Sunday, July 15, 2012

The Great Charity Scam.


Most people when faced with the word charity attached to an institution are inclined to be well disposed to the organisation regardless of what the charity is supposed to do. 

 If it is a popular area of work, such as medical research or the provision of services to disabled children, rationality goes out of the window. 

Hardly anyone questions how the money is spent or how much of it actually goes to the people the charity are supposedly helping.

Even fewer ask where charities get their money from, the public commonly  subscribing to the benign but erroneous assumption that it is collected largely from money put into collecting boxes or donations made by the living or the dead directly to charities.

There is a further commonly believed  fantasy that those collecting for charities are  unpaid volunteers cheerfully giving their time out of  pure altruism, a fantasy which quite incredibly often extends to  that  persistent nuisance known as  “chuggers”  who aggressively buttonhole people in the street.

The truth is a great deal more complex and murkier than the general public imagines. 

The most dramatic subversion of charities comes in the form of national and local governments directing taxpayers’ money to charities to perform work which would otherwise be undertaken either directly by the public body or through the employment of a private enterprise contractor. 

The charities who accept  public money – and the vast majority of the larger ones do – become no more than subcontractors  to  government.

The extent of  public funding is massive:  In 2010 the Charities Commission (which oversees charities in England and Wales) concluded  “that almost a quarter of the large charities consider public sector funding to be their most important source of income.


 In February 2010 ‘ Cardiff University’s school of social sciences on behalf of the public services union Unison predicted that many charities will go bust” [because of coalition cuts in funding]’ and concluded  that ‘More than half of charities’ income now comes from government contracts to deliver public services.’  (ibid).

The use of charities to provide public services  fits in with the Coalition Government’s  drive to subcontract public provision. This means that all three major British political parties officially support the use of charities as government subcontractors, albeit  half-heartedly by the LibDems. Whoever is in power for the foreseeable future, it is a fair bet that the relationship between charities and the Government will broaden and deepen.

As for fundraising from the public, “chuggers”  are paid, a basic and sometimes  bonuses. 

 They work for fundraising firms who receive payments from a charity for every recruited donor.


Many of the larger charities run regular raffles.

My experience of these is that once a raffle a raffle has been entered  they will not only send  details of all future raffles but in many cases send out second letters urging entry into the raffle if an entry has not been received a few weeks before the closing date. I  have also been positively bombarded with requests, both by letter and email, for  donations not only from charities to which  I have donated , but also from  charities to  which I have never contributed .  

This can only mean charities sell on donors details to other charities and quite probably to private business.

The other prime problem with  charities, even large ones, is the fact that they are often very inefficient.

The poorly run ones spend a great deal on administration. 

They spend inordinate  amounts  on advertising.

They hoard money rather than spend it.

They manage their money poorly.

They fail to modernise their services.

Their accounts are inadequate.

The idea that charities will be more efficient than direct public provision  is simply laughable.

Not only do they suffer from the structural ills of public service they lack any proper  public accountability.

Charities are audited each year, but that audit is much less demanding than the audit required of large public companies.

Moreover, their frequent failure to keep adequate records makes  any audit of the use of public money very difficult.

It would also be a very  expensive job to monitor their spending of public  money more