I tend to exercise judgment based on yearly reports when making contributions. If a charity requires more than ten per cent to cover overheads, I begin to suspect that there’s some freeloading going on and keep my hands firmly in my pockets.

  4. Pat
    March 16, 2009

    Since giving to the poor, education, healthcare etc. are all paid for out of charitable donations- compulsory ones called taxes- and indeed it is difficult to find an area of need that does not recieve some state funding- why not abolish charitable status entirely. Simple, cheap to administer, and as fair as the government of the day. It also reduces the possibility of taxpayer subsidy to political causes (and there can hardly be a political cause which is not opposed by the majority of the taxpayers bearing in mind that 45% of the electorate is the best that any party has done in recent decades)

  5. AlexM
    March 16, 2009

    Organisations which derive the majority of their funding from the public purse cannot in any way be described as “charities”, although many do have charitable status. At best they are QUANGOs, at worst little more than government spin operations.

    Looking through the accounts of the many “charities” which constantly hector and nanny us about our private behaviour, especially when it relates to drinking/smoking/eating &c., I have yet to find a single one which is not majority funded by government (many derive less than 1% of their funding from charitable donations).

  6. Julan Gall
    March 16, 2009

    Can’t we adopt a very simple principle and require that all charities just be “not for profit”? Then any organisation can be a charity so long as it doesn’t distribute profits either to shareholders, staff or other businesses. All profits should be spent on the aims of the organisation.

    This would allow existing charities, churches, schools and political organisations all to be charities, but why not? There is a common belief that certain activities (e.g. independent schools) are subsidised by the taxpayer, but what exactly are these subsidies? VAT should be decided independently of charitable status. Business rates should be decided based on whether an organisation is a profit-making business. No charities would pay corporation tax because by definition they wouldn’t make net profits. Reporting requirements for large charities are already similar to businesses.

    There would need to be a few safeguards. e.g. Salaries paid not more than a certain percentage of turnover should stop people setting up charities for tax avoidance.

  7. Andrew Duffin
    March 16, 2009

    There seems to be a consensus already!

    I was going to say the same as APL and the Slug.

    It’s simple really:

    People support charities of their own accord.

    Something you are obliged to support through your taxes, enforced by the power of the State, is not a charity.

  8. tbrrob
    March 16, 2009

    Any charity taking money from the state should lose its status as a charity as it is no longer voluntary.


  9. Steve
    March 16, 2009 highlights this scandal rather well, but Main Stream Media are ignoring as usual.

  10. alan jutson
    March 16, 2009

    Interesting Blog topic, but one which many of us who get involved in voluntary charitable work would perhaps like to comment upon.

    It is a fact that the majority of the British people are very generous towards Charites of one sort or another.
    One only has to witness the (very much hyped) giving on Red Nose Day, or see the donations made for Red Poppys for Rememberence Day, visit a local Fair or Fun day organised by those respected Organisation such as Lions, Rotary, Round table and the like to realise that.

    Unfortunately many bogus Charities have also been set up in recent years, with catchy names solely to fleece the general public, in order to fund personal gain for the collectors or organisers. Publicity for such scams (rightly so) in the Newspapers, have had a small, but negative effect on the more genuine organisations.

    At the moment it is not easy to determine what or who are regarded as genuine organisations from those who are not.

    Publicity showing a Registered Charity Number is not proof that the organisation is genuine, as the number could be fake.

    The most simple way is to ask a few questions about the organisation if it is not known to you, which any genuine member/collector should know and be willing to provide.

    How long has the organisation been established, how many members are in your organisation, what exactly is the money being used for, please outline a recent project which you funded, are you being paid (many are), where is your licence to collect money in public, etc.

    Aware that this may take time, and many people may feel that this is perhaps intrusive, but if you do not ask simple questions, then you are giving without knowledge.

    Most voluntary organisations (my own affiliation is to our local Lions Club, Lions international have 1,500,000 members worldwide) is made up of Members who pay for all of their own expenses, do not extract personal rewards in any way, and are more than pleased to answer any question put to them.
    Thus 100% of all money collected is spent on projects to really benefit those in need.

    Unfortunately given that all expenses are paid for by the Membership, it means that for publicity such organisations have to rely upon the generosity of the Local newspapers, shop windows, library notice boards etc and the like to publicise any projects or success stories.

    Charities with massive publicity campaigns, big office and staff overheads can cost a fortune to run, and can reduce the percentage and effectiveness of public donations made to very, very minor levels.

