The government today announces new ways to encourage charitable giving. Part of its Big Society message is to promote more generosity by individuals and companies.
The trouble is the past government did so much to nationalise good causes and charitable activity. With marginal tax rates of 52% on the high paid, a growing Overseas Aid budget, a strictly bureaucratic and highly regulated charitable sector and a media based rather than a good works based culture in some charitable fields there is a lot to change if the government is serious about wishing to transfer more of this work from public sector to charities.
If the government wants instead the extra charitable giving to be on top of the higher taxes and expanded public sector it will find that difficult to achieve at a time of squeezed living standards.
December 29, 2010
I am bridling at the impudence of the government telling us how we should spend the money you deign to let us keep (I made this point on another thread before this post was up) when you are spending 53% of GDP, a lot of it on ‘services’ none of us want or need. You now have the cheek to tell us it’s not enough and we should be giving more to charity!
A lot of us already do give to charity, both in time and money, we don’t need nanny to tell us what we should and shouldn’t be doing, thank you very much.
If the government really believes in charity, I mean really believes that charities can perform a function in place of the state, let us donate 10% of our gross income to charity and write it off against our tax bill. Let’s see government taking the lead on this.
This government needs to get a grip, and quickly, they’re becoming a laughing stock.
December 29, 2010
norman: “You now have the cheek to tell us it’s not enough and we should be giving more to charity!”
Of course, if the government didn’t take 53% of GDP, there might be quite a bit more avaliable for voluntary donations to charities.
norman: “This government needs to get a grip, and quickly, they’re becoming a laughing stock.”
Yes. Their only merit is they are not Labour. But with the Lib Dumbs in government too, the difference is so small as to be almost imperceptable.
December 29, 2010
The prospect of the government telling businesses to alter their systems to allow charitable payments to be made when purchases are made or money withdrawn doesn’t fill me with delight. How is this going to work exactly? Is every shopkeeper going to be required to display promotional material by their tills to encourage people to use this scheme? What if nobody does? How much money will have been wasted? I thought we wanted to get the state out of our lives, not make it more pervasive.
According to the Independent this morning, the scheme will also include:
* Establishing an eBay-style volunteering site where people can both get help and offer their time for free.
* Create the UK’s first charity shopping search engine. The site will collect the fees paid by online retailers for referrals to their websites and donate these to a charity chosen by the user.
Why on earth does it need the government to do this (especially in the age of the Big Society)? Charities should get together and set up their own schemes, which are likely to work better than something designed by the government at a cost of millions. What stops volunteering is intrusive CRB checks, not lack of a web site.
The more you look at this, the more it looks completely half-baked, with little thought having been given to the practicalities.
Also, who will decide which charities will benefit and in what proportion? Are we going to have another Lottery-style quango to administer it all?
If the government wants to encourage giving, it should abolish the Gordon Brown scheme where every heritage site etc. that you visit needs you to give your name and address so that they can count the cost as gift aid. Just give them, say, 80% of the tax back on the assumption that on average that’s how many of their visitors are taxpayers. Simplify, don’t complicate.
December 29, 2010
Agreed. Plus they have created so many problems through low interest rates, false job creation and immigration they need to expand Government.
Low interest rates have created over priced housing and cause young people to not afford housing. House prices will fall. Cheap credit will end and will end in tears.
Immigration has created low paid workers who have become a net drain on other tax payers. They have taken jobs from Graduates who now can’t afford to pay for their Univetsity debts and housing. Surely immigration means running down the education sector.
December 29, 2010
I’m forced to spend 52% on Charity that’s ineffective.
No more money on charitable giving as a consequence.
What’s going to happen about those fake charities that exist to siphon off tax payer’s cash?
