Bill Carmichael: Poverty of ideas behind shame of the charities

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IT has become clear over recent months that many of our big charities – up to now highly respected household names – have behaved completely disgracefully in their fundraising efforts.

They have bullied and constantly badgered generous donors, targeted vulnerable and elderly people, including those suffering from dementia, sold the personal details of their supporters to con men and generally used high pressure sales tactics that would make your average double glazing salesman blush with shame.

After a series of scandals – including the suicide of a 92-year-old poppy seller who was bombarded with up to 200 charity begging letters a month – we finally saw some action this week to curb the wild excesses of our big charities.

A government-commissioned review recommended stricter regulations for fundraisers and tough sanctions, such as banning cold calling or mailshots, for those charities that consistently break the rules.

There will also be a new regulator with increased powers, funded by the big charities, and a central register where donors can opt out of receiving calls and mailshots.

Not before time – although it may be too late to rescue the reputation of the charity sector. Many of them decided that squeezing more revenue out of their donors, using whatever disreputable means necessary, was more important than playing fair with their supporters.

But perhaps it is worth asking at this point if the big corporate charities – those that operate like big businesses with executive pay packages to match – actually do any good?

Take Africa for example. The continent has received as estimated $60 trillion (about £40 trillion) in aid over the last 60 years, mostly donated by western taxpayers and administered by the big charities and NGOs.

But this has done little to alleviate poverty. The number of Africans living on less than $1 a day has doubled in the last 20 years. A quarter of the countries in sub-Saharan Africa are now poorer than they were in 1960.

Zambian economist Dambisa Moyo believes Western aid has been an “unmitigated political, economic and humanitarian disaster” for Africa, and she claims corrupt politicians have pocketed much of the money.

Contrast this with many Asian countries that have received comparatively little but have made huge progress in defeating poverty. Fifty years ago South Korea was as poor as Ghana; today per capita income in South Korea is $32,000 while in Ghana it is $3,100.

Why the difference? It can be explained in one word – capitalism.

Countries that have adopted free trade and free market policies have seen huge increases in economic growth that has lifted millions out of poverty.

Over the last 20 years a billion people have been taken out of extreme policy – not by the actions of charities or government aid - but by the action of free market capitalism.

It is clear the key to eradicating extreme poverty lies in trade, not aid.

Yet Britain’s charity sector is unrelentingly hostile to free markets. It constantly campaigns for higher taxes, more regulation, increased government interference and increased barriers to free trade – precisely the policies that have kept Africa mired in poverty for decades.

Perhaps our charities need to think hard – not just about the vile tactics that got them into so much trouble – but about their entire strategy toward the world’s poor.

Pass it on

A THIRSTY rugby fan on his way to the Australia versus Fiji game this week was stuck in a packed train en route to Cardiff and was unable to get to the buffet car to buy a drink.

What did he do? He wrote a note on a seat reservation ticket saying “I’m stuck in coach D, please buy me a beer from the buffet car and send it back” and sent it down the aisle with a £5 note.

Incredibly enough, according to newspaper reports, 20 minutes later a can of beer was passed back through the train to the man in coach D – although it isn’t clear whether he got any change or not.

If any of the teams at the Rugby World Cup can show that kind of teamwork, then they’ll have the championship in the bag.