    In short only give to those organisations you know something about, and if possible check out their accounts to see exactly what percentage is actually spent on charitable projects.

    The results may surprise many.

  11. Alfred T Mahan
    March 16, 2009

    I quite agree the whole sector needs a clear-out. The problem is not just political campaigning – it’s the whole structure. There are numerous charities which provide services in the care sector and charge for them which are indistinguishable from private companies except for these important characteristics:

    1 The directors are not held fully to account by the Charities Commissioners, who do not, and cannot be expected to, fulfil the role of shareholders. Consequently standards of performance vary wildly, and some directors are vastly overpaid.

    2 Lower level charity staff are often underpaid on the basis that they’re enriching their souls. This, of course, drags down wages elsewhere (except in the public sector) as private firms cannot otherwise compete on price.

    3 Charities often have access to capital at lower than commercial rates, and of course can supplement their income by begging as well as government hand-outs. This means they undercut commercial competitors, which get crowded out.

    4 Charities claim the moral high ground for doing the same work as others even if the standard is no better.

    There are a number of charities active in services which are really private companies. indeed, if the organisation is not going to develop a substantial asset base, an entrepreneur might be well advised to set up a charity rather than a private company to take advantage of the factors above. He can take out his ‘profits’ as a salary. I am aware of a number of businesses which a suspicious mind might think have been set up in this way.

    APL’s definition is good – but it needs to extended to exclude charities which trade.

  12. Frustrated taxpayer
    March 16, 2009

    I agree with the sentiment of the comments already posted, perhaps the core principles of what constitutes a charity should be:
    (a) it raises funds from donations and in any year is not allowed to receive grants from public bodies where the total of the grants exceed 10% of the odnated funds, [this prevents over-reliance on Government/public sector (including the EU) grants and keeps the charity focussed on its aims]
    (b) it may invest surplus funds each year to support future spending associated with its aims, [this allows for prudent financial management and for building up capital to support projects]
    (c) where a charity invests surplus funds, it must do so in a prudent fashion and the investments should be consistent with the chartity’s aims and objectives, [i.e no more high risk offshore investment]
    (d) it may trade, e.g. run a charity shop, but such trading must operate on normal commercial lines and pay the relevant taxes (e.g. VAT) and business rates, [this prevents unfair competition with other businesses]
    (e) a charity may raise awareness through publicity campaigns, but it may not undertake political activities (e.g. lobbying) or support a political party
    (f) a charity may not have a statutory function or perform statutory duties

    IMO these relatively simple rules would go a long way to stop the dubious pratices that have crept into the charitable sector where some organisations are increasingly becoming an arm of government.

  13. Acorn
    March 16, 2009

    JR; did you realise that this blog site has no educational value!!!

    It’s official see the following

    While reading, have a look at one of its commissioners a Ms Sharmila Nebhrajani; she apparently runs all those (ultimate Quango) BBC web sites that, I assume, also have no educational value.

    Please can you advise us how we get a membership to the “metropolitan elite” so we can get on this Quango / Charity gravy train.

  14. Peter Holttum
    March 16, 2009

    How about this for a Tory idea? Make no changes at all to the laws on charities, which are as old as England. Why do we need to keep legislating? Four classes of charity are hallowed by law. I won’t bore you with the detail. All schools should keep their charitable status – even new ones – it is hallowed by time. If “bogus” charities are supporting political campaigning, then why not. Political activity is a kind of education anyway. Sorry – I don’t understand the issue.

    1. Rob Atkins
      March 16, 2009

      Ok Mr Holttum, I give up; which bogus charity do you work for ?

      1. Peter
        March 16, 2009

        Not very insightful Rob. Maybe better to hold your mouse a bit longer until you have something less glib to contribute. The new Charities Act redefines charities – but much as they were defined in the Elizabethan Act of 1601
        1) Relief of Poverty
        2) Advancement of Education
        3) Advancement of Religion
        4) A number of other broad headings inclusing Culture, Animals, Citizenship etc.

        If there is anything bogus, it is this new Charities Act which was part of New Labour’s attack on whomsoever they perceive as their class enemies. As such Conservatives, of which I am not one, should wise up. This is just one of thousands of new laws of the land – a tsunami of legislation – unleashed by this preposterous government.

        In particular New Labour wish to redefine charity to conform to their own view of it. They want hundreds of years of history to be overturned so that education has a very narrow meaning. Their politically motivated way of interpreting education no longer covers many major, and worthy, and previously charitable institutions.

