Is it right that benevolent funds replace state funding?

Joe Irvin, chief executive, NAVCA

The state cannot expect charities to replace funding they cut. Many funders of charities explicitly say they will not fund charities replacing statutory services. If charities just replace the state we risk damaging public trust.

But there is a grey area. Some services, such as women's refuges or advice services, can be inadequately funded by the state. Charities already support services in some areas that are paid for by local authorities elsewhere.

And charities have always responded to changing situations – as they are with public funding cuts. Although there should not be a need for food banks in society, it is positive that people want to help those unable to feed themselves or their families.

Independence is key. Charities are there to support the people and causes they serve – not to do the state's bidding. Public bodies must work with charities to understand local problems and work together to tackle them.

Dan Corry, Chief Executive of New Philanthropy Capital

It is right that benevolent funds do what they feel they can to help in these straitened times and it is understandable why organisations such as local councils might look to them for funding. However these funds cannot replace the welfare state, if nothing else due to the scale involved.
Of further concern is the fact that where previously some benevolent funds were looking to fund early intervention—to stop people experiencing health and social problems in the first place—they are now being forced back to funding short term amelioration, which is not a sustainable solution.
In these tough times and with further cuts on the way we are all under pressure to do more with less, but the Big Society simply cannot catch everyone who falls through the welfare safety net.

Jacinta Belai, author of ACO research report Changing for Good 

Whilst 60 per cent of funds say the boundary between state funding and discretionary funding is becoming increasingly blurred, benevolent funds do not replace state funding. The majority of funds see their role as that of providing short-term support in times of crisis.

In fact, funds are increasingly moving away from providing long-term grants to individuals in need and moving instead toward empowering individuals with the provision of non-financial support in the form of for example, assistance with applying for statutory support and advice.

Rather than being seen as a replacement to state funding, funds see their role as providing vital and timely support for individuals who fall on hard times, who would otherwise turn to prohibitive options such as payday loans.

Further, in providing non-financial support, funds not only help individuals access state funding but also signpost them to other services that they may not have been aware of.

Peter Maple, course director Management in Civil Society (Charity Marketing and Fundraising), London South Bank University

The obvious answer is clearly NO. Charities must never let government off the hook by replacing benefits that recipients have a right to.

However, the reality is very different. As the retreat of government gathers pace it is inevitable that charities (including ‘benevolent societies’) help people no longer being helped by the state. Is this actually replacing state funding or picking up the pieces of a government displaying cognitive dissonance?

When government ceases to help the most needy, can charities stand by, wringing their hands, or are they morally obliged to try and make a difference? Why has the huge growth in food banks happened in the last three years? The Trussell Trust estimate that they will help feed nearly 300,000 people this year. In 2013 this is an outrage.

It’s not right to replace state funding, but when it’s simply not there, what’s the alternative?

Frank Prochaska is a historian and author with a special interest in philanthropy

In the 1980s, about 10 per cent of charitable revenues came from government sources. Today, it is approaching 50 er cent, which represents a growing takeover of charities by the state in a devolved form of collectivism.

The essence of a voluntary society is its independence and autonomy. As benevolent institutions become agencies of government, they take on the priorities of their paymasters at a cost to their independence.

The issue is not simply one of funding the social services, but of our civic democracy. Tension between the state and the voluntary sector is both desirable and invigorating, and this tension is being eroded by government funding.

The political maturity of a country is not measured by the size of government, but by what citizens willingly do for themselves and for one another. It is not only right for benevolence funds to replace state funding--it is a pressing necessity.

This article first appeared in The Fundraiser magazine, Issue 28, April 2013