December 29, 2010
Mr. Redwood, We will have to wait and see what improvement these changes make but they are a start. What does need attention but I dont mean by legislation is the amounts executives in the largest charities take in pay and other benefits. As a director of a charity (total remuneration incl. travel £2,700 last year)I take a keen interest in looking at charity accounts and the ‘jobs for the boys’ culture is, in my mind, worse than the city. We have charities paying in excess of the PM’s salary for Chief Exec. status and not so much less for back slapping non exec’s to agree to everything the CE says. In a ‘real’ business the shareholders would eventually decide on such matters but with a charity there are no ahareholders or members to call the board to account. Charities of all description have as a general rule seen legacy income as one, if not the, largest source of income. Since about 2007 this has been in decline for almost all charities for reasons not 100% clear so any steps to improve charity income must be welcome.
December 29, 2010
Geoff
Like you I also belong to a Charitable organisation(our local Lions Club) it is a completely voluntary organisation where people give what time they have, or wish, to give service to the Local Community. All Members pay their own expenses including the Clubs administration costs (which are kept to an absolute minimum) so 100% of any money raised, or donations given goes into our Charity Account, to be spent for the benefit of those really in need (each case being first verified by a Club member, who will visit the proposed recipient, person or organisation, and then report back for a Club decision).
Many local organisations, Rotary, Round Table, Inner Wheel, and the like also operate in a similar way.
It seems to me but a simple task to define a proper Charitable organisation.
It simply is an organisation which pays no salaries to anyone.
I can understand certain expenses being incurred and paid for if extensive travel is required, as part of a persons function, but other than that, as soon as salaries start being part of the equation, then it really is a trading business.
A real Charity is certainly not an organisation which has any sort of Government funding.
If Governments want to help real charities, then only non salary paying organisations should be listed by the Charity Commision (accounts submitted every year).
Such Bona fide Charities should be excluded from having to pay Tax on interest on monies held in Bank Accounts.
Services and goods provided by Bona Fide Charities to recipients should be VAT free (Zero Rated).
Over the past 30 years our Club has raised over £600,000 which has all been spent on the local Community, helping to fund kids activities, (purchasing equipment), help for the disabled and infirm, and belive it or not, some help for a few who have fallen through the net of local Authority or Government support.
As a Club we have paid Tax on interest on Bank accounts, Vat on Equipment, etc, this seems very wrong when the Members pay for their own and the Clubs expenses, and give of their time for free.
The BIG SOCIETY exists already, Government actions rules and regulations will eventually kill off what little is left.
If Government knew best, then there would be no need for charitable organisations to exist !!!!!!.
December 29, 2010
Alan, as a former Midlands Lion, (President twice!!)before retiring to Snowdonia I agree 100% with your comments. Lions, Round Table and Rotary to me are ‘proper’ charities very worthwhile in what they do with minimal if any overheads. I think if people knew how easy it is to search the accounts of big (and small) charities and see the monies paid out in salaries etc. to senior management like me they would think twice before supporting them when they saw the excess’s some are involved with.
December 29, 2010
Many charities do little real good and spend most of their money on adverts to raise more, self publicising themselves, on administration jobs, exaggerating the problems they claim to address or pushing politically for more government action. If tax relief is to be given I would restrict it to charities giving medical and food aid to people in real need and some medical research and ones with low administration costs and actual results. Not animal charities, not political groups, not climate change pressure groups or others with a religious/political agenda.
With taxes at 50% on income plus NI, VAT, Stamp and fuel duty, road tax and the rest do they still expect us to buy a house, feed, heat and cloth ourselves and our children, provide childcare, pay for university, buy a car and fuel to get to and from work/school, provide for a pension and still have much left to give charity? Can these people do any arithmetic?
December 29, 2010
I would however lower general tax rates to compensate for this.
December 29, 2010
Among the few charities I support is one that re-homes dogs of the breed we own. Some of the animals need new homes because their owners are no longer able to look after them due to divorce or illness or death (in one case the owner was murdered); some because they have been mistreated. The arrangements to transport the animals and look after them while new homes are found, and the matching of animals with suitable homes are all activities that have costs – petrol, vet and food bills – even though the human element is entirely voluntary. If you attend a fund raising rally and meet some of the happy new owners and their dogs, and read or hear their stories, you will realise that this is very worthwhile for owners and dogs alike. There are of course no government donations to the charity: it relies entirely on a simple website and word of mouth for publicity. You really have to be extremely heartless to consider that such activity is not worthy of charitable status.
