Children in need and charity question.

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Morning.

A genuine puzzling question I've had for a few years and I'm sure someone will know more about it than me .

"Since our first major Appeal in 1980 BBC Children in Need has raised over £1 billion to help make a difference to the lives of disadvantaged children and young people around the UK."

Last year the generated over 50 million alone.

https://www.bbc.co.uk/mediacentre/latestnews/2018/children-in-need-final-to...

Why don't the just put all this money in a giant bank account and cream off all the interest and give that to the charities going forward ?

Or am I being stupid .

What am I missing

Each year they could just keep adding to it surely ?

TWS 

4
Nempnett Thrubwell 12 Nov 2019
In reply to Chive Talkin\':

The money gets spent.

What you're suggesting is that if I take my salary and put it in a bank - then in 10 years time I can just live of the interest.

trouble is - what do I live on for the next ten years?

Yes there will be a little bit extra each year - which goes into my savings / pension etc - but it's going to take me until retirement to get a pot big enough to live off the dividends.

- as long as I don't splurge it all on the 4 mid-life crisis I'm planning on having.

 john arran 12 Nov 2019
In reply to Chive Talkin\':

Sounds logical enough from a long-term perspective, but...

You see those children over there, starving, freezing and homeless? If you donate generously we'll do nothing to help them at all for a whole year. If any of them are still around by next year, we'll spend a few percent of your donation in helping a few of them out. The rest we'll keep safely in our high-return savings account rather than using it for children with serious and pressing needs.

How many donations do you think they would continue to receive with a strategy like that?

In reply to Nempnett Thrubwell:

> The money gets spent.

> What you're suggesting is that if I take my salary and put it in a bank - then in 10 years time I can just live of the interest.

> trouble is - what do I live on for the next ten years?

> Yes there will be a little bit extra each year - which goes into my savings / pension etc - but it's going to take me until retirement to get a pot big enough to live off the dividends.

> - as long as I don't splurge it all on the 4 mid-life crisis I'm planning on having.

Is not solving these issues a long term plan rather than a quick yearly fix ?

In reply to john arran:

> Sounds logical enough from a long-term perspective, but...

> You see those children over there, starving, freezing and homeless? If you donate generously we'll do nothing to help them at all for a whole year. If any of them are still around by next year, we'll spend a few percent of your donation in helping a few of them out. The rest we'll keep safely in our high-return savings account rather than using it for children with serious and pressing needs.

We don't seem to be solving any of these problems though do we.

Again solving these issues should be a long term plan rather than a quick yearly fix 

> How many donations do you think they would continue to receive with a strategy like that?

Who knows .

Post edited at 09:35
 john arran 12 Nov 2019
In reply to Chive Talkin\':

Solving these issues should not be left to charitable donations at all! It's a sad reflection of our society that it still is.

In reply to john arran:

> Solving these issues should not be left to charitable donations at all! It's a sad reflection of our society that it still is.

Unfortunately yes

 DancingOnRock 12 Nov 2019
In reply to Chive Talkin\':

That’s pretty much what they do. You have to apply for a grant from the fund. This takes a while to be processed (although they’re trying to speed this process up) Some grants are multi-year so funds are held and released yearly as the charity monitors the work being done. 
 

If you only distributed the interest, that would only be 10% of so of the funds depending how the money is invested. Besides there are very strict guidelines on what charities can do with the money they raise in order to avoid being seen as making a profit and liable for tax. 
 

https://www.bbcchildreninneed.co.uk/about-us/faqs/

 DancingOnRock 12 Nov 2019
In reply to john arran:

That’s a political decision. Individuals are able to give charitably to organisations that they feel would benefit from their money and get tax relief, rather than paying tax and have the government decide where to spend the money. 

Mountain rescue, the RNLI and the Air Ambulance prefer to operate as a charity and dictate to themselves what their budget is, how they spend it and how their organisation works, without government interference and risk of arbitrary budget cuts/increases depending on whichever political flavour is in power.

If you’re happy to pay more tax and see it directed according to whoever is in government then that’s fine but it’s not cut and dried. 
 

So, on the contrary, I see people raising money for good causes as a good reflection of our society.  

Post edited at 12:01
In reply to DancingOnRock:

> That’s pretty much what they do. You have to apply for a grant from the fund. This takes a while to be processed (although they’re trying to speed this process up) Some grants are multi-year so funds are held and released yearly as the charity monitors the work being done. 