        If there was widespread abuse of the old system, its due to lack of enforcement. I for one see no reason why charitable status should not be had by groups supporting political parties – provided the contributors are aware of this. Its better than funding through mega rich individuals or through public support by taxation, both of which seem to have the support of all major parties.

    2. Blank Xavier
      March 16, 2009

      The issue is that people are imagining charities exist because there is public support for them and because of that paying attention and giving weight to what a given charity says, when in fact that charity *only* exists because of Government funding and is repeating the Government line.

      The issue isn’t about charities per se – it’s about people being deceived and misled.

  15. David Eyles
    March 16, 2009

    With your stricture about libel firmly in mind, I give three examples of practice in this sector which illustrate my point: The Soil Association, the RSPCA and the RNLI.

    About one third of the Soil Association’s revenue comes from a mix of public sources. This organisation regulates the use of its own logo and organic food production standards. In some cases it may investigate transgressions or claims made about the sale of organic food and pass that information on to Trading Standards for prosecution.

    The RSPCA does not receive funding from government (to my knowledge) but has a very active part in the enforcement of the Animal Welfare Act, to the extent that its powers have been enhanced in recent years. It also had a big part to play in the formulation of the Act.

    The RNLI does not receive funding, neither does it act as a quasi regulatory authority, which both the other two do. Of the three examples, the RNLI is the only one which has remained, in my view, a proper charity, kept the government out of its administration (they learnt this lesson back in the 1890s and have not forgotten it). And all to their considerable credit because they have remained focussed upon their original purpose – that of rescuing shipwrecked mariners.

    Both the first and second instances show what I call “government creep” whereby these organisations are able to use powers granted to them by government to supervise our lives in ways which I think are not appropriate for charitable activity. Their dual functions now dilutes their original purposes and as others on this thread have commented, they have effectively turned themselves into quangos.

    And this is the problem. When this happens, these organisations are not accountable to the electorate or the taxpayer. Quangos are bad enough, as Ed Balls showed all too clearly when he absolved himself of all responsibility over the GCSE marking fiasco. But charities who have acquired powers in this way wind up being completely unaccountable. Which minister is going to take the rap if one of these organisations get out of hand?

    Those organisations which wish to be charities should stay as charities and not be unelected, unaccountable, inaccessible arms of government.

  16. Helene
    March 16, 2009

    Simply put, if the bulk of its funding comes from the government, it is not a charity. There are now far too many such organisations seeking to shape our national agenda in support of what the government wants to happen, and it has damaged the reputation of the charitable sector as a whole.

  17. Freddy
    March 16, 2009

    I always get the impression that the US has a load of different sorts of non-profit organisations, where we only have charities. As a result, we have the single legal entity, the charity, being stretched to fit too many different sorts of roles.

    It seems slightly silly to me that an independent school, for example, should be a charity, but it seems perfectly sensible that it should not be a tax-payer.

    So shouldn’t we create a few more types of non-profit organisation ?

    1. Jonathan
      March 16, 2009

      We have lots of different types of non-profit organisation.

      For example, we have companies limited by guarantee, friendly societies, community interest companies, community amateur sports clubs, members clubs and of course charities.

      If anything, we have too many different types of non-profit organisation.

  18. Lola
    March 16, 2009

    (1) Apply common sense to applications. – yes, yes, I know I know, there’s precious little of it about at the moment, but I know plenty of people who have it. Just ask.
    (2) No direct government money, or money that can be traced through government.
    (3) No government ‘grants’. This just buys more political capital not more charitable work.

  19. Robert
    March 16, 2009

    Thats something the Tories know a lot about, a hell of a lot of people had to live off charities while Thatcher was in power.

  20. Vanessa
    March 16, 2009

    One such bogus “charity” is Common Purpose. It seems to be funded by the EU and extracts money from Local Councils, not a very charitable action. Why it has charitable status no-one knows, it says it trains people beyond authority! charging huge fees but if you look on its accounts these huge fees do not exist. Brian Gerrish on YouTube is quite enlightening.

  21. Neil Craig
    March 16, 2009

    I am concerned about the “charities” which are largely or just substantially funded by government. That an eco organisation gets most of its money from the EU & governments & uses it as a “preferred lobbyist” to agitate for more power for EU regulators has been reported in the media
    Human nature being what it is it is inevitable that government money will tend to go to charities calling for bigger government & that such charities will be under pressure to become moreso.

    A secondary effect is that such charities & indeed even government quangos are currently supplying money to at least 1 of our main parties. I blog about this on
    & will thus refrain from giving names here. I believe this, along with government funding of “science” that produces eco & health scare stories is, a major factor in the pressure for ever more government nannying.

