4. Types of charities. 5. Do you qualify as a charity?

A report from the Directory of Social Change on the charitable donations made by major UK companies showed that on average the 100 leading UK businesses give 0, 4% of their profits to charity and community projects. In 2000 the business sector gave 4. 7% of 14. 5 bn pounds donated to charity. This compared to 34, 6% from the general public. Nearly all donations came from just 400 businesses, while nearly half came from the top 25 most generous.

Charitable giving is not the business of business. I agree with charitable giving and as a private individual I often give to selected charities. However, I object to someone else giving away my money, potentially to a charitable cause with which I don’t agree, without asking.

To be successful a business has to be mindful of the objectives and needs of the many stakeholders or the owners it belongs to. Charitable donations are made from profits and profit is the reward for risk taking. So people, who take risk in this or that business should necessarily know about charitable donations made from their own profits by appointed managers, who take control of the business.

By making charitable donation managers are making a number of assumptions:

1) Shareholders agree in principle with charitable donations.

2) Shareholders are sympathetic to the aims and needs of the specific charities they give to.

3) Shareholders have no better use of the money.

Shareholders who want to act in a charitable way can do so by liquidating a part of their increased wealth. The decision is, therefore, theirs. Managers making choices about charitable donations on behalf of others are exceeding their role.

In many cases business can gain many “benefits” which accrue as a result of charitable giving. Some examples might include:

- good publicity of many different kinds;

- improved relations with a local community and central government;

- improved employee relations;

In summary, businesses should give to charity. Whether they give for genuine reasons of altruism, or for reasons of building customer loyalty, scarcely matters. What matters is that charities benefit and society would be a poorer place without it. [24]

                                                   VOLUNTEERISM

In almost all modern societies, the most basic of all values is people helping people and, in the process, helping themselves. But a tension can arise between volunteerism and the state-provided services, so most countries develop policies and enact legislation to clarify the roles and relationships among stakeholders, and to identify and allocate the necessary legal, social, administrative and financial support. This is particularly necessary when some voluntary activities are seen as a challenge to the authority of the state, e. g. on 29th January, 2001, President Bush cautioned that volunteer groups should supplement, not replace, the work of government agencies.

There are two major benefits of volunteerism:

1.     economic: activities undertaken by volunteers would otherwise have to be funded by the state or by private capital, so volunteering adds to the overall economic output of a country and reduces the burden on government spending.

2.     social: volunteering helps to build more cohesive communities, fostering greater trust between citizens, and developing norms of solidarity and reciprocity which are essential to stable communities.

The social capital represented by volunteering plays a key role in economic regeneration. Where poverty is endemic to an area, poor communities have no friends or neighbours to ask for help, so voluntary mutual aid or self-help is their only safety net. This model works well within a state because there is a national solidarity in times of adversity and more prosperous groups will usually make sacrifices for the benefit of those in need. But there are difficulties when this is to apply across national borders. One well-meaning state cannot simply send volunteers into another state. This would breach sovereignty and deny respect to the national government of the proposed recipients. So, when states negotiate the offer and acceptance of aid, or requests for aid, motivations become important, particularly if donors may postpone assistance or stop it altogether. Three types of conditionality have evolved:

Some international volunteer organisations define their primary mission altruistically as fighting poverty and improving the living standards of people in the developing world, e. g. Voluntary Services Overseas has almost 2, 000 skilled professionals working as volunteers to pass on their expertise to local people so that, when they return home, their skills remain. When these organisations work in partnership with governments, the results can be impressive. But when other organisations or individual First World governments support the work of volunteer groups, there can be questions as to whether their real motives are poverty alleviation or wealth creation for some of the poor or policies intended to benefit the donor states. This confusion exists because experience shows that what is volunteered can distort the foreign and economic policy of the country receiving the aid. The economies of many low-income countries suffer from " industrialisation without prosperity" and " investment without growth". This arises because " development assistance" guides many Third World governments to pursue " development" policies that have been wasteful, ill-conceived, unproductive or even so positively destructive that they could not have been sustained without outside support.

Indeed, some of the offers of aid have distorted the general spirit of volunteerism, treating local voluntary action as “contributions in kind”, i. e. as conditions requiring local people to earn the right to donor “largesse” by modifying their behaviour. This can be seen as patronising and offensive to the recipients because the aid expressly serves the policy aims of the donors rather than the needs of the recipients.

The track record shows that making any aid conditional on policy reforms is often ineffective. Conditionality only works when there is a strong domestic commitment to reform and the recipient governments are democratic, i. e. they are accountable to their own electorates. Volunteer organisations and their funding donors should respect the governments of the countries they wish to help and build on the deep-rooted traditions of people to help one another, and thereby provide an important ingredient for social and democratic development. [35]