I wondered if they did some type of investments.

> If you only distributed the interest, that would only be 10% of so of the funds depending how the money is invested. Besides there are very strict guidelines on what charities can do with the money they raise in order to avoid being seen as making a profit and liable for tax. 

Ah .  I should have read a bit further of the FAQ.

 toad 12 Nov 2019
In reply to Chive Talkin\':

At one time many charities did this. As an example, a charity is gifted a building or similar with an endowment to invest to cover future running costs and repairs. This worked very well until the banks collapsed. Suddenly running costs are outstripping the income from the investment because interest rates are fraction of what they were. 

Charities are prohibited from investing in higher risk funds because that initial sum must be protected. The choices are  constant fundraising for running costs (people hate paying for running costs, they want their time sat in the beans to pay for new gym equipment, not to pay for safety inspections of existing stuff), or shutting the building, or sacking the staff that run the building

Fundraising and financing bodies like CinN don't help this, but they are driven by what the punters want to see. 

 john arran 12 Nov 2019
In reply to DancingOnRock:

> ... risk of arbitrary budget cuts/increases depending on whichever political flavour is in power.

That's the part that is a sad reflection of our society, obviously not people's desire to give and to help, nor various organisations' preferred ways of coping with our flawed society.

1
 ianstevens 12 Nov 2019
In reply to Chive Talkin\':

What gets me is how people are willing to donate their money in this sort of fashion, but are completely against tax raises which could fund public services to help negate the issue in the first place.

2
 neilh 12 Nov 2019
In reply to ianstevens:

Its quite natural, people want to support causes they have a close connection to.

There is often a big difference between public services and charities in respect of their ethos. Usually only people who do charitable work get this. For example why do so many people give up their time voluntarily to support things?

Charities embrace a huge range of activities- RNLI, mountasin resue to Barnardos and so on.

 DancingOnRock 12 Nov 2019
In reply to john arran:

It really isn’t. People with specific expensive  needs, simply can’t be looked after by a general system. Politicians will promise you they can, but they can’t because the systems required to administer would be too complex and full of red tape.
In any case it’s better to provide lots of people with some money than a few people with lots when it’s coming from general taxation. Charities like this are a much better way of dealing with specialised issues. 

Post edited at 12:32
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 DancingOnRock 12 Nov 2019
In reply to neilh:

Indeed. And it’s more fun and effective to donate your time than spend another days overtime on taxes. 

 ianstevens 12 Nov 2019
In reply to DancingOnRock:

Which is entirely different to just donating money. I've volunteered many hours of my time and fully understand why people want to do it. I also get the desire the donate to causes which are relevant to you and are out of the remit of the state. IMO, helping disadvantaged children and young people is something the state should be responsible for. 

 ianstevens 12 Nov 2019
In reply to DancingOnRock:

> It really isn’t. People with specific expensive  needs, simply can’t be looked after by a general system. Politicians will promise you they can, but they can’t because the systems required to administer would be too complex and full of red tape.

And a large charity that runs on £50m a year isn't large and complex?

 summo 12 Nov 2019
In reply to DancingOnRock:

> In any case it’s better to provide lots of people with some money than a few people with lots when it’s coming from general taxation. Charities like this are a much better way of dealing with specialised issues. 

What's your threshold how expensive should someone's care be for you to deem them not worth spending tax on?

Taxation, state funds should precisely be for those extreme examples of care that no individual could ever afford. 

For example; Much is often made of how Children in need money is spent giving families a break from intensive care regimes their child might require, this should certainly be state funded. 

Post edited at 12:56
 DancingOnRock 12 Nov 2019
In reply to ianstevens:

It may well be. But not as large as an organisation that’s running the whole country’s budget or a general health service for the masses that covers everything from coughs and colds to brain surgery. 

 summo 12 Nov 2019
In reply to DancingOnRock:

> Indeed. And it’s more fun and effective to donate your time than spend another days overtime on taxes. 

Sometimes it's expensive well trained people that are needed, not well meaning unskilled volunteers. A mix is required. 

 DancingOnRock 12 Nov 2019
In reply to summo:

I have no idea. That’s what the PCT do on a daily basis. It’s nice to offer people holidays with TAX payers money, but it would also be nice to spend that money on another person who needs intensive care. I don’t think sending people on holidays should really be the remit of the NHS. Ask a hundred people where they’d like their tax to go and you’d get 100 different answers. Set up a charity and let those people make that decision.  

