Cut dependence on grants to 'unleash a tide of philanthropy', says Cass professor

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Cut dependence on grants to 'unleash a tide of philanthropy', says Cass professor 13

Finance | Niki May Young | 27 Jan 2011

The Big Society will only emerge when the government cuts the sector’s dependence on grants and strips regulations to “unleash a tide of philanthropy”, according to Cass Business School’s Philip Booth.

Booth, who is the university’s insurance and risk management professor and also editorial and programme director at the institute of economic affairs, made his comments through the Conservative Home Comment pages this morning in regards to rumours that the government feels the Big Society programme has stalled. “It is not surprising,” he said, “The coalition’s idea of the Big Society often seems to involve no more than getting a few people round a table to discuss how the government can design the Big Society.”

What it should involve, he suggests, is a radical “rolling back of the state”. “Welfare,” he said, “flourished when the state was not responsible for welfare”. The same is true in finance, he added, and philanthropy:

“There seems to be a relationship between how socialistic a country is and the amount of philanthropy it generates – having the government put its hand in its citizens’ pockets is a substitute for people putting their own hands in their own pockets,” he said.

While Booth admits he has little faith that the government would demolish the welfare state “any time soon”, he believes the action is practicable for charities: “(The coalition) can create the conditions in which philanthropy can thrive.

“The government should resist the calls to fund the Big Society by giving more grants to charities – this will just make charities clients of the state, but it should strip away the regulations that surround charities and encourage charitable giving.”

Accusing the Big Society plans of being “corporatist”, Booth calls for the government to have faith in both the sector to run its services and in the UK public to give:

“The Government wishes to work with businesses, charities, individuals and local government to engineer the Big Society. It looks rather like the model we used to run our economy in the 1970s,” he said. “However, the Government really should let go. It should develop policies that will unleash a tide of philanthropy.”

Booth makes his comments amid rising unrest over the Big Society agenda with Labour MP Graham Jones accusing the scheme of "failing charities" and NCVO chief Sir Stuart Etherington voicing concerns over its capacity for positive change.

Directory: Cass Business School

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Karen Hart
31 Jan 2011

Booth suggests that "The Big Society will only emerge when the government cuts the sector’s dependence on grants and strips regulations to “unleash a tide of philanthropy”, and also suggests that “Welfare flourished when the state was not responsible for welfare”. When and on what planet did this happen? Is he thinking of Dickensian times perhaps? We need to be working towards a progressive society where we strive with intelligence and wisdom for a more sustainable and equitable society.
An unregulated free market in the finance sector brought the country to its knees - we do not need ill fitting business models to do the same in the charity sector - we need a society built on strong foundations - not shifting tides and quicksand.
If you are a politican, impressed with business gurus, please contact me and they will "lead you through the streets of London, I'll show you something to make you change your mind". (Ralph McTell).

[Reply]

John Marshall
CEO
Centrepoint Outreach
3 Feb 2011
Response to [Karen Hart ]

I agree with Karen. But whilst we are at it... can we please drop the term 'Big Society'. It's crap terminology! I don't want to live in A big Society. I want to be part of a 'Caring Community' - where people live 'IN Community'. It's Poverty and Homlessness action week! I'll lead you through our Drop In centre. We had 42 sleeping rough - on the street, sofa surfing, dossing here and there last month. The official Local Govt. street count figure is 6! It shocked them when 13 turned up on the 1st night of the local churches cold weather night shelter!

[Reply]

Jane Taylor
29 Jan 2011

That would be the 'wave of philanthropy' that leaves the streets of Berkeley in California lined with beggers ... homeless, rootless, and many of them suffering from the after-effects of illness ...

[Reply]

Carl Allen
none
none
28 Jan 2011

Standing in the shadow of the hill of returns so as not to see the mountain of risk is that professor.

[Reply]

Edward Keogh
Retired
None
28 Jan 2011

Having lived in that great bastion of private sector benevolance, aka the United States of America, I can only repeat many an Americans' opinion of Prof. Cass belief in private funded charity: Hogwash!

[Reply]

Barney Mynott
NAVCA
28 Jan 2011

It is depressing how often we see this sort of story where someone chooses to associate grants with dependency. How is there any less dependency with a contract or any other form of funding. He really is showing he is behind the debate. I think he needs to read the Local Grants Forum's 'Defending Local Grants' leaflet. http://www.navca.org.uk/NR/rdonlyres/0C1A3369-C77C-4E77-8A27-8C23AD0BC37E/0/LocalgrantsPDF.pdf

And as to the idea that grants will stall the Big Society - when I look around I see a lot of local voluntary and community action. This activity wasn't invented in May 2010 (nor in 1997) and experience shows that adequate funding is not the thing that usually makes it stall.

[Reply]

Bob
28 Jan 2011

Let's see the Professor take some time out of academia and actually work with some 3rd sector organisations - perhaps 2-3 years.
Once he better understands the challenges faced by real people (beneficiaries) and deliverers (organisations providing the services the beneficiaries rely upon,) he may well decide his purely theoretical hypothesis based on times gone by is not worth the paper it is written on.

[Reply]

Andrew Pring
Information Officer
28 Jan 2011

I am someone just made redundant from a charity that gives funding advice to those in the Big Society the Government is failing to support.
The best thing Professor Philip Booth of the Crass Business School could do for the sector is put his money where his mouth is and pay me £20,000 a year to continue to provide this service as I have done for 10 years until the latest Government cuts.

[Reply]

Peter Horah
Vice Chair
CAYSH
28 Jan 2011

If these comments had come from someone who was ignorant of the history and reality of social care and welfare in the UK, it could be forgiven.

As a duty of care for its citizens, the State should act when markets fail and only the State and its agents can ensure that money collected through taxation is re-distributed fairly, equitably and with accountability.

Of all the sectors in the economy that need careful managing, Charities are extremely vulnerable if funding is suddenly withdrawn. It is a dereliction of duty to abandon service delivery agents who have been coaxed, pushed and even bullied by Governments to take on the responsibilities outsourced by local and national governments during the past 30 years.

Professor Booth may want to give a vision for a state-less, philanthropic society - but he will never have to deliver it!

[Reply]

David
28 Jan 2011

Cut dependence on grants 'unleash a tide of philanthropy' <- Rubbish! Self promoting nonsense.

Philanthropy can never replace the government funding needed to reach those furthest from the labour market, the DWP Work Programme is a nightmare for the voluntary sector to try and deliver as subcontractors.

It transfers the risk is impossible to cashflow.

The big society remains to be realised as anything other than rhetoric

[Reply]

Adrian Beney
Partner
Iain More Associates
27 Jan 2011

Interesting. From the US there is no evidence whatsoever in the Higher Education sector that diminishing state support was correlated with increased philanthropic funding. Indeed evidence that does exists suggests the opposite is true - those universities which were of higher quality (and this tended to correlate with level of funding per staff or student) were able to attract proportionally more money. Donors want to give to something good, not to prop up something that isn't

[Reply]

Paul Johnson
27 Jan 2011

To quote: "There seems to be a relationship between how socialistic a country is and the amount of philanthropy it generates – having the government put its hand in its citizens’ pockets is a substitute for people putting their own hands in their own pockets."

This is absolute utter nonsense - the fact of the matter is that the Government has its hand wedged so tightly in pockets up and down the country, that donors are so reluctant to give thanks to a double whammy. The rise in the cost of living and the increasing uncertainty over jobs.

And as for the 'Big Society' - pure smoke and mirrors.

[Reply]

Carl Allen
27 Jan 2011

No wonder the financial system ran into crisis when the professor of risk and insurance is out of his depth.

[Reply]

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