Today the Institute of Economic Affairs (IEA) think tank has published a paper that looks at the potentially distorting relationship between charities and the state. Written by Christopher Snowdon it is titled: Sock Puppets: How the Government Lobbies Itself and Why.
Many charities are not what they purport to be. To steal a phrase from the world of social media they are sock puppets. According to the IEA about 27,000 charities are now dependent on the government for more than three quarters of their income and the so-called voluntary sector now gets more money from the state than it gets in donations. The report makes four recommendations of which number 3 says:
A new category of non-profit organisation should be created for organisations which receive substantial funds from statutory sources.
I wrote to Nick Hurd MP the current minister for charities in December 2009 whilst he was the opposition spokesman to raise a similar point.
Could I suggest a rule of thirds? The Charity Commission should insist on the use of some designation such as “Government sponsored body” for any organisation that accepts more than one third of its income from government sources of all kinds but still wishes to be treated as a charity. Once a body exceeds two thirds of its income from government sources it should cease to be a charity and should formally become an agency of the relevant department. It could then be monitored by the NAO and use a .gov.uk web address, etc. Then we would all know what we are dealing with.
- You could call yourself a charity as long as less than one third of your income came from the state.
- Above one third you could still be regulated as a charity but you would not be allowed to use the word charity when describing yourself and would have to use a designation such as “Government sponsored body”.
- Above two thirds just call yourself what you are – a part of the government.
Back in 2009 Hurd said my ideas were “interesting” but clearly he has not got very far with bringing transparency into this area of public life.