There was an item on today’s BBC World at One (15th September 2022) on the subject of wealthy people giving money to charities. This giving has become quite substantial and with the drop in street collections and a decline in funding by local authorities, it might be thought a good idea. To the extent that an individual charity gets a donation from a wealthy individual it is no doubt a good idea especially if we are talking about smaller scale local activity. But the wider implications of this activity were not explored by the BBC interviewer.
Many corporations are involved in exploitative actions. The use of sweatshops – children being employed seven days a week as was found in a factory supplying GAP and Nike – environmental damage and other practices which damage people or the environment.
A large number of corporations also make extensive use of tax avoidance strategies which deny host governments billions which could be spent on schools or medical facilities. Giving thus becomes a veneer for what they should be paying. They also get significant tax relief on charitable giving which means a gift of £1 actually costs them 45p.
Who they give to depends on the whim of the corporation or CEX and considerable sums go on pet projects including their university or the arts. Very little goes to the poor.
A further question is that it reinforces the notion of corporate and private sector superiority. Public bodies – whether it be the government or local authorities – are not to be trusted with money raised by taxation, but I, a corporate chief, know best what’s needed and how best to do it. So, I am happy with my sophisticated tax arrangements and I will select a charity to give money to. I will also gain kudos from the gift and favourable publicity to boot.
None of this means charities should turn away corporate donations except in the case of the truly awful firms where the risk of taint may become a real problem. But we should all be aware of the true situation in a world where major corporations exploit the weak in the search for profit and care little for how goods are made or produced. Major UK household names were found to be using cotton produced by Uyghur slaves in China for example. Charities just have to be a little wary in playing a part in what is termed ‘reputational management’.
It’s important to add that the firm being interviewed, Patagonia Clothing, is a genuine giver to charities and the reference to reputational management does not apply.
I devote a chapter to the question of public v. private in my book ‘How to be a Successful Trustee’. ISBN 978-1-913012-61-8