Salving the Conscience?


This week on Facebook I admit to having been duped by a charity. In a fanfare of publicity the charity named The Kids Company, a Ms Camila Batmanghelidjh and, as it turned out, my own government — although there’s nothing new in that — squandered money on anything but charity. It never was The Kid’s Company and it was only the exposé of this charity that focused my attention on the work of charities in the UK. I was surprised to find that Batmanghelidjh had successfully used the charitable system for nearly twenty years, only stepping down last year. My innate cynicism telling me that this is a story the establishment would like to quietly be forgotten, especially the political establishment and in particular David Cameron the prime minister. While Batmanghelidjh has, albeit not so quietly, vacated her role as Chief Executive of The Kids Company, I expect her leaving deal was more generous than we are ever likely to find out and her continuing advocacy and clinical role in The Kids Company, is simply the icing on the cake.

Cameron Batman

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It is unfair to entirely blame Batmanghelidjh for the decline in trust regarding charities, after all she ran The Kids Company for twenty years before its exposure. The UK media, with its usual self-righteousness approach to such things, lays claim to the exposé and yet fails to account for those twenty years. The UK media had clearly been aware of UK charity organisations funding misfeasance but were also aware that any exposé failed ignite the  the moral outrage of the public. The exposé on The Kids Company and Batmanghelidjh provided the UK media with a long running story that fed public self-righteousness. However the conclusion drawn, is not so much the misuse that charitable donations may have been put to but the exposure of the public funding largess received by charities. This may be bad news for the establishment and the political administration, the government’s grandiose support of charities doesn’t equate to a good return for the charitable donator or the taxpayer who funds this political munificence.

Sunday: Why has trust in charities been declining? When asked in 2014 whether most charities are trustworthy and act in the public interest 71% of over 1,100 people agreed, a figure broadly in line with previous years. In 2015, this had fallen to just 57%.

Monday: The Rotten Basis for Government Anti-Advocacy PolicyThe Institute for Economic Affairs (IEA) “evidence” base for the Government’s anti-advocacy clamp-down on charities’ use of public funds is a muddled Tea Party-type polemic.

 Tuesday: Hard Evidence: which charities get the most money and is it enough? Governments seeking to reduce the state’s role in public service delivery find charities a highly attractive alternative.

Wednesday: Oh, sweet charityBritain has 195,289 charities. In the opinion of David Craig that’s at least 150,000 too many.

Thursday: Charity boss — earning more than £100,000′ a year says six-figure salaries ‘aren’t an issue for donorsThese charities rely on public funds and have received more than £1.1billion over the past three years from the Government, the United Nations and the EU. A report into UK charities entitled a hornet’s nest (pdf) states that: 292 charities, with a combined income of £2.4bn spend 10% or less on their charitable activities, while 1,020 charities, with a combined income of £6bn spend 50% or less on their charitable activities.

Friday: The trouble with Kids Company. Between 2000 and August 2015, when it filed for insolvency the charity received a total of £46m of public funding, £42m in central government grants, £2m from local authorities and £2m from lottery organisations. On the much publicised failure of The Kids Company the media published numerous articles, with an article on public finance claiming that for all the investigations and press stories, the two key things leading to the company’s collapse were weak finances and poor governance.

An article with the title Kids Company: the sad truth about why charities suddenly collapse presented an empathetic approach to the funding of charities in general, but which failed to address why companies that rely mainly on public funding have charitable status. I suspect the answer lies, as the article pointed out, in charities being increasingly used to replace the state as providers of public services. Political administrations have a vested fiscal interest but perhaps, more significantly, a vested political interest in appearing as public benefactors.

At the end of this sorry saga, my self-righteous indignation having been dissipated, I’m left feeling rather nonplussed. The same politicians are returned to office every election by an electorate that largely seems to view elected political administrations with a charitable indifference. Perhaps we, the electorate, expected our government to be philanthropic and our indignation is only aroused when we are not the recipients of its munificence.

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The Real Economy

Hello, I’m Ed Conway, Economics Editor of Sky News, and this is my website. Blogposts, stuff about my books and a little bit of music

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