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Osborne’s major donor doