Tim Worstall

Changing Charity Law

Err, no, is the answer here:

If he really is serious, he should take a few minutes out of his hectic premiership preparations to read a new report published
today. Authored by a group of lawyers headed by stalwart human rights
advocate, Helena Kennedy, and representatives from across the voluntary
sector, it is a savage indictment of a political climate content to
restrict the freedom of charities to campaign on issues regarded as
even remotely "political".

The report lambasts government for ignoring calls for charity law to be revised so that say, if a group like Make Poverty History
wants to spend most of its time campaigning to do just that it actually
can rather than, as is currently the case, run the risk of prosecution.
At present, charities can only campaign for "political" objectives if
it is a small proportion of their overall activity. Not good if the
primary point of the organisation is to campaign on issues that could
be interpreted as "political".

You are (rightly) entirely at liberty to form a group, spend your and their money, collect more from those who agree with you, in order to campaign for other people’s tax money to be spent in the manner that you and not they prefer.

It’s a combination of free speech and the freedom of association, two of the vital liberties of any civilized State.

But demanding that you get a tax break as you do so is going a little too far, don’t you think? Insisting that you get other people’s tax money in order that you may argue about how to spend other people’s tax money?

Err, no.

Goodbye.

Next question please?

In

12 responses

  1. Mark Wadsworth Avatar
    Mark Wadsworth

    Completely agree, where I see the problem is that no politician is brave enough to stand up and call for an end for tax breaks to charities.
    Which is strange really, because by definition, most of the extra tax we pay that goes towards charities goes, ends up going to charities with which we 100% full-on disagree.
    So ending charity tax breaks is really something that EVERYBODY would favour, instead of all this crapola about the “voluntary sector”…

    Reply
  2. Unity Avatar
    Unity

    Actually Tim, the whole article is a nonsense.
    The constraint on charities is that they have to be non-partisan and campaign on the basis of well-founded research – as long as they stick to that the campaigning falls well within the scope of of the public education and (new) citzenship heads of charity.
    The real issue here is that of some of the major national charities – like the NSPCC, for one – are increasingly ditching their old service-based ethos, which is low-key, expensive, labour intensive, and doesn’t pay well these days, in favour of becoming campaigning organisations where their high public profile makes it easier to justify the payment of large salaries to upper management.
    Mick:
    Tax breaks for charities are a swings and roundabouts thing – they get exemption from corporation tax but are far more constrained that businesses in terms of things like reclaiming VAT, so its not entirely a free lunch.
    The fact of the matter is that removing the tax exemption for charities would have only marginal impact on the big national players like the Oxfam’s and NSPCC’s of this world – they’d just ask for six quid a month instead of a fiver in their TV advertising – but it would seriously fuck over many of the middle ranking local charities that still do actual work on the ground.
    Removing the tax exemption might make the marketing department at Oxfam work a bit harder, but it also stands a fair chance of closing your local hospice.
    One of the major problems with charity policy in general is that most of it stems from a cosy bit of quid pro quo between the politicos and the big NGO’s and has fuck all to do with the vast majority of local charities who do provide local services and do a lot of good work that you probably would agree with.

    Reply
  3. Mark Wadsworth Avatar
    Mark Wadsworth

    Unity, fair-ish points, but you overlooked the 22/78 gross up on Gift Aid payments, which I think is the big one.
    (Your local hospice doesn’t make a profit so wouldn’t have to pay corp tax anyway, the VAT-breaks for charities are worth next-to-nothing and the local hospice is engaged in exempt services so can’t reclaim anyway.)
    OK, perhaps charities should include on every advert or notice, not just its Charity Number and Registered Office but also the fraction of its income it spends on DOING stuff (other than campaigning), a bit like cigarette boxes saying how much tar and nicotine is in them (tar = bad, nicotine = good).
    Your local hospice might score 90%, campaigning organisations might score 10% or even 0%.

    Reply
  4. Kay Tie Avatar
    Kay Tie

    “Insisting that you get other people’s tax money”
    Eh? A charity gets money from donors, not from “tax money”, the important point being that the source of the donation hasn’t been pilfered by Mr. Brown on the way. How this equates to “other people’s” money is beyond me.

    Reply
  5. Kay Tie Avatar
    Kay Tie

    “also the fraction of its income it spends on DOING stuff (other than campaigning)”
    This is usually easy to find in the annual report of the charity. OK, it would be nicer to have a “key stats” panel like the nutritional information on food.
    It is a key factor I look at when selecting a charity. Another factor is if the charity gets involved in silly political shit (I’m talking about you, Oxfam, for your bullshit campaign bullying Starbucks).

