When Eton and Goldman Sachs run charities, system needs reform
There’s been much gnashing of teeth over the government’s proposal to cap tax relief on charitable giving at £50,000 (or a quarter of your income).
Charities are concerned that the changes will discourage the rich from donating if it’s no longer in their interests and The Telegraph reports today the government has accepted the changes in the rules will impact on charitable giving.
Most of us donate money without taking any tax benefit and no rich person will be prevented from donating to charity, only prevented from taking that money out of tax revenue in order to do so. Even with those caveats, charitable giving is in desperate need of reform.
There are over 162,000 charities in the UK. These range from wholesome providers of housing, healing or hope to less obviously charitable organisations. Eton, for example.
The elite school is very keen to show potential donors the financial benefits of handing over their cash.
While there’s no particular objection to people being able to give their own money to whomever they please, it can’t possibly be right that they take that money out of the revenue we use to pay for state education in order to fund Eton.
Goldman Sachs has a charitable organisation with an income, in 2010, of £57 million, although it only spent a little over £6 million of this on “charitable activities” and, according to the Charities Commission, it has no employees. Our current rules say you can reduce your tax bill by giving to Goldman Sachs Giving (UK) while councils plead poverty when it comes to keeping open libraries.
These rules allow the rich to take tax revenue out of the Treasury’s income and decide where it’s spent, whether that’s on something we can all agree is charity or organisations that look a lot less benign, but somehow have wangled charitable status.
I don’t want to see youth projects or medical research denied funding which is precisely why I don’t want to see the rich reducing the amount of tax they pay by bunging money to elite education establishments or having wings named after them in some dodgy institution.
If we lived in a society that didn’t let people fall through the cracks and ensured decent funding for housing, the old, the disabled, and the young we wouldn’t need some of these charities in the first place.
The first step is to ensure that we all pay our fair share in tax and that we tighten up who can and cannot call themselves a charity.