 DancingOnRock 12 Nov 2019
In reply to summo:

Well yes. I was agreeing with his point on volunteering.

Gone for good 12 Nov 2019
In reply to DancingOnRock:

> So, on the contrary, I see people raising money for good causes as a good reflection of our society.  

Some people just love to hate the country they were born in. It seems to give them great pleasure in running it down at any opportunity.  The irony is half of them don't even live here any more. 

Back to your point. I whole heartedly agree that events like children in need are a positive reflection of the caring and helpful side of our society. 

Post edited at 13:42
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 Dax H 12 Nov 2019
In reply to ianstevens:

> And a large charity that runs on £50m a year isn't large and complex?

There is a big difference in complex being run in the private sector and complex in the public sector, in my estimation about 95% of the public sector managers I have worked with over the years couldn't manage their way out of a room with a door on each wall. 

In reply to ianstevens:

> What gets me is how people are willing to donate their money in this sort of fashion, but are completely against tax raises which could fund public services to help negate the issue in the first place.

Not only that but sign over the tax they have paid as gift aid thinking it is the right thing to do. 

No sir, the donkey sanctuary is not more important than the hospital, untick the gift aid box please. 

4
 neilh 14 Nov 2019
In reply to Presley Whippet:

Personal choice. People are entitled to different views  .

 DancingOnRock 14 Nov 2019
In reply to Presley Whippet:

Some people think the donkey sanctuary is more important than running our street lamps all night.

The point is - we don’t get to decide where our tax is spent. 

In reply to DancingOnRock:

> The point is - we don’t get to decide where our tax is spent. 

And that is my point. Allowing for a certain amount of noise around the peripheries, public expenditure is essential, charity is desirable. It is wrong to deprive essential services to fund desirable. 

2
 DancingOnRock 14 Nov 2019
In reply to Presley Whippet:

You’d have to donate your entire salary to charity to do that. 

In reply to DancingOnRock:

You have lost me there. 

 DancingOnRock 14 Nov 2019
In reply to Presley Whippet:

The government are quite happy to support charity by donating the tax you have paid on your donation to the charity of your choice. 
If it was truly a problem then they’d remove this option. 
Unless you are donating a significant amount of your salary, you’re still paying a big chunk of tax and there’s no way you are ‘depriving essential services’.

 wintertree 14 Nov 2019
In reply to Chive Talkin\':

One of the standout differences to me for children in need is that they pay out all of the money collected, and all required staffing is donated by various employers.

If the money was invested they’d have to pay salaries to investment managers, solicitors and all sorts out of the charitable proceeds.  At this point they need some middle management and a chief executive, all salaried out of charitable funds.  Before you know it it’s all sex parties and boondoggles.

 StuPoo2 15 Nov 2019
In reply to Presley Whippet:

I think that is a little unfair Presley.

What you are really saying there is "I, Presley, know how to spend everyone else's money better than they do - ban them from spending their money on anything I don't approve of unless my cause is fully funded".  

I get the point you're making - it would be nice to have a fully funded public service before people give money to charity - don't disagree. 

The nuance is that we don't all agree on the definition of a "fully funded public service".  Some of us would like a bigger role for the state, some of us would like a smaller role for the state, some of us would like the size of the state to stay roughly the same but the money to be spent in different ways with different priorities.  

I don't think it is possible or reasonable to ban people giving money to causes that are important to  them ... even if you disagree with their cause.

Post edited at 08:56
 john arran 15 Nov 2019
In reply to StuPoo2:

I think the critical difference is whether and to what degree, by facilitating a tax incentive for giving to what may be termed non-essential charities, the tax take that enables government to fund essential services is reduced.

Clearly if we were to take that to a ridiculous extreme we could end up with thousands of thriving donkeys and thousands of starving children. Clearly also, such a ridiculous extreme is only for the purposes of making the point.

I confess I'm not sufficiently au fait with the details or the scale of the Gift Aid scheme to have a useful opinion as to whether any reduction in general tax take as a result of it could be genuinely significant.

On a more wider point, relying on charitable donations to part-fund essential services is a poorly veiled transfer from a socially responsible system of progressive taxation to a flat-rate system that is only chargeable to those with a social conscience.