December 29, 2010
Good on you Mark, 50% of our will’s goes to Dogs Trust the source of our 19 and 17 year old mongrel oldies acquired after 30 years of holding three brood bitches (not the same three!) for Guide Dogs for The Blind.
December 29, 2010
A big problem we have in this country is that people aren’t prepared/able to give time.
They’re very good at writing a cheque to Comic Relief or Children in Need – but try getting volunteers to run clubs, visit old people etc.
The impression given is very much that ‘charity’ is work done by professionals and that once your cheque is posted that there’s nothing else to do.
December 29, 2010
Agreed.
Further the suggestion that credit card payment systems should be adapted to facilitate the extraction of “donations” is offensive.
December 29, 2010
Unburdened by knowledge, I have the impression that charities and the Charity Commission have become something between nationalised and politicised. Section 3 of the Charities Act 2006 (on public benefit) effectively defined a charity as whatever the Commission or governemnt want it to be.
There is a long standing and notorious difference between the US and this country in relation to the whole approach to charitable giving. They are much more ready to give. American Universities are a testament to something the Americans get spectacularly right. I suspect we could learn a trick or two from them.
December 29, 2010
I also think that the Labour Government has done serious damage to the credibility of charities.
It has now become OK to salve one’s guilt about people who are given titles such as the “deserving poor” to give some of their income to “charities”, and not give a second look
The reason that these charities need the money is because they have to pay people to work within those charities…and those people within those charities have to prove via the discredited Disclosure proceedures that they are not paedophiles etc (an indirect tax on charities)
What some local charities need is “time” from volunteers, and my only fear about the “Big Society” is that the organisations best set up to benefit from this are the religious groups which might further alienate other people who wish to give of their time without the overtones of preaching.
It costs nothing for me to clear the paths of my elderly neighbours, to facilitate them being able to get out of their homes, and check that they are OK…but it would cost the community condiserably more if these services were left to the dispassionate means testing of the local council
Likewise it costs very little for me to clear the path outside my house to prevent slips etc, but it would cost the country vast amounts if individuals needed emergency help after falling on uncleared areas (it would be nice if the council actively encouraged community gritting of residential areas)
December 29, 2010
What I have read so far about the proposals gives me concern that those who already donate to charity by standing order, payroll donation, or regular contributions by other means will be stigmatised and discouraged by the new arrangements.
When the Government becomes involved in compulsory charitable giving it becomes something else entirely. (Read the history of the Nazi People’s Welfare Association and related charities).
Developing a culture of giving and facilitating transaction mechanisms for voluntary giving is fine, but someone needs to work out where the lines should be drawn.
There should be no stigmatisation for those who do not give by means of new Government schemes, (because to do so would prejudice present charitable income), and there should be no compulsion in any shape or form.
December 29, 2010
Years ago I discovered just how much of charitable donations reached their destinations. Most money is swallowed up in admin and huge salaries for the charities directors etc. Since then I have never given to any charity, and I must say I don’t feel in the least bit mean.
December 29, 2010
This initiative is insulting at best, and deeply offensive at worst. Many of us donate to specific organisations, such as the RNLI, or Tenovus, and do not wish to see our charitable contributions disappearing into some ill-defined pot of charities (e.g. the Luton Town Haven for Homeless Suicide Bombers, or the Legal Aid Fund for Asylum Seekers perhaps 🙂 ). And what about tax relief on the contributions? At present you can get that on certain contributions by simply filling in the appropriate form, which makes it worthwhile giving a substantial amount. That advantage will be lost under this new idea – or is it one of Nick Clegg’s brainwaves, as filling in aforesaid form would be tax avoidance which appears tantamount to child molestation in his view? Really, is this a joined-up Coalition?