    I would like to see any charity getting more than 10% of its income from the taxpayer, either directly or through quangos or from government purchase of services or publications having to say this on all letterheads/emails etc & not be allowed to campaign for political action. I grant the difficulty in defining such action. I do not object to charities getting government money – they may disburss it more effectively than the DHSS – but the feedback loop of governemt funding its own lobbyists & advertisers is very dangerous. I would also extend this to money from foreign governments & “N”GOs since there is a problem, at least potentially, of the sort of foreign funding of politics that we have done in Yugoslavia, Belarus, Ukraine, Georgia & probably elsewhere.

  22. Malcolm Edward
    March 16, 2009

    There need to be statuary limits on how a charity’s money is used.

    A maximum of 35% of income to be spent on administration and management, fund raising, informing and advertising. (Though they should aim to be much more efficient). The rest of the money must be spent on some constructive activity for the common good or for the benefit of others.

    A maximum of 0.5% of money donated by the public may be used for campaigning (as opposed to informing).
    0% of money donated by government may be used on any form of campaigning or advertising.

    When a charity is fundraising, it must state how much money it receives from government, it must also be able to give a breakdown of where and how previous donations and grants were spent.

    The government must make a clear declaration of what money it has given to charities and for what purpose.
    There also needs to be an independent assessment of what the outcome was.

    Any charity that exceeds the prescribed limits then becomes a non-charitable organisation.

  23. Mark Wadsworth
    March 16, 2009

    Using salted slug’s definition, quangoes registered as charities:

    Addaction, National Drug Prevention Alliance (funded by a US fakecharity, no less), D.A.R.E, The Work Foundation, Brooks, Straight Talking, The National Housing Federation, Shelter, Suzy Lamplugh Trust, The Children’s Society, The Daycare Trust, Friends of the Earth, The British Liver Trust, Alcohol Concern, The Drinkaware Trust, NSPCC, SOLACE, New Economics Foundation, Institute For Public Policy Research, The World Development Movement (EU funded), Warm Front, National Energy Action, National Consumer Council, National Children’s Bureau, Energy Watch, Age Concern (probably), Association for Young People’s Health, Family Planning Association.

    I hope that is helpful.

    1. saltedslug
      March 19, 2009

      Yep, that sounds about right.
      Thanks for that.

  24. J Mitchell
    March 16, 2009

    Isn’t the answer in your second paragraph? “It was lightly regulated and it worked.” Why do we need to reinvent the wheel? Simply go back to what we had before.

  25. Simon
    March 16, 2009

    I agree with much of what has been said already but would add another condition which should be met for charities. That they should under no circumstances control acces to the ghastly state databases. Acces to Contact Point, the new children’s database can be granted by KIDS and Barnardo’s, both “charities” who are in receipt of government funding. Don’t beleive it? Here’s an extract from the Children’s Act 2004 Regulations 2007 No 2182. As you can see, there are also other unaccountable organisations which can grant access.

    Regulation 9(1)(b)

    Persons who may permit access to the database (“national partners”)

    1. KIDS (registered charity number 275936).

    2. Barnardo’s (registered charity number 216250).

    3. The National Society for the Prevention of Cruelty to Children (registered charity number 216401).

    4. NCH (registered charity number 1097940).

    5. Church of England Children’s Society (registered charity number 221124).

    6. The Child Exploitation and Online Protection Centre (an affiliate of the Serious Organised Crime Agency(14)), so far as it is exercising functions in relation to the sexual abuse of children.

    7. The Children and Family Court Advisory and Support Service(15).

    What all that essentially means is that any Tom Dick or Harry can grant access. There is more. “Administrators” in schools can grant access, by which one assumes anyone, as even if they’re only in charge of the broom cupboard they’re an administrator now. I wonder if Ian Huntley was an administrator.

    I think that illustrates well the double problem of fake charities and unaccountable powers granted to such organisations. Then there are ACPO and ACRO which pose a similar problem of unaccountable power being wielded whilst being funded by the taxpayer.

    1. Mark Wadsworth
      March 19, 2009

      Simon, thanks for that.

      We received a detailed letter from our girl’s school saying how gruesome and stupid ContactPoint was, you’ve just made it seem all the more gruesome.

