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The issue of the generous salaries given to senior administrators in many publicly-funded agencies has aroused a good deal of comment in the press of late. The criticism flows from a misunderstanding. It arises from assuming that CEOs of the publicly-funded institutions are in fact working for voluntary institutions, which is questionable. Their generous pay is perfectly understandable when seen in the context of the pay scales of government bodies, such as NHS Trusts. The directors of independent charities are relatively poorly paid because they often have to raise their own salaries through fund-raising measures.

In the Thatcher years, talented Labour Party supporters, isolated politically, moved into charitable societies. With egalitarian ideals and a background in political lobbying and government service, they do not want to return to a time when voluntary institutions were responsible for essential services. Nor, unlike charitable campaigners of old, do they have the desire to make themselves unnecessary. Talk about the Big Society or rolling back the state makes them nervous. They are content to act as welfare providers dependent on state grants and service contracts, which pays their salaries and keeps them in touch with national policy.

Still, we may be reaching a tipping point, when more and more individuals will assume that charities are essentially governmentfunded and consequently end their contributions. The universities, which are seen to be state institutions, have had this problem for decades. A former CEO of the Countryside Alliance, which raises most of its income from subscriptions, accuses the government of obfuscation: "The laziness of the Treasury in not establishing a proper framework for quasi-government bodies as separate from charities is an insult to the millions of people in this country who give of their time, expertise and money to truly independent voluntary organisations." It is this lack of clarity that has led some critics to call for a new category of non-profit organisation, those that receive substantial funds from statutory sources.

As I suggested  earlier, neither charity nor the government has lived up to public expectations of social provision. The charge once levelled at Victorian charity, that it could not cope with the volume of social need, is now levelled at the government. But whatever changes are being considered that affect the relationship between the state and charity, it is worth putting them in the context of first principles. Sadly, we have become accustomed to politically expedient quick fixes — the lottery is a prime example — which have left us in our present state of confusion. I am reminded of what Walter Bagehot, the great Victorian Liberal, said about the characteristic defects of the English: "Their want of intellectual and guiding principle, their even more complete want of the culture which would provide that principle, their absorption in the present difficulty, and their hand-to-mouth readiness to seek reform without thinking of the consequences."

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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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