Public benefit

Charities in the UK are waiting for a definition of ‘Public Benefit’.  A spotlight is on whether schools which have charitable status and charge substantial fees are benefitting the public as well as educating the children of (mostly) wealthy parents.  I would like an answer to a much bigger question.  Do we get value for the tax that comes form the public purse in the form of Gift Aid in the UK? 

 The question is also under discussion in the USA where the tax deduction is an article of faith for philanthropists.  It’s a contest of billionaires as described recently in the New York Times.  Eli Broad, a billionaire, says “The public benefit is significantly greater than the tax benefit an individual receives.  Smart entrepreneurial philanthropists get greater value  for their money than if the government were doing it.”

 But William H. Gross, also a billionaire, wrote in his investment commentary “When millions of people are dying of AIDS and malaria in Africa, it is hard to justify the umpteenth society gala held for the benefit of a performing arts center or an art museum.  A $30 million gift to a concert hall is not philanthropy, it is a Napoleonic coronation.” In an interview he said “I don’t think the public would vote for spending tax dollars on these things.”

I suspect that the public think that charities should primarily help those in need.  In fact, we all know that people give to charities that address issues that have touched them personally, not necessarily to those that help where the need is greatest.  Gift Aid and the tax deduction translate into the public allowing individuals to decide how to allocate money on their behalf.  Sometimes very large sums of money.

 Tax breaks reduce government revenues; and tax breaks enhance the giving of private individuals to their personal interests - the wealthier you already are the more help you receive.  I would like to see a public benefit debate about that.