  26. DavidH
    March 16, 2009

    May I also point out the bona fide role of the small charity set up and run with family ie. private money. I am the Trustee of one such. It neither receives nor solicits government ( ie. taxpayers’) funds. It does not seek to raise money from the public. Its trustees receives no remuneration and do not claim expenses of any sort. Thus all the income generated by its ( cautious ) investment strategy is ( less accountancy fees ) available to be distributed to organisations whose work fits the criteria outlined in said charity’s deed of settlement – in this instance matters of conservation and ( though I deplore the misuse of the word ) “heritage”.

    Having said that, I suspect that charities like this are not what the current administration ( and the culture it has spawned ) particularly wants to see. Hence their imposition of an increasingly onerous administrative burden. In effect this squeezes out the smaller charities in favour of the large partially government funded outfits with staff, offices , overheads and all the rest. As the Devil’s Kitchen website demonstrates, in this looking-glass world “fakecharities” are deemed to be the only genuine article.

  27. Monty
    March 16, 2009

    Foreign funding of charities operating inside the UK is another area which ought to be strictly limited.

    Another is when charities donate grants to other groups, especially poltical parties, which are not dedicated to the stated aims of the donor charity.

    Government and party grants to charities should be made illegal.

  28. DiscoveredJoys
    March 16, 2009

    Although I agree that there are many charities which are really ‘stealth lobby groups’ you can’t always use the source of funding as an infallible guideline.

    I can tell you from personal experience that the Leicestershire hospice charity (LOROS) does excellent work for those that need the hospice type of care (patients and their families). Yet I am told that 40% of its funding comes from the local NHS and is spent on the patients. This seems reasonable as otherwise many of the patients would be using NHS services or beds. As an aside – I wish the NHS was as people centred and caring as LOROS.

    Charities that mostly campaign for or against changes in the law seem to me to be doing ‘political’ work and should be treated the same as unions and political parties.

  29. mikestallard
    March 16, 2009

    1. Can anyone give me a list of charities which receive money from the EU? According to Daniel Hannan’s blog some months ago, certain charities were receiving a lot of EU money (thousands of Euros) and then supporting the EU publicity campaign.
    2. The only part of the school system which seems to be working at the moment is where the Labour party sends their children: the public schools, where the fees are about £40,000 a year for boarders and which, I understand from a reliable source, many parents are no longer able to afford. Prep schools are closing by the day. Small public schools are being absorbed fast. I wonder if the Labour people will want to tax themselves by removing charitable status, however?
    3. A lot of historic charities are out of date. We all know that the generosity of a benefactor in, say, 1800 of three shillings is now a farce. The government smells money, however……..Goodnight to historic charities?

  30. adam
    March 16, 2009

    Well it seems Alcohol concern started getting serious political funding ’84, so i don’t think we can blame just New Labour.
    Part of it is thats its trendy at the moment to promote the charity and voluntary sector, so that justifies government support in politicians minds.

  31. ManicBeancounter
    March 16, 2009

    Maybe the requirement should not be a change in the Charity law, but a logo to be displayed alongside their own logo, just as football clubs have logos in their shirts. It might include a number to state the percentage of their income from tax revenue. The BBC could help in this. Just as they warn us certain organisations by saying “The Right wing …..”, maybe they should say “The state-funded charity…..”

    A major objection that I have to these state-funded charities, is that they always campaign for more government action. So when the government pushes for new legislation, there is always a charity that says “A step in the right direction chaps, but it really does not go far enough”. There is thus a counter opinion, that makes the government seem moderate and reasonable, whilst engaging in debate. The other side of the arguement – “This is a ridiculous bit of legislation, that is to the net detriment of society as a whole” is not heard.

  32. Mike Wilson
    March 16, 2009

    I am concerned by the amount of lobbying power of many charities. I like birds. I, generally, support the work of the RNIB. I don’t like the idea of the habitats of birds being destroyed by pesticides, for example.

    I like the idea of a Severn barrage. If one barrage can supply 5% of our energy needs on a renewable basis I say ‘let’s have it and the birds will have to find somewhere else to nest’.

    But organisations like the RNIB and Friends of the Earth have far too much influence. I hate the idea of nuclear power – but I don’t want to shiver in the winter and I don’t want men to have to risk their lives in mines so I can heat my house. So, as the lesser of two evils, let’s build a few nuclear power stations.

  33. Derek W. Buxton
    March 17, 2009

    If it takes the governments shilling, it is not a charity. In the same way, I do not like companies telling me that a percentage of what I pay them goes to a charity, never a named of course. The other consideration is that if it pays the government money for access and action of some kind, ie RSPCA, it no longer qualifies as a charity.

    Basically, it comes down to the fact that charity involves volunteering money on a personal basis, force instantley takes away any charitable function.


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