 StuPoo2 15 Nov 2019
In reply to john arran:

> I think the critical difference is whether and to what degree, by facilitating a tax incentive for giving to what may be termed non-essential charities, the tax take that enables government to fund essential services is reduced.

That's interesting and leads into the laffer curve:  https://en.wikipedia.org/wiki/Laffer_curve

Laffer curve suggests that there is a maximum limit on "giving"(tax), different per country, that the population is willing to "give" after which the population is liable to revolt and, in a democracy, vote in a government that promises lower taxes.

I'm not aware (I wait to be schooled) on any link between charitable giving and a reduction in the achievable tax rates that a government is able to excerpt on its subjects without risk of the population revolting.

 wbo 15 Nov 2019
In reply to StuPoo2: I am minded to think Presley makes a good point, and that the government ,  probably have a better idea of where money needs to be spent , what the essentials are , compared to a person picking their favourite 'fluffy' charity.  Moving the welfare state from being the responsibility of the government to being supplied by charities (often religious) may seem  a good idea, but the charities suffer from varying amounts of money (usually dropping when they're needed most) and also start to come with conditions - come to my food bank (after you've been to church and vowed off contraception).

The presence of charities is a good marker of public spirit, but it shouldn't replace/let off the hook the welfare state..

##The Laffer curve isn't nonsense, but I'd bet you can move the peak by 20% just by sending out the right propaganda. If you think your money is being wasted you complain , if you think it's generally well spent your tolerance is much higher

1
 DancingOnRock 15 Nov 2019
In reply to wbo:

That’s why charities exist. It’s not that the government don’t provide something because a charity does, it doesn’t provide something because it’s not in their remit to provide it. 
 

Do we want our tax money spent on rehoming donkeys in India, or saving old battery hens? I’d suggest not all of us do. 
 

Do we want our tax money spent on sending families of ill people to Disneyland? 
 

There’s room for both. It’s not an either or situation. You pay tax to cover what society have agreed is essential. If you want to provide something fluffy, then you can and theres plenty of money (from the £14bn income tax, which is only half of all tax collected ) to spare a few quid to save a few donkeys. 

Post edited at 11:26
1
 StuPoo2 15 Nov 2019
In reply to wbo:

I respectfully disagree wbo.  The current government of the day most certainly does not know better than I about how best to spend what they have received from me in taxation.   #brexit 

On a more serious note, I am of the opinion that the government does not advance taxation spending using a purely evidence based approach.  I think political spending decisions are corrupted by the incentive to advance policies that buy votes.  Turkey's don't vote for Xmas and few politicians would enact policies that would result in their removal from office even when they are in the greater public good.

FYI ... I'm not making the case to abandon taxation and replace it with charities.  I am really only making the point that I am aware of no evidence to support the idea that charitable giving reduces the willingness of the people to contribute to the state by the means of general taxation.  If it comes to light that there is evidence that every £1 contributed to charity results in £1 less collected in taxation ... then absolutely we have something to talk about.  

##I totally agree on the laffer curve.  The theory goes that more advanced economies (Nordics for example) can extract a higher tax threshold from their populations because A) the populations sees a lot back in return (it is visible what they are getting) and B) their population can afford to give it.  The flip side is, for example, developing Africa where the state is able to extract very little in taxation because progress is so very slow in what the people get back in return (invisible) and they have so little to give in the first place.

 Pefa 16 Nov 2019
In reply to Chive Talkin\':

Charities are a symptom of an unequal, selfish and greedy society run by the selfish and greedy using an unequal, selfish and greedy system. 

7
 DancingOnRock 16 Nov 2019
In reply to Pefa:

The scout association is a charity.  Just saying. 

 Pefa 17 Nov 2019
In reply to DancingOnRock:

The Pioneers wasn't. 

 DancingOnRock 17 Nov 2019
In reply to Pefa:

Exactly my point. Look what happens when a political party takes over an organisation. 

 Pefa 17 Nov 2019
In reply to DancingOnRock:

What happens? 

1
 DancingOnRock 17 Nov 2019
In reply to Pefa:

Generally the people who pay for something decide the direction the organisation takes. 
 

In the case of the Pioneers. The communist party. 
 

In the case of the Scouts it’s the members. 
 