Oh, and I had to laugh out loud, I am afraid, at the idea that giving a few grand in this way might be recognised by – whoopee! – a letter from a minister. So some nobody junior second toerag gets his snout out of rooting in the expenses trough for a few seconds to sign a form letter, and people are supposed to be motivated by that? Honestly!
December 29, 2010
Apart from natural disasters government should not involve itself in charitable payments. Instead the taxpayer should match £ for £ private donations to bona fide, well run and low adminstration charities. The current definition of charity appears too generous e.g. how fee paying schools are so classified is beyond me. Government to government so called aid seems more likely to end up in the wrong trousers and the whole surrounding bureaucracy should be done away with.
January 1, 2011
A vast majority of ‘fee paying schools’ began as charitable foundations – so did many universities. So were many hospitals. Just because the State has nationalised schools, universities and hospitals does not make that the correct structure.
December 29, 2010
If the government wants us to take charities seriously, they should start by replacing Suzy Leather with someone who is prepared to identify those charities that are no longer charities but simply lobbying agents for the previous government’s left wing agenda. Funding for such lobbying where it is providing no direct charitable service has been coming increasingly from government coffers, in part because the public recognise that these bodies are no longer charities doing good work, but quangos analysing policy. To support this, the Charities Act 2006 needs to be repealed.
We need to remember that the idea behind Big Society is that charities replace work that has now been contracted to other quango arms of the state in order to reduce government spending. That means that the agenda to persecute charitable schools needs to stop: they already save the state over £5,000 per year per pupil; that regulation that pushes up charitable costs needs to be reined in (e.g. the ridiculous scope of CRB/ISA checks, and health and safety legislation), and so forth.
One key element about charity is that it originated as a function of the church (and mosque). The state has supplanted that role at every opportunity, and not necessarily to advantage. As Archbishop Sentamu (who really should replace Williams as soon as possible) has pointed out, the Church has been doing Big Society for 2000 years. If the state wishes to see charity expand, it must not seek to attack religions when they offer to provide charitable services because it wishes to prescribe that these be provided in accordance with the principles of Gramscian secularism, but rather to accommodate and encourage them.
Again, Dame Suzy is unsuited to usher through the needed changes.
December 29, 2010
I take the view that the government is already contributing to large numbers of charities on my behalf.
I am no longer prepared to give to any charity working abroad, as the government has taken money from me and decided on my behalf where it is needed, although the decisions seem based on political considerations rather than need. Clearly they are better informed about where it is needed than the likes of Oxfam.
Also many charities at home are reliant on government funds; only a few days ago I discovered that I was compulsorily contributing to a charity providing books for children, and no doubt I am, unknowingly, contributing to many others. This obviously includes the of the “fake” charities set up by the previous government to act as pressure groups to make it appear that there is public support for some course of action and which are almost totally funded by taxation. It would be nice to have a list of these charities to which I am donating as it no doubt would give me a nice warm glow inside knowing that I am helping all these good causes.
Once the government stops giving on my behalf (and reduces my tax pro-rata) I will start giving again to charities of my choice, not before.
December 30, 2010
I share your view. The government takes my tax money and spends it on its own so-called charitable quangos and sends chunks of it to other countries such as Pakistan (a country able to afford nuclear weapons in its own right). Much of the overseas ‘aid’ appears to end up in the Swiss bank accounts of bent politicians and the like, to which I object.
No doubt this proposed new scheme will require the government to establish more paid officials to cajole companies and banks to take part (thereby adding to their management costs), monitoring the resulting income, cross-checking with charities their receipts of money and so on i.e. yet another quango.
Charity begins at home and that to me means that I concentrate my charitable efforts, such as they are, in my own village and community where none are paid for their good works and the administrative costs are close to zero.
