Think tank urges a revolution in classification of charities

Charities that receive more than 70 per cent of their income from the state, such as Barnardo's and NCH, should be recast as "statutory agencies" and have their tax breaks withdrawn, according to a book to be published this week by right-wing think tank Civitas.

In Who Cares? How State Funding and Political Activism Change Charity, Nick Seddon, a research fellow at Civitas, argues that charities should be reclassified and their tax benefits scaled down in relation to how much government funding they receive.

"Charities receiving less than 30 per cent of their income from the state and its agencies could still benefit from the advantages that charitable status currently affords," he writes. "Those receiving between 30 and 70 per cent of their income from the state and its agencies could be called state-funded charities and benefit from more modest concessions."

He calls charities such as Turning Point, Barnardo's, the NCH and the National Family Parenting Institute - all of which receive more than 70 per cent of their income from government - "de facto state agencies, quangos or satellites".

Seddon adds: "They could still receive that money from the Government, but they couldn't still be considered charities."

He says that the blurring of divisions between the state and the third sector is harming many voluntary and charitable bodies.

Some charities Seddon names have dismissed his arguments. In a joint statement, Clare Tickell, chief executive of NCH, and Martin Narey, chief executive of Barnardo's, said: "Wherever our money comes from, we act independently of the state and use our income to improve the quality of life of the most vulnerable children and young people. This is our primary motivator. We are not interested in ideological arguments."

A spokeswoman for Turning Point, which receives more than 95 per cent of its income from government, said: "We exist for the public good - we are a charity and a social enterprise and we make no apology for being businesslike."

- See Editorial, page 15.

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