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Presenter: David Walker
Producer: Zareer Masani
Editor: Nicola Meyrick
White City
201 Wood Lane
W12 7TS
020 8752 6252

Broadcast Date:
Repeat Date:
Tape Number:
Duration: 2736
Taking part in order of appearance:
Lady Browne-Wilkinson
Chair of Institute of Philanthropy, University College London
Neil Churchill
Director of Communications, Age Concern U.K.
Fiona MacTaggart
Home Office Minister for Charities
Frank Prochaska
Professor of British History, Yale University
The Very Reverend Timothy Wright
Abbot of Ampleforth
Ian Walker
Professor of Economics, Warwick University
Theresa Lloyd
Author and Director of Philanthropy UK

WALKER: Top of the list of things governments

should never touch, even with the proverbial bargepole, is charity - an
encrusted mass of tradition, legal humming and hawing and fiscal anomalies.
However New Labour, oddly bold in some directions, has opened the ancient box.
In a bill now before Parliament, it's seeking to define charitable purposes for
the first time since the Tudors.
The current bill doesnt actually grasp the nettle and it
still leaves confusion and complexity. If the entire Elizabethan statute was
scrapped, if we decided that we would decide now what charitable purpose should
be supported in the 21st century, then we wouldnt refer back to what the
charitable purposes were in 1601.
The legislation I think is a missed opportunity. There was a
real opportunity to create the public interest company, a company that uses
commercial activity to support social objectives; it doesnt distribute its
profits, it recycles them to support the business and the social goals
of the organization. That opportunity was a missed one.
Well, theyre wrong. I think its terribly important that
charitys altruistic and I think its the reason why we subsidise charity from
our taxes. We dont want a situation whereby people can create benefit for
themselves, can use charities as tax dodges. Thats the way to make people feel
cynical about charity. I think weve got to protect the nature of charity as
generosity to others.
WALKER: That's Home Office minister Fiona MacTaggart responding to the
disappointment of Neil Churchill of Age Concern and before him Hilary BrowneWilkinson, Head of the Institute of Philanthropy, a think tank at University
College London. Underlying their concerns run the two themes of this programme.
In our plural and fissiparous post-Christian society, can charity law ever hope
to capture agreement on what are "good works"? And what should be the state's
relationship with civil society, volunteering and giving? Ought it to back off?
These days the big charities get more money from government than public gifts,
so has the state become a crutch, without which charity would collapse into
insignificance? Fiona MacTaggart defined charity as altruism, giving to others.
If that rules out self help or cooperation, that's to cut away at its
foundations, says Frank Prochaska, a history professor at Yale who's written
extensively on the British charitable tradition.
Well, theres a little more overlap, I
suspect, than these strict categories would suggest. In the 19th century trade
unions, mutual aid societies often had a charitable dimension, and charities
themselves were often helping their own group of people. People come
together, whether in mutual aid or in charities, to look after a particular
clientele, and its often people that they relate to very immediately often
very locally. This is one of the great traditions of British charity is its
parochial character. And what weve seen happen over the last hundred, hundred

