Stop throwing money at people's ludicrous pet charity projects

The government is to spend £120m matching charity donations. But it already throws absurd amounts of money at charities. It shouldn’t spend any more supporting people’s pet projects.

It is hard to keep up with the endless idiocy pouring out of party conference season. But one idea that hasn't had much attention yet comes from the sometimes perfectly sensible Justine Greening. She has announced plans to provide "match funding" for various aid projects.

This means, as the Independent puts it, that in the "run up to the next election" some £120m will be spent by the government on contributing to charity appeals. But that is to be only the beginning: "eventually Dfid expects to roll out the scheme to much smaller charity appeals including for instance those run by local churches and Rotary Clubs".

The idea here, says Greening, is that the government will be "taking the aid priorities of the public" and making them theirs too. That sounds nice. But it is, of course, ludicrous.

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For starters, the government already chucks absurd amounts of money into the charity pie every year. Gift aid already costs the UK Treasury over £1bn every year. That's £1bn that the average taxpayer didn't ask to contribute to other people's pet projects, and £1bn that the average taxpayer also has to come up with via the payment of yet more ludicrous taxes.

It's also not all the exchequer loses to charity don't forget that charities pay no income tax or CGT on their investment gains. That adds up too. Every penny that goes out in tax relief or match funding for charity is a penny that isn't available to pay for the core services we like to think we pay our taxes for (schools, infrastructure, the health service, etc). So why on earth put more in?

There are lots of fabulous charities in the UK. There are also lots of truly terrible and utterly pointless ones. We'd be much better off if, as a nation, we want to contribute to the likes of the World Food Programme if we skipped the nonsense and complications of gift aid and matching, cancel all relief to most charities, and have the state directly support the programmes it prioritises. You can read my past blogs on this matter here, here, and here.

PS As I have said before, if we must have tax relief on charity giving (and I really don't think we should) it is, I think, time to distinguish between what is a charity that fits into the brief of the state, and should therefore be considered a deserving charity, and what is not.

Soup kitchens? Yes. Cancer research? Mostly. Literary festivals? No. Opera? No. Theatre? No. The Brownies? No. Youth clubs in deprived inner cities? Yes. Donkeys? No. Red Squirrels? No. Think tanks? No. Save the Rhino? No. Private schools? No (a voucher scheme would be better). Personal/family foundations? No. Horse Sancturies? No. You get the idea.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.