The case against giving taxpayers money to charity.

Maybe I was sleeping but I don't recall in any manifesto a commitment to give my tax to charities.  If I want to give to charity I can do so myself.

Which brings me to a question, when is a charity not a charity?  That is a question that is very much to the fore today as the Kids Company apparently is spiralling to its demise.  It may have ceased trading by the time you read this.  Why?  Because it is insolvent.  That means it does not have enough resources to pay its liabilities.   To trade in such a position could render the Board and Executive of the charity liable to charges under the appropriate pieces of Company legislation brought in by parliament.   A fine, or a prison stretch in more extreme cases, could await the unwise director.

There is a reason for legislation.  It is to stop people behaving recklessly.  Now, I have no idea if the people at Kids Company have behaved recklessly. That is for others to look at and decide. 

But let us get back to charities, what are they?  Are they bodies that you and I decide to support because they do good things and rely totally on public support for the work they do?   Many are and do some amazing things.  But many charities now earn rather a lot of money from delivering government contracts.  Some earn more than they get in voluntary gifts from people like you and me. Which does make you wonder why they have the status of charity when in fact they are a trading entity just like any other business. 

Esther Keller, director of Kids Company services in Bristol, perhaps doesn't get the difference.  She told BBC Radio 4's World at One, rather sourly and foolishly I thought given you should be looking at this stage in the proceedings not to upset the people you need on your side, that the charity had been "audited to death" over its government funding.  Welcome to the real world Esther where people have to justify what they spend taxpayers hard earned money on.  If you don't like the rules that go with getting taxpayers money, don't ask for it.  And as someone who has been involved in his fair share of reviewing charities on these shores and beyond, I have found it is usually the ones where you wonder what is really going on that you decide to audit to death. There is usually a reason. 

Ms Batmanghelidjh, the Kids Company founder, said she had "vigorously" pursued the government for funding, because "we'd run out of every company and every charitable trust that we could potentially get money from".  Bit of a clue to her problems there I would have thought.  People didn't want to support her. So just why does she think the taxpayers should pick up the tab if she has over exposed the organisation and promise what it cannot deliver?

It is hardly surprising that you will run out of money if you give it away. Previously published claims include suggestions that Kids Company hands out money to children – something which Batmanghelidjh compared to pocket money on BBC news on Friday.

Perhaps the time has come to strip organisations of their charitable status if they deliver contracts for government.  Let them become cooperatives, partnerships or some other business model.  But let us stop this ridiculous thinking that they are charities.  That way we will stop mollycoddling them as special cases.

All this reminded me of an excellent article in the Guardian a few years back. It is time for action.