Can we have faith in charities?

News of charity staff receiving perks should force us to re-examine the system, says Chris Blackhurst

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We are a strange lot. We like giving money to stately homes, lifeboats, furry animals and feathered friends in this country but we are not so keen on old people, children, causes of sickness and soon-to- be-extinct wildlife overseas.

The furore over the size of administration and other expenses at charities such as Baby Lifeline and the Guide Dogs for the Blind Association has highlighted our curious attitude. We make voluntary donations of billions of pounds a year; we give to those charities who shake their tins loudest - often without questioning whether they need our cash - and we turn a blind eye as to how well they are run and how much cash gets through to the cause we are supporting.

This bank-holiday weekend - one of the biggest on the charities' calendar with fetes and events up and down the land - will be another fundraising blockbuster. In the autumn, the television appeals will begin in earnest again, raking in yet more money. Then comes the build-up to Christmas with gift catalogues, cards, fairs and a concerted blast of carol-singing, tin-rattling and conscience-pricking.

Yet we never stop to look where the money goes, whether some charities are more deserving than others, whether they are spending our money wisely. Anyone who has given generously to the Guide Dogs for the Blind, upon reading that the charity had handed out pounds 2m in interest-free loans to its staff to help them move house, must have felt their blood boil. Likewise, how many donors to Baby Lifeline knew that only 16p of every pound given was being spent on hospital equipment.

The Guide Dogs charity brushed off criticism, saying that there was no secret about the scheme as it was all in their annual accounts. Yet how many donors ever see such accounts? Worse still was the response of the Charities Commission, which has the task of policing all the charities. It said it had known all along about the loans scheme but it would be "consulting" the trustees of Guide Dogs for the Blind to ensure that "everything is still OK".

Such an attitude begs the question: if the watchdog allows the staff of one charity to have interest-free loans, what does it allow the others to get up to?

Guide Dogs for the Blind may be the only charity to have been exposed as being so generous towards its staff, but it is not alone. Like several large charities in Britain today, it is awash with cash: pounds 184m in net assets at the last count.

Long-established, appealing to our love of animals or heritage, they have long since outgrown the ambitions of their founding fathers or, in some cases, the purpose for which they were intended. According to latest figures from Charities Aid Foundation (see table), the National Trust rakes in more than Save the Children and Help the Aged combined. Lifeboats bring in almost twice the amount as old people. Between them, the Royal Society for the Protection of Animals, and the Royal Society for the Protection of Birds earn five times more than the Leukaemia Research Fund.

Head and shoulders above all the charities is the National Trust with an income last year of pounds 144m. Its figures are awesome. They include: memberships, pounds 75m; covenants, pounds 31.5m; legacies, pounds 24.5m; rent and investment income, pounds 34.6m.

Yet nobody in authority ever appears to question what the National Trust is doing or what it really stands for. Its shops and image - everything about it, in fact - are aimed at the tweeds and brogues of middle England. The entry prices it charges are prohibitive for families - not that the trust does much to encourage people with young children. It now has more properties on its books than it can open to the public. Some make sumptuous homes for staff. But the Charities Commission does not seem to mind.

Charities are now such big business that it is time for their regulator to be given a helping-hand. Every month, hundreds of accounts from charities up and down the land arrive at its offices. How many of them are properly checked and how many of their premises are visited by commission staff can only be guessed at.

This year, charitable tax exempt status will cost the Exchequer pounds 725m. That is not the amount the charities will receive in income but the estimated size of their bill if they were to pay tax. Their total income is nearer pounds 2.5bn.

Earlier this year, the commission issued a list of 200 "large" charities which would now be monitored by its newly formed "large charities unit". When asked what lay behind the move, a spokeswoman said the commission had traditionally had specialists covering the small charities and felt the time was now right to take a closer look at the big ones. This sounded like an admission from the commission that until now it has done very little about the biggest charities, believing them to be above board and financially correct, and preferring instead to concentrate on the new, small bodies that spring up, take people's cash and then disappear. If so, that is a deeply alarming admission.

There is a case for overhauling the whole charitable system. The list of 200, for instance, contains organisations that have little to do with helping the needy and a lot to do with benefiting one already advantaged section of society. The College of Law, Dulwich College, Harrow School, Institution of Civil Engineers, Oundle School and Royal Masonic Hospital are all listed by the commission as being among the country's 200 largest charities. They all take up the commission's time and resources to administer.

What the recent Guide Dogs and Baby Lifeline episodes show is the need for an urgent overhaul of the charities system. Few of us will have time to look at their accounts, but we all ought to look across the range and see if there is not another body in more urgent need of our money.

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