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Furthermore, as charitable agencies become increasingly accountable to government, they are prone to forfeit their role as critics of government policy. The growth of partnerships has dulled the candour of charitable officials. Some years ago, the Association of Charitable Foundations observed that "in a world where funding comes from service contracts, there is a danger that passion is neutralised, in the interest of financial survival. People do what they are paid to do rather than what they care deeply about doing." A hospital voluntarist put it more succinctly years ago: "No one is rude to his rich uncle."

One of the issues before us is whether charitable campaigners can find a role that is consistent with their traditions of institutional autonomy and personal service? In the late 1970s, about 10 per cent of overall charitable revenue came from government sources. According to a study of the British voluntary sector by Jeremy Kendall, the figure stood at 45 per cent by the beginning of this century, while donations from individuals had declined. In 2010, figures compiled by the NCVO put the overall proportion of state funding at 38 per cent. Presumably this was for a somewhat narrower definition of the voluntary sector than Kendall's. Whatever the percentage, we are dealing with large sums of money, just under £14 billion transferred from the taxpayer in the year 2009/2010.

At present, about 41,000 charities, about a quarter of all registered charities, have a direct financial relationship with the state. Of these, it has been estimated that 27,000 receive more than 75 per cent of their income from government sources. Extracting information on the percentage of government income of individual societies can be difficult. In many annual reports there is a lack of transparency on this issue. Charities are under no legal duty to advise in their accounts how much, if any, of their income in the year is derived from government sources. Still, from available financial records, it is clear that even once fiercely independent institutions receive substantial amounts of their income from government.

For decades, charities have been, as I put it years ago, "swimming into the mouth of Leviathan". Their increased dependence on the state has blurred the boundaries of charitable and government provision, which is further complicated by the many governmental authorities that have set up charities. The balance of power in the voluntary sector has tipped in favour of large, publicly-funded institutions. The 130,000 or so charities that do not receive state support, typically small institutions, rarely have a voice in the media and are largely outside the debate, though they will be influenced by its results. What is the government planning to do for them, apart from offering them contracts and grants?

As charities are brought into the orbit of government, they take on a view of welfare inherited from the state, whose contracts often set their agenda. Once on the payroll of the taxpayer, they have less incentive to raise funds privately. Indeed, many charitable officials think of themselves not as charitable campaigners but as employees of government. Several have admitted as much in my company. The leader of one prominent society told me privately that he thought charity "demeaning". Yet his institution enjoys the tax benefits that charitable status provides.

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Malcolm McLean
November 11th, 2014
2:11 AM
Running a charity is a good middle class route to influence and government funds. There's usually an element of sincere motive, but pretty soon a grant or partnership comes along. That's so important to the charity that retaining this relationship becomes the overriding priority. People running the charity also benefit personally, if not by direct financial compensation, then indirectly by being asked to help formulate government policy, which is flattering, and tends to turn into financial benefit.

Malcolm McLean
November 11th, 2014
2:11 AM
Running a charity is a good middle class route to influence and government funds. There's usually an element of sincere motive, but pretty soon a grant or partnership comes along. That's so important to the charity that retaining this relationship becomes the overriding priority. People running the charity also benefit personally, if not by direct financial compensation, then indirectly by being asked to help formulate government policy, which is flattering, and tends to turn into financial benefit.

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