Time to Rethink Charity

Charities are in the news. Many seem to be failing, failing as businesses, failing in standards or failing in their role as advocates. Standing back, we can see two tendencies, one very negative, the other potentially positive, although currently much weaker.

The negative trend in the UK is the on-going collapse of the public and voluntary sectors and the invasion of large private organisations who are privatising Whitehall, the NHS, schools, local government and even the voluntary sector. For some this is called ‘modernisation’ but it is hard to see what is so modern about disastrous and corrupting inefficiency of projects like the Public Finance Initiative, the Work Programme or the inane procurement regimes which drive out community organisation and true innovation.

Again and again we find that when the public sector tries to harness the ‘dynamism’ of the private sector it often finds itself on the losing side of the deal. This is not surprising, when one side of the deal comes motivated to maximise profit, while the other is just following procedures, then expect a mess. Neither side is to blame - oil and water do not mix.

One of the saddest features of this collapse is the way in which so many charities, many with long and noble histories, have found themselves climbing on board the privatisation bandwagon. Today many charities are no more than inefficient private business - with high CEO salaries, poor terms and conditions for staff and bureaucratic cultures. There is nothing dynamic and creative about this new kind of voluntary sector - often there is nothing particularly voluntary about it either.

However this is not the full story. There are also a new forms of organisation emerging, ethical businesses, who do not just focus on profit; and community organisations that are dynamic, entrepreneurial and creative. For organisations like these the old charity model no longer seems to apply.

This old charity model still dominates our legal structures, and it fits into an understanding of civil society which goes something like this:

1. The public sector provides core public services - from policing to healthcare. The sector is managed and controlled by politicians, who are accountable to the public (every few years).
2. The private sector provides services or goods that people pay for. It is commercial and focuses on profit. It survives only when we buy what it offers.
3. The charity sector harnesses our citizenship, enabling people to give, time, money or passion to supplement core public services.
4. In particular the governance of charities must be voluntary, for this is meant to make it immune to the profit motive (and hence it is protected from corporation tax).

This model may have worked reasonably well in the past. But it is not clear how these distinctions hold when:

• Government stops providing services and starts to buy them (what is called commissioning).
• Instead of services people are given budgets to buy their own support (what is called personalisation).
• Some business are choosing ethical objectives (what is called social enterprise).

It would be easy to declare the whole thing a farce, to dissolve the distinctions and to leave the market to sort everything out. Let people and government buy what seems best, let businesses grow, transform and become ethical. Let charities wither, if they no longer offer ‘good value’.

But, as G K Chesterton said, “Don’t ever take a fence down until you know the reason it was put up.” In this case the reason for the strong distinction between the profit motive and the ethical motive is that it doesn’t take long before the profit motive wins hands down. Profit enables businesses to buy political influence, control and even the appearance of being ethical. This is the reason that the likes of SERCO, A4E and G4S keep winning contracts from the public sector, while the small, the local and the ethical struggle to survive.

Instead of abandoning the distinction between the profit-seeking and the charitable it may be better to redefine it. In fact there may be a much better distinction available to us.

Today, when we use the word ‘market’ we usually think only of commercial exchange - buying and selling. The term has become captured by narrow liberal economics. However if we go back to ancient Athens and revisit their version of the market - what they called the ‘agora’ then we find, not just commercial exchange, but a whole range of human activities: teaching, praying, playing, politics, government. The agora is a public space and it was marked off by a series of sacred marker stones which could not be moved and beyond which no private property could be claimed.

So Athens, one of the most creative and fruitful places in human history, protected its public spaces from private enclosure. However Athens did not put all of the activities of the agora under control of the ‘demos.’ It was not public (or democratic) control that made something public - it was its appearance in the public space. It was the transparency of these affairs, as opposed to their privacy, for privacy is the essence of the private. The agora was a space in which we came outside and behaved as individual, diverse and interacting citizens.

As an aside, it is interesting to note that the assembly, where the people met to make democratic decisions in together, was actually outside the agora - on a hill called the Pnyx. The Pnyx overlooks both the agora and the Acropolis, which was also a distinct site, and which was protected for the sacred purpose of worship. The agora, the space for free citizen action, was therefore distinct from both those areas where people came together to act as a whole people - in making decisions or worshipping God. The agora was plural, diverse and sacred.

Can we then replace the profit-voluntary distinction with a different public-private distinction?

Perhaps we should distinguish what makes something public from what makes something private, and in particular we should work hard to define and protect those things which are public - which we all share together - from those things that are private.

Here are some thoughts on what measures we might use to guard the public:

• Local - Things that are rooted in the local are more reliable than the national or international where only a brand, a logo or profile is visible.
• Transparent - When we aim to serve the public we will be quite happy to let people know our salaries, our savings, our funding and our workings.
• No copyright - If we are interested in the public interest we will not want to protect private property rights and milk citizens for years to come.

Perhaps a further advantage of this approach might be to help us think about what David Miliband used to call "double devolution” the shift in power back to people and to communities. Devolution to the individual means that some public services need to be converted into private entitlements - in particular incomes sufficient to meet our basic needs. However other public services need to be converted into public goods - resources that communities themselves can examine, support or transform.

In this way we can overcome the reductive simplifications of Marxism with its ludicrous suspicion of private property and the very natural human activity of trade. Yet we can also remember that we also need public goods, safeguarded from the invasion of the private, that there to be enjoyed - in one way or other - by all of us.