and fifty years is the move from the local to the national, from the parochial
to the ministerial, if you like, from the minister of religion to the minister
of state. And charity and mutual aid have both suffered because of this. If you
recall the 1945 to 50 Labour government wasnt terribly friendly to the old
friendly society tradition. Nor was it, of course, very friendly to the
charitable tradition.
WALKER: But among the reasons for that were the vagaries of charity: some
parishes do, others don't. Socialists - even Blairites - don't think you should
leave the poor to take pot luck. His point, though, is that the boundary between
self and others isn't fixed. That's got consequences for the way we think about
tax breaks and the nature of voluntary bodies which aim to help a particular
interest group. Here's Age Concern's Director of Communications, Neil Churchill.
Quite often people when they make a donation to a charity will
think: Well, there but for the grace of god I could have gone. Quite often if
youre giving money to a homeless persons charity, people are thinking: Well,
if my life had been different or if different things had happened to me, I could
have been in that position and thats why Im giving. It is clearly different
for an organization like Age Concern. We are all living longer, healthier
lives, we all have an interest in the quality of care that is available for
people who need support in later life. And I think there is another balance
that charities play between sympathy and empathy on the one hand getting
people to sympathise for the interest of the beneficiary and, on the other
hand, trying to get people to empathise and say actually this might affect you
and you may need to feel some ownership in the solution. And perhaps
charities have had to play too much the sympathy card to try and get people to
feel sorry for a group of people, and the impact of that has been that the
public has been distanced from that cause and has felt less empathy for those
groups of people. So you could ghettoize the beneficiaries that you seek to
WALKER: From Lloyd George on, state pensions and social security have tried to
address precisely that problem: everyone pays taxes for them but only certain
groups, the old, the poor, get a benefit. The bargain holds if we do indeed
think there is such a thing as "society". Frank Prochaska recently argued in a
pamphlet for the pro-Tory think tank Civitas that the expansion of the state has
been killing natural feelings of mutual obligation.
There were millions of parochial associations that died a death
in the 1940s and 50s because of government provision, and in schooling you see
the same tradition of voluntary bodies, Sunday schools, charity schools that
died away in the late 19th, early 20th century because of the growth of
government in education. So it is something of an irony that now, after all
these decades have passed, that they feel the need to reinvigorate the
charitable sector.
WALKER: Do you think one can sort of establish something like a cordon sanitaire
between the state and these autonomous bodies? Might legislation, new
legislation be one way of perhaps better definition of respective functions?
Yes, possibly, but it will be rather arbitrary in practice. I
mean in the 19th century there was an attempt to create boundaries between
welfare services provided by the Poor Law Authority and charitable services.
The argument then was that the government services, the poor law, would assist
those who were undeserving that is paupers and that the charitable sector
would assist those who might be reformed and who were capable of self-help
that is the deserving poor. Now this was a line of argument that one heard all
the time in the 19th century, but it broke down in practice as often as not, and
I suspect whatever definitions that government comes up with today will break
down in practice as well.

WALKER: He's got a point. The government's new bill lays down a test of "public
benefit" for granting charitable status, but it's not clear how that's to be
distinguished from the public benefit of action by the state. Is charity merely
complementary? Perhaps, in New Labour style, distressed mariners should be given
a choice between rescue by the Royal National Lifeboat Institution and the Royal
Air Force. Charities minister Fiona MacTaggart, herself formerly a director of a
charity, presents it as a sort of trademark in need of updating.
The moment when you need to protect a brand is when a brand is
still good. When a brand has lost its salience sometimes its impossible to
rescue it. So I dont actually think the charity brand is damaged. But I do
think that you need to make sure that you protect it powerfully from the risk of
damage from people exploiting the benefits that charitable status brings or
from charitable status going to the wrong kind of things or from the definition
of charity getting out of date, which in effect it had, so that things like
human rights was not a charitable purpose under the old regime. And that was
disappointing and confusing for the general public who would assume that
something like Amnesty, which supports people who are being imprisoned because
their rights are being denied - well surely that should be a charity? Then
theres a complicated question about political campaigning. You see I think the
best way to end child poverty is to vote Labour. Now that doesnt mean that I
think that the Labour Party should be a charity. I certainly think the Child
Poverty Action Group should be a charity. We have to create boundaries around
political campaigning.
WALKER: But what if the CPAG urges people to vote Labour in order to secure the
abolition of child poverty? That may still fall foul of charity regulators,
even after the new law is passed. Besides, can the minister's businessinflected talk of brands be squared with campaigns based on fundamental
political values? Fiona MacTaggart said we didn't want the "wrong kind of
things" being given charitable status. But is there really a solid consensus on
what the right things are? Ought it to be government predefining what does or
doesn't count as a good cause?
Its not the cause that matters so much as the independence of
the institution because voluntary bodies are by their very nature antithetical
to statutory provision. The essence of them is their independence and autonomy.
WALKER: Frank Prochaska.
Thats the risk that were taking at the moment with more
incentives by government to establish charitable institutions. The funding
question is a very big issue. In the 1980s about ten or twelve percent of funds
of charities came from government sources. In the 1990s, mid-90s, I think it
went up to about thirty-five percent. The figure today would probably be around
forty percent or so. The issue then is are these institutions actually
autonomous, independent institutions when they take so much money from
government sources?
WALKER: And your line of argument would be that without that independence from
government, they cant function as the social binders which do create a viable
civil society?
Yes, I see two different avenues to democracy. One is the
institutional. The Victorians were very keen on this argument that institutions
had a sort of democratic character. These were sometimes called subscriber
democracies or subscriber institutions. They were paid for by subscribers and
run by subscribers. And the other path, of course, is the representative
principle, which over the last hundred years has tended to drive out that sort
of voluntary tradition of democracy. This was the effect of the growth of
government intervention and it was all done for a very good cause. Once you
extended the franchise, the government felt a greater and greater responsibility