December 29, 2010
No, No, No, not ever! Too many charities take government money and then lobby that same government for their own agenda, this has to stop. Charitable giving is voluntary and must stay that way, government should keep it’s nose out. I will not give to “professional charities”, they are fake and take money that should go to deserving causes. I seem to recall reading that the NLI once took the government shilling in 1885, and found that for every pound taken they lost £1.40 in charitable giving. They went back to being a proper charity. Maude should perhaps think on these things!
December 29, 2010
And yet Muslim schools manage to work within the Charities Commission (adds an unsubstantiated allegation-ed). It is not the Big Society that needs change, it is the Charities Commission itself and the rules they work by and apply. They seem to be unaccountable now. They allow the change of use of war memorial land in spite of the terms of the trust saying it must remain open in perpetuity and then they refuse reasonable demands elsewhere. They should regulate, not run, charities.
December 29, 2010
Besides decades of socialism, another problem with modern “charity” is that it isn’t charity as we used to know it – something you did in your spare time, unpaid – but a career; and most of the young people who accost one to set up a banker’s order have no understanding of the word.
Never have Eli Kedourie’ s words been truer: The poor are a gold mine.”
December 29, 2010
Very much agree with English Pensioner and Derek Buxton. Many charities receive government and/or EU funds, of which WWF is a major example (is it surprising that they are “global warmists” and keen on trading carbon offsets?). Even Christian Aid receives government money – and also proselytises on AGW.
I only support charities that have no highly paid executives. ZANE (Zimbabwe a National Emergency) has sent a huge amount of money to help poverty stricken/starving Zimbabweans, often by devious but secure routes, yet it rents no offices and has a very small UK staff. To work for ZANE, and others like it (eg Smiletrain) should not be a career ladder.
December 29, 2010
The big problem is so many charities have become political pressure groups. The charity commission should be re-formulated (and its current Labour activist director removed). Its principle task should be to ensure that charities carry out works defined as being charitable under the law, and that they do not engage in political campaining. So all those charities who campaign for e.g. the ‘Robin Hood’ tax, protectionism in international trade etc should lose charitable status, or at least be clearly and publicly marked as political front organisations so donors know to whom their money is really going.
December 29, 2010
Well said Richard. All, so called, charities should publish proper financial accounts like a plc. All sources of income should be disclosed, including any sources that are derived from tax payer funded entities. When a charity is given criminal prosecution powers under legislation; it is a quango not a charity.
December 29, 2010
Charity fundraising is big business more than big society. These people who pester you on the street to sign direct debit mandates don’t do it for free. It’s not just the £2 a month donation they want, it’s your personal details so the fundraising companies can put you on their mailing lists and dialling lists and sort out the high-conversion rate punters to mine over and over again through their mailshots and call centres.
The higher the conversion rate the more profits they can make. These can often be senile and/or lonely old people – the fundraisers don’t mind plundering them month after month one little bit. The more cheques you send off, the more lists you end up on and the more begging letters and phonecalls you receive. Some of the poor dears can end up getting a few dozen a month through their letterbox. For some reason, certain types of consumers feel obliged to keep writing the cheques.
Is letting the bankers in on this little game via the atms and our debit cards really a good idea?
December 29, 2010
What about the less capable folks who also will get caught in this system — how many will feel compelled to ’round up the pound’ at the checkout? And how quickly will that hustle be extended to cash purchases…?
And if people make lot of small purchases in the month, the payments will tot up massively: if granny goes shopping every second day and rounds up, then this is a cool £7 per month on average and £84 per year.
This is not a trivial sum, especially not for pensioners and other low income people, and alas those are often the most generous of all folks.
Charity has degraded to a lower form of beggary and theft 🙁
December 29, 2010
John
On a point of fact marginal rates of income tax and nic for incomes between £100k and £113k in 2010/11 are 61%. For 2011/12 this rate will increase to 62% for a slightly wider income band
Why does Cameron think this is morally justifable and how does this square with the Conservative historic commitment to low taxation ?
