A Step in the Right Direction

IAIN DALE IS AWAY - SHANE GREER IS STANDING IN

I just read an interesting piece in the Telegraph about the Conservative Party’s desire to incentivize giving amongst the wealthy; which given the absurd proposal to levy parking fees on out-of-town stores which saw the light of day earlier this week should be welcomed. However, whilst the idea of encouraging charitable giving amongst the wealthy possesses undoubted merit it fails to go far enough.

A few years ago I worked for a Disability arts organisation in Liverpool. During that time there were a lot of things that struck me – not least of which was the incredible service the ‘3^rd Sector’ can provide – however what struck me most of all perhaps was the nature of fundraising in this country. Obviously the fundraising operations employed by the 3^rd Sector varies from charity to charity. But a number of over-arching problems are present across the board.

For many charities, community initiatives etc one the biggest weaknesses they have is their dependence on big donors (usually grant-making bodies).

The availability of such money is naturally enough dependent on a given organisation’s ability to meet criteria set by a given grant-making body. Money is raised on somebody else’s terms, not their own. More worrying (and closely related) though is the issue of dependence itself. If a charity’s income stream relies on a small number of big donors (be they private individuals, grant-making bodies or otherwise), then those donors have an incredible amount of power over a given organisation: you must do x or we pull the plug.

That’s not to say big donations are bad for an organisation, rather big donations alone are bad for an organisation.

My experience of fundraising in the US [cue anti-Americanism in the comments] however suggests there is a better way. The operating budgets of charitable organisations etc in the US (and I confess my experience relates specifically to political non-profits) are overwhelmingly made up of small donations from private individuals across the socio-economic spectrum. From $5 to $500 the lower level donations breath life into the 3^rd Sector.

This means a number of things. But most importantly fundraising is determined on the charitable organisation’s own terms. Dear Sir, Here’s what we do, I hope you like it and will give us money. But the nature of dependence is also different. If a small donor doesn’t like what an organisation is doing and wants it to change, the organisation has the power to say no, because a $100 hit in a pool of thousands of $100 donations is much easier to bear than a $500,000 hit in a pool of 2.

Coming back to the original point, the idea of incentivizing giving amongst the wealthy is a step in the right direction. But what about incentivizing giving across the board by creating a tax system that’s actively friendly to all levels of charitable giving? Why not look at ways of making it easier for charities to raise money by reducing postage costs on fundraising drives and donation return envelopes. There are a multitude of things that could be done put a turbo charge into 3^rd Sector fundraising and the Conservatives have taken a step in the right direction – now lets hope they start sprinting.