for social and health issues. But there is something of a danger in charities,
as I put it in one my writings, swimming into the mouth of Leviathan.
WALKER: But listen to New Labour ministers - Leviathan sounds oddly diffident.
Blairites and Brownites say in chorus they want more mutualism, more diversity.
Hospitals and schools, many of them often charities, are being promised more
freedom from the central state.
Charities arent always at less cost, but theyre always more
focused on the person, theyre always more focused on the mission, and what that
means is that sometimes they can solve problems that the state doesnt know
WALKER: Fiona MacTaggart cites provision for young single homeless people.
Take something like the Foyer Movement. They were asked to solve
the problem of youth unemployment. And actually they pointed out that it wasnt
just a problem of youth unemployment; it was a problem where a young person
didnt have a home so they couldnt get a job, they couldnt get a job so they
couldnt get a home. And the best answer was to solve both these problems at
once. And they came up with a new answer to two old questions. The problem
with the state is that we have a tendency to be a bit like Henry Ford when were
producing something you can have any colour of car so long as its black. One
of the things that voluntary organizations and charities can do is that they can
reinvent problems and create new solutions which are much cleverer, and thats
where theyre very special.
We should be providing services where we are adding value to what
might be achieved in the statutory sector or where we can engage with older
people in a different, more constructive way.
WALKER: Neil Churchill.
Ill give you an example of that. When pension credit, the new
benefit for older people came out, we found that a lot of older people were
turning to us first because they werent sure whether they could trust the
government, they werent sure they wanted to give their private details to the
government. They wanted to come to us and say: What is this about, what do I
need to know about it, can you help me to deal with the relevant forms that need
to be filled in, the relevant people I need to meet? So thats one of the ways
in which we can add value, but I think we have to tread a very careful line.
One of the difficulties we had was in a discussion with the pensions service
when the pensions service moved out of benefit agencies but wanted to provide
their service through local Age Concerns. And on the one hand we could see an
advantage of making sure that that service got out to large numbers of
vulnerable older people but, on the other hand, potential difficulties of
compromising ourselves within a context of local Age Concerns who want to do
campaigning as well as service delivery. And we had to think about that long
and hard, and we had to negotiate the right conditions with the Department of
Work and Pensions.
WALKER: Charities boldly going where the state fears to tread fits well with the
New Labour line, resting on post-Thatcher, post-Cold War belief in the limits of
1989 was a momentous turning point. It revitalized civil society
and it made us rethink charity as a part of civil societies.
WALKER: Frank Prochaska.
The language in which charity operates is a lot more congenial
today than it was in the 1980s. I remember Gordon Brown in 1988 saying that

charity was a sort of seedy competition for public pity. A couple of years ago,
he launched a campaign to revitalize civil society. So I think charitys been a
beneficiary of this rediscovery of civic institutions. Of course Central
European states felt that they had no civil society and this needed to be
rediscovered. This was a point made by Vaclav Havel who saw these intermediary
institutions acting between the citizen and the state as a This was a moral
space to Havel.
WALKER: Yes, but Havel also spoke out about the encroachments of capitalism on
civil society. While Fiona MacTaggart wants to enlist charity as being
complementary to state provision, Frank Prochaska ascribes to charity a role as
bastion against the state ~ both oddly functionalist doctrines for activity
thats often accidental, random and unreliable, because its based not just on
our sense of the good but our fragile willingness to try to put the good into
institutional effect. Churches were once an obvious vehicle for precisely that
purpose. But these days they're a minority taste. Heres Abbot Timothy Wright
of Ampleforth, a Benedictine community that runs a leading independent school.
WRIGHT: The fundamental definition that I would give is that it springs from
giving rather than having. In other words that human beings give to those for
whom they have responsibility directly in families, etcetera but they also
give to the wider community for those who havent got. And thats a human
inspiration, thats a human gift, and it contrasts with the rather more
acquisitive, materialist sense, which is where Im defined by what I have and
various status symbols come into that. There is a difference between people who
are predominantly thinking of having and people who are have a sense of giving
whether its to their family, to their community, to the wider world, those in
need. And probably in most of us the two are to some extent in conflict.
WALKER: Do you think we can rely upon there continuing to be a sufficiently deep
pool of motive towards that kind of altruism? That in an acquisitive society we
can guarantee that people who are not Christians any longer will still feel
motivated to want to help their fellow beings? Do you not feel, fear rather, a
sort of moral vacuum in our modern society?
WRIGHT: No, I hold deeply that each person deep down wants to be loved and is
capable of loving, and that provides the moral agenda. How its expressed I
think varies hugely from the sort of environment youre living in, but I still
think that as human beings we want to be loved and we want to be able to love.
WALKER: Some of us have more wherewithal for demonstrating our love some a lot
more, relatively speaking, as the distribution of wealth is now more skewed than
30 years ago. A survey of giving has just confirmed that less well-off
households give a higher proportion of their income to charity than those
further up the curve. The poor folk at the gate seem to have read the parable of
the widow's mite. If the Abbot was sanguine about sustaining the gift impulse
through time and income levels, the economist is clear eyed. This is Ian Walker,
a professor at Warwick University.
Its true that we are getting richer. Its also true that
actually were not giving any more than we really used to. So you know although
its the case that around seventy percent of us regularly give money to charity
and on average we give about twelve pounds a month, those figures actually
havent really changed in the long-term over time. Were not becoming more
charitable, I would say. The other aspect of charity is giving your time, and
here it does look like were becoming meaner with our time so as our time
becomes more expensive, we seem to be willing to give more of it to our employer
but we give less of it to other people. And thats partly, I guess, because of
the way in which the labour markets developed. Theres been a huge increase in
the number of mothers who work, theres been an increase in retirement ages in
the last few years so old people are less likely to volunteer. You know while
the voluntary sector does employ regular professionals - in fact something like

six hundred thousand people, two percent of the workforce actually work in the
voluntary sector - the number of true volunteers in the voluntary sector
actually has been falling. So were giving no more money and were probably
giving less time.
WALKER: Britain is a fat cat society. There's a lot of extra wealth and income
swilling around the corporate sector. But if Bill Gates is a hero in the US for
endowing his money to good causes, philanthropy hasn't become fashionable in
Fenchurch Street. Why isn't generosity more fashionable? I asked Theresa Lloyd,
who has just brought out a book entitled Why Rich People Give.
LLOYD: It is said by people who are perhaps a bit cynical that one of the
reasons that people give is for social recognition. I would argue that in fact
the audience for peoples philanthropy is not at all a general one. Its much
more their own peers; so hedge-fund people may want to impress other hedge-fund
entrepreneurs; people in IT, the audience for their philanthropy is other people
who have been successful in creating IT businesses and so on. And there was
very much evidence of that, rather than general fame, general recognition. The
people I interviewed were seventy percent self-made. What was very clear is
that the further away you move from London, the stronger was the giving to the
local community. I mean this was very, very clear so that in the North-East
and the North-West, the vast majority of peoples giving went to the community
where they were based. People particularly working in the South-East and
working in the city have no relationship at all in personal terms with the
people who are making their money, so I dont think theres that same sense of
obligation to the workers who work for them and help create the wealth.
WALKER: Victorian generosity symbolised by such names as Carnegie or, here in
London, Peabody, seems nowadays in shortest supply where most money is made,
such as the City. Theresa Lloyd presents a chilling picture of hedge-fund barons
driving to and from homes in London and the country to city offices in a social
bubble, indifferent to the less well off people around them. But, she argues,
they may yet be get-attable; the spark of conscience hasn't entirely been
extinguished. Which, if true, is welcome: giving may now be more rather than
less needed, says Professor Ian Walker.
Although on average were getting richer, theres still a lot of
poor people out there and I wouldnt say that the number of people who are
relatively poor has fallen dramatically. The kind of need for charitable
voluntary activity is actually probably rising, especially because of the
increase in the number of old people. So while were working harder and there
are fewer people there to volunteer, actually the need for this is actually
probably rising because there are more people who are dependents than there
have ever been in the past.
WALKER: So an ageing society may well mean more potential recipients of charity.
But there's a danger here of thinking in patronising, old-fashioned terms.
The word charity also has a number of negative associations.
People feel done by or done to when they encounter a charity.
WALKER: Neil Churchill.
A lot of organizations have deliberately tried to structure
themselves more as not for profit organizations, which give the beneficiaries a
direct role and say in what the organization does and how it spends its money.
At Age Concern, we would hope we are bringing a lot of what is best about the
charitable tradition, but we are really seeing ourselves as a not-for-profit
organization that derives income from a variety of sources and achieves our
social goals in a variety of ways by providing services, by campaigning but
also by trading and we see that overturning market failure for the benefit of
people who find they cant buy a product because theyre deemed to be too old is

a very good way of achieving our mission. Now that is not something that could
be achieved under traditional notions of charity.
WALKER: If we need a new, overarching definition of not-for-profit, the easiest
thing might be to abandon tax exemptions altogether. Would giving really dry up
if we didn't get relief on covenants or Charities Aid Foundation cheques? The
philanthropy lobby evidently thinks so. It wants to make the tax code even more
ornate, to incentivise British giving to American levels. Hilary BrowneWilkinson, a leading charity lawyer, sees a case for shifting the balance on
personal-public benefit.
It has certainly been traditional fiscal policy that a
person must not get a benefit and must not retain an interest if he gets a tax
deduction. Any government would be very reluctant to change this, but I dont
think that it has any overwhelming value.
WALKER: Do you think there should be a major revision of our tax regime in order
to encourage more philanthropy?
There is one particular tax deduction in the United
States which would make a difference, and that is to allow the donor to retain
some sort of benefit or interest and still get a tax deduction on his donation.
It in fact has been the method of encouraging not the very wealthy in the States
but the middle wealthy because it provides security for them. They can give a
donation and yet they can ensure as a sort of a pension that theyre protected
for the rest of their lives. So they give a lump sum, lets say, or a block of
shares to a charity, and during their life the life of the donor or the
donors spouse they get an income each year. Fear of the future is one of the
greatest barriers to giving because people are afraid that theyre not going to
have enough for the future. Now this way, it overcomes the fear and it provides
a security for the future.
LLOYD: Undoubtedly it has hugely encouraged philanthropy and accounts, I think,
for some forty percent of major plan giving in the US. I would argue that
surely the donor benefits, but so too does the charity, the recipient
organization who can plan safe in the knowledge that this money will be coming
to them sooner or later, unlike with a legacy where someone might change their
WALKER: Theresa Lloyd.
LLOYD: The Government benefits because the major organisations which are
sustained by this kind of giving, which is mainly higher education and the arts,
are more secure. I mean we have a chronic problem in the funding of
institutions of higher education particularly in this country, who do not enjoy
the kind of massive endowments which underpin the independence and ability to
invest in creativity and research and so on and so forth which sustain major
American institutions. So I would argue its a win-win situation.
WALKER: Well it can't be entirely win-win since the Treasury would lose revenue.
Make no mistake: tax reliefs are an inverted kind of expenditure. Except that
the Treasury has no control over where the money goes. The wealthy might choose
to give large additional sums, say, to universities or opera-houses; but a test
of public benefit might say the money would have been "better" spent on
children's centres for the under-5s.
The charities bill is especially controversial because of private schools. Can
you really say Harrow or Ampleforth provide a public benefit, even if they now
open their sports grounds on a Saturday to the local oiks? The underlying
question, though, is who, in a democracy, but an elected government can test the
benefit? If the state were to back off, as we've heard argued in this programme,
who would assure the public its gifts were appropriately deployed in the

interests of others; and who's to police the evolution of charity into a

business for well-heeled professionals and social entrepreneurs? Yet "benefit"
is what it is about, even in a society where folk are more concerned about a
garage for their second camel than the ease with which it will pass through the
eye of the needle. Abbot Timothy Wright.
WRIGHT: One of the crucial things is are you giving for you to benefit in the
material sense? So, for example, if you are going to gift aid something, are
you the beneficiary of your gift aid? And if you are, then clearly its not a
charitable act. For example, if I bring it back to any institution that youre
paying into in order to get medical services or educational services, if you are
able to gift aid your fees, then clearly that is transgressing and misusing
charity because effectively youre getting the benefit. And to me, therefore,
the criteria of public benefit is that its the benefit for someone else, not
me, and the people who are running the organization are running it not to make
profit for themselves or for shareholders but for the good of the end to which
theyre committed. And whether that is promoting their faith as a religious
body, whether its providing medical or educational or social services for other
people doesnt matter.
WALKER: Doing good for other human beings is the name of this game, with a bit
of latitude for the dogs and the trees and a few pennies here and there in tax
relief. Inevitably, the public-private boundary is boggy: independent schools
such as Ampleforth, which have charitable status, claim to make a contribution
to the general good, while restricting their direct benefits to small numbers
who can afford to pay for privilege.
Let's focus on that word "good". Earlier Fiona MacTaggart used the word brand
to refer to charity. But there's a risk in substituting commerce-speak for
talking politically, about values, social obligation, the offensiveness of
inequality. Charity, said the Abbot, is about caring. It is better to give
than to receive, have and hoard. The Charities Bill could do with a few more
declarative statements of faith of that kind.