With Christmas coming up, we are inundated with Christmas Charity Appeals whether it be on our televisions, radio stations or in our papers. We might reasonably presume therefore, in these times of penny pinching, that private donations have declined over the last couple of years leading to a necessity for greater campaigning. In fact an extra 1.1 million people gave donations in the period to April 2010/11, an increase of 2% of UK adults compared to the year before. Despite the credit crunch there was still £11bn given to charity in the year 2010/11, the same, in fact, as the previous year.
Rising general costs and cuts in government grants and contracts have hit charities leaving them worse off than before. In the 2010 Spending Review George Osborne announced an average 7.1% annual fall in the budgets of local governments, a cut which in turn has led to a reduction in the provision of grants to the third sector.
There are two points here. The first is given rising costs (utilities, travel, etc) and increased need for their services, none of the charities can avoid the impact of the recession. On the other hand the effect of a recession on charities has been compounded by government budget cuts which have left less tax payers’ money reaching the charity sector. Charities services are more in need than ever and they are getting less taxpayers money to do them. If Charities had been less government dependent in the past year and relied on private donations they would have found themselves in a less parlous position.
Might this be the right time to take a radical look at the funding and independence of Charities and review Charities’ dependence on the State. Should we have a diverse and innovative independent Charity sector where social responsibility can replace State control; a sector relying on the consistent generosity of the British public, even in tough times, and one well placed to avoid the detrimental impact of a swollen public sector which is responding to an enormous quantity of demands spread across vast areas of responsibility?
If therefore we propose an independent Charity sector funded directly by us, we would want this reflected in our tax contribution. In the US, low taxes fuel the most philanthropic country in the world. Some recognition of and incentivisation from our Government reflecting the publics’ role as ‘funders of the third sector’ would seem appropriate. We’d probably throw in an extra pound or two if we could not only see the positive effect our donations are having on efficient, accountable, independent Charities but also if we feel our Government recognises and is willing to incentivise our donor role.
Every penny should count in these difficult times. Using the government as the middle man means much less of our pound is reaching those that need it the most, not just at Christmas but all year round.