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kv Blogs
21 June 2017

The Problem with Government Charity Funding

At first glance, the idea of governments giving monetary donations to charity can seem rather harmless. After all, most people see the benefits of supporting charitable causes—why shouldn’t the government put our money to good use? However, a closer look reveals that governments funding charities can create conflicts of interest and even breed corruption within the charities themselves. Here, the Tej Kohli Foundation examines the problems that arise through government charity funding, and how they can affect society as a whole.

Recently, the UK government faced criticism after granting £250,000 to an anti-abortion group. The money in question was raised from the 5% VAT on tampons. Clearly, this presents a conflict for women who pay the tampon tax but do not support anti-abortion causes.

Instances such as these arise frequently when allocating government funds to charities, as charities reflect specialised interests. Taxpayers want to feel they have a say in where their money goes, and they certainly don’t want to contribute to causes that don’t align with their beliefs.

In some ways, charities themselves are negatively impacted by government grants. As government funding is limited, charities often have to compete for money, and this competition fosters corruption of all sorts. In addition, charities compete with each other for clients—many non-profits cover the same issues and need to constantly outdo each other in order to work with the people who can keep their causes going.

This is not to say that charities are not making fantastic efforts. Their contributions impact every aspect of our society, from education to the environment, and many advancements are a direct result of non-profits. With our varied lifestyles, political associations and backgrounds, it’s only natural that the specialised interests of some charities do not represent each and every person in our country.

However, it could be time for a call for more transparency in charities and better reporting of income sources—or perhaps it’s best to implement stricter regulations on government grants. There are a number of ways to tackle the problems with government charity funding head-on, and dealing with these problems can ease the discontent.
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Could the solution to conflicts in government aid be to leave the funding of charities to private donations? The Tej Kohli Foundation is entirely funded by Wendy and Tej Kohli, operating autonomously to help children break the cycle of poverty and learn about technology. This method of funding allows us to allocate our funds to the causes that we believe need it most. It eliminates the taxpayers’ dilemma, but it also significantly reduces the backing of charities that rely on public funds.

Which path will the government take in approaching the problem of charitable funding? While the future of non-profit aid is unclear, it is certain that a change must be made to the current system to avoid the discontent caused by mishaps such as the tampon tax donation scandal. If we fix these problems now, our charities can do even better, more effective work in their respective fields, focusing on the possibilities of the future instead of the complications of the present.