    Reply
  6. Mark Wadsworth Avatar
    Mark Wadsworth

    Kay Tie, besides the aforementioned 22/78 Gift Aid tax refund that charities can reclaim, I read somewhere recently that more than half of charities’ income is directly or indirectly from the government, i.e. National Lottery funding and hundreds upon hundreds of schemes and grants and so on.
    But I can’t find a reference right now.
    And I think the point was, charities want to be able to tell the government how to spend other people’s money as much as charities wanting to spend it themselves.

    Reply
  7. Kay Tie Avatar
    Kay Tie

    “the aforementioned 22/78 Gift Aid tax refund”
    That’s just an administrative convenience. I make a declaration that I pay enough tax to cover the Gift Aid reclaim, I don’t bother making the tax reclaim myself, and the paperwork burden is reduced (if I’m a higher rate tax payer, I do make an 18% reclaim). Gift Aid is invalid if the donor has not paid sufficient tax.
    For sure, Government-funded charities are a different kettle of fish. And yes, the Government no doubt funds dubious charities, but on the whole I bet the charities spend the money more wisely than the Government would (you can argue that trade is better than aid, if you like, and I’ll be tempted to largely agree with you).

    Reply
  8. Roger Thornhill Avatar
    Roger Thornhill

    If charities did not get the donation tax-break, then they could be freed from governmnet oversight on what precisely they do.
    However, I think it serves an autocratic, meddling and paranoid Government’s aims to have a beholden, overlooked “voluntary sector” which routinely begs at the Government “high table” for scraps of the food that the Government has already stolen from our plates.
    As for the donations avoiding GB’s sticky fingers, better to reduce the take across the board for us all – then we would have more money to chose how we spennd it on good works. Again, it does not serve the Government’s agenda to have people (gasp!) decide what to do with their OWN money! How shocking! How awful!

    Reply
  9. Mark Wadsworth Avatar
    Mark Wadsworth

    Kay Tie “That’s just an administrative convenience”
    No it’s not, the fact that there is ANY sort of tax break is an outrage (the fact that higher rate taxpayers get an additional 18%, and whether this should be claimed by the charity or by teh donor on his tax return is neither here nor there).
    Don’t see why I should pay extra tax to subsidise the vast majority of charities with which I don’t agree.
    See the ever reliable Roger Thornhill’s post for more on this.

    Reply
  10. Kay Tie Avatar
    Kay Tie

    “Don’t see why I should pay extra tax to subsidise the vast majority of charities with which I don’t agree.”
    And presumably you don’t want to “subsidise” my pension either (ooo, all that money from your pocket to my SIPP), and you must be apoplectic with rage that rich people get EVEN MORE of your money by avoiding paying even higher rates of tax.
    The reality is that you’re not “subsidising” my pension and charities any more than people who downsize and pay less tax are “stealing” from Gordon Brown (although I will admit that Gordon Brown shares your attitude).
    Next time you meet someone that’s been mugged for their phone, but kept their iPod, be sure to tell them that they’ve been subsidised by the victims who’ve been beaten senseless and robbed of everything.

    Reply
  11. Neil Craig Avatar
    Neil Craig

    The problem is not whether to tax charities giving money to the poor/children/one legged donkeys which is charity in the true meaning of the word, but “charities” which spend their money as lobbyists.
    Should we give tax relief to the Murdoch Foundation to campaign for government subsidised digital boxes? Probably not. How about for an organisation that wants government subsidised windmille & wants prominent supporters to be given cushy government quango jobs to make policy. I’m sure Sir Jonathan Porritt is entirely in favour but I am not
    Of course the line is difficult to draw (bishops in the Lords) & by definition the lobbying organisations have more political influence, but special interest lobby groups are the bane of democratic politics & shouldn’t be susbsidised.

    Reply
  12. Kay Tie Avatar
    Kay Tie

    “special interest lobby groups are the bane of democratic politics & shouldn’t be susbsidised.”
    First, can we stop using the word “subsidised” please? It’s a loaded term and doesn’t capture accurately the money flows. Can we all agree on “receive concessions” in lieu?
    Second, I agree. The legislation delegates to the Charities Commission the job of determining whether the charity is indeed one, and there is a prohibition on political “charities”. The law needs proper enforcing and pseudo-charities need to be pruned away (see Guido Fawke’s tireless and entirely valid campaign against the Smith Institute).

    Reply

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