What is the logic behind trying to attact business to the UK by lowering corporation tax rates while taxing the people who will manage these businesses at 61% and 62% ?
December 29, 2010
I hate charity. Charity is just a way of the middle classes to avoid tax. I would however subscribe to a charity motorway wife/weather permitting.
December 30, 2010
Can Francis Maude not leave well alone and cease the New Labour addiction to endless silly policies?
It is not as if he hasn’t been seriously charitable at our expense already, promising to maximise civil service redundancy payouts at 12 months salary, and upping it to 15 months during the progress of the Superannuation Bill.
Once it became an Act, earlier this month, he rescinded that section after a new agreement with the rapacious public sector trade unions. This was by means of the Superannuation Act 2010 (Repeal of Limits on Compensation) Order 2010.
The new figure now is 21 months salary.
You could not make it up.
It is weeks not months for statutory redundancy.
December 30, 2010
I wouldn’t wholly blame Francis Maude for this. This wheeze has probably been on the cards for months, dreamt up during a 3am blue sky thinking sofa session then filed away until Christmas, the season of charity and goodwill, to be strategically released to further deconaminate the nasty Party.
Instead it is being ridiculed from the left, centre, and right. No one I have heard talk about this has a good word to say about it.
Quite an achievement.
December 30, 2010
I refuse to have donations forcibly extracted or bullied from me. I am already involved on a charity committee (it’s a small museum) and we have precious little income. We are very grateful for people’s donations to keep the place running and provide local historical education and a small-scale tourist attraction. No-one is paid any salaries yet much personal time and physical labour is given, throughout the year, in all winds and weathers…..and we also have to cope with the admin work, which can be an absolute pain in the rear. We get no subsidies, either from local council or higher-up.
I am fed up being asked to give money to overbloated charities (I wont name them for fear of retribution but you can guess some of them) and the idea of being accosted at the cashpoint or elsewhere is insulting. It is up to people themselves to choose; the giving is then genuine. I’m not a taxpayer….I don’t earn these days…but I will input a little money on occasions when I feel the inner wish. And that is how it should be.
December 30, 2010
Yes. Leaving an envelope in your letterbox and calling back to collect it should be banned. Often the caller is someone you know, which makes the extortion/refusal worse.
December 30, 2010
JR. You have not pointed out that CG tax is now a form of wealth tax. Since the inflation allowance was removed on grounds of over-complication, although this was the easiest ting to work out on the tax form, every year that prices go up 4% as now, and maybe more soon, if any investment keeps pace then savers will pay compound CG tax on it.
I cannot see how, at present, it would be worthwhile investing in non-business assets any more. And, as pensions have been a complete rip off, we may as well just spend what we make and not save for retirement.- Unless of course one is lucky enough to work for a bank or government funded body.
December 30, 2010
Never give your name to chuggers! The Salvation Army seems to be straight and spends at home on people who the social services abandon.
December 30, 2010
Making charitable giving a tax deductable expense would have a huge impact on the willingness of heavily taxed citizens. Far more effective in generating extra giving than the present system of ‘gift aid’.
December 30, 2010
Yes, indeed, denationalise charity, but do the job properly. Does ANY government to government Overseas Aid benefit either donor or receipient?
While we are about it, the National Lottery resulted in a drop in donations to charities by private individuals. Is not the National Lottery a partial nationalisation of charity?
December 31, 2010
The other problem is that when government pays charities a proportion of their income matching their advertising budget it ceases to be an independent charity & become a voice of government. A fakecharity. This applies to almost every charity or NGO whose opinions on the need for bigger government get reported by our BBC “N”GO. Some,(name of a charity removed for legal reasons-ed), have bee so funded from the beginning; some (named) have seen their funding increase over the years.
I regard government control over such nominally independent voices as one of the greatest threats to our freedom. The fact that no part of the media will even allow discussion of it does not persuade me I am wrong.