Opinion: We need a redistributive tax for charities

Nick Cater, a consultant and writer: catercharity@yahoo.co.uk

Everyone in the charity business pays at least lip service to the often impressive work carried out by its smallest groups, which deliver results on a diet of fresh air, hope and volunteer zeal. They are astonishingly cost-effective and efficient.

But the deepening challenge for such groups, which usually lack staff or reserves and make up the vast majority of those registered by the Charity Commission, is that their funding is going nowhere, while the few hundred largest charities are seeing their incomes go sky-high.

The smaller charities are hampered by their lack of marketing and fundraising skills, while larger charities have the in-built advantage, especially in a busy world of splintered media, of name recognition, as well as donor databases to exploit.

Every now and then a news event or unusual case - such as Top Gear's Richard Hammond and the air ambulance - allows a charity to grow fast, often, these days, off the back of instant online giving.

In the main, though, the wealth gap between the charitable haves and have-nots is widening, leaving many promising small groups locked in poverty.

Luckily, there is a solution, which is based on the essential qualities of the voluntary sector, with its belief in helping the underdog, fairness, equality and intervention to improve people's lives.

Try this: redistributive taxation. For charities.

So if a big charity makes, say, £1m a year, it could be taxed at 1 per cent, 2 per cent, maybe even 5 per cent, with the money redistributed to smaller charities, based on the previous year's results.

The fat-cat charities will howl with complaint and say it is unfair.

They would say that, wouldn't they? But I'm sure that redistribution of income will be regarded by all right-thinking people as a great idea to help poor charities out of poverty.

It is a simple way for the big chaps to offer the little guys some bootstraps to pull themselves up by, so that more will thrive and grow. And it uses the extra efficiency and effectiveness of those at the bottom of the heap to extract more value from each £1 that is transferred.

Isn't it true that all charities are based on that often reworked dictum "from each according to his ability; to each according to his needs"?

In time, it might even be applied to individuals so that the wealthy in our society actually start to pay a fair proportion of their income towards helping others.

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