He is right to highlight the emergence of 'not-for-profit' service providers and to question how 'voluntary' they are. He is right to warn against the loss of independence which the 'contract culture' can bring and to point out that some of the most exciting voluntary action takes place at local level through community-based and user-led initiatives. He is also right to warn against the angers of national charities becoming over- bureaucratised and unresponsive and to highlight the need for charity law reform.
But he is wrong to suggest that abolishing charitable status and institutionalising the distinction between service providers and local campaigning groups is the solution, and he is wrong to recommend tax concessions on the basis of performance criteria.
Arthritis Care and many other charities combine service provision and campaigning and rely on voluntary donations, as well as occasional statutory funds. We remain responsive through being controlled by our membership and involving our users. Our charitable status and independence are important to our donors and supporters, both as an incentive and as an endorsement.
Perhaps a better prescription for the problem identified by Mr Knight would be to require charities to raise a certain proportion of their funds from public donations and grants (as opposed to contracts for services) and to strengthen charities' accountability to their users. This would separate charities from not-for-profit service providers functioning as agents of the state and encourage charities to be less paternalistic and more user-led.
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