If you belong to a climbing club (I don’t know if you do) would you think it’s a good thing if you stopped paying membership, stopped having committee meetings and volunteer leaders and instead the government took over the funding, the organisation, installed paid leaders and determined all of your activities and training from Westminster?

Post edited at 12:18
 Pefa 17 Nov 2019
In reply to DancingOnRock:

> Generally the people who pay for something decide the direction the organisation takes. 

True. 

> In the case of the Pioneers. The communist party. 

And everyone gets access free for all. 

> In the case of the Scouts it’s the members. 

Select members that can afford it you mean. 

> If you belong to a climbing club (I don’t know if you do) would you think it’s a good thing if you stopped paying membership, stopped having committee meetings and volunteer leaders and instead the government took over the funding, the organisation, installed paid leaders and determined all of your activities and training from Westminster?

I'm not a club type but if I was I would be more concerned about outdoor activities than admin. 

1
 DancingOnRock 17 Nov 2019
In reply to Pefa:

“And everyone gets access free for all.”

financially yes. But there’s a price to pay. Hitler Youth, like the Pioneers was originally The Scouts. 

“Select members that can afford it you mean.”

No. It’s a charity. 
 

“I'm not a club type but if I was I would be more concerned about outdoor activities than admin.” 

Quite, so someone in Westminster telling you when and where you can climb? 

Post edited at 19:10
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 Pefa 19 Nov 2019
In reply to DancingOnRock:

> “And everyone gets access free for all.”

> financially yes. But there’s a price to pay. Hitler Youth, like the Pioneers was originally The Scouts. 

The fascists copied the Red Youth clubs of Germany created by socialists during the 1920s, you can see this in Brecht's film Kuhle Wampe. 

> “Select members that can afford it you mean.”

> No. It’s a charity. 

OK point taken, but this charity is reliant on donations, so no donations one year then no club. 

> “I'm not a club type but if I was I would be more concerned about outdoor activities than admin.” 

> Quite, so someone in Westminster telling you when and where you can climb? 

You make a good point here with respect to big mountaineering attempts like Mount Elbrus in the Soviet sphere where you are correct indeed as official permission was required but on smaller day trips to crags and mountain walks I think local groups had the autonomy to decide for themselves just like Tey could with selected bicycle day trips etc. 

 DancingOnRock 19 Nov 2019
In reply to Pefa:

“OK point taken, but this charity is reliant on donations, so no donations one year then no club. “

That can’t be true because they do have multi-year grants that they administer so there must be some management of funds. 

 Timmd 21 Nov 2019
In reply to DancingOnRock:

The problem is, with the 'shrinking of the state' which been happening under the Conservatives, charities have been having to do what local authorities once did, and apply for government funding under whatever rules they're able to. Which means that they're in the position where if they grumble too much about how ably they are to carry out their roles, they can risk no longer being given the funding they rely upon to be able to continue help people. Which curtails the freedom of speech of charities (to a certain degree), regarding how much noise charities are able to make about particular issues, and leaves the people they're helping more vulnerable too. 

There was a programme about it on Radio 4 about 3 or 4 years ago, it was one of their Analysis episodes. The implications stuck with me, which is why I remember.

Post edited at 00:07
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 Timmd 21 Nov 2019
In reply to Timmd:

This is the blurb for the programme if anybody wants to listen to it. It's available still on the BBC R4 website. It was broadcast in 2013, quite interesting.

What Are Charities For? Analysis

Charities have been drawn into the world of outsourced service provision, with the state as their biggest customer and payment made on a results basis. It is a trend which is set to accelerate with government plans to hand over to charities much of the work currently done by the public sector.

But has the target driven world of providing such services as welfare to work support and rehabilitating offenders destroyed something of the traditional philanthropic nature of charities? Fran Abrams investigates.

Producer: Mukul Devichand.

Post edited at 01:30
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mick taylor 21 Nov 2019
In reply to Timmd:

Not wanting to bang my own drum, but I have researched the charity sector, income etc. and I am considered an 'expert'.  Mukul Devichand is talking rubbish, most income is from the public:

https://data.ncvo.org.uk/about/almanac-data-tables/

And payments via targets is an issue for a VERY small minority of charities.  

You do raise a good point about charities/campaigning/funding etc, but again, small minority.

An issue worthy of a new thread maybe.

 Timmd 21 Nov 2019
In reply to mick taylor:

Fair enough, that's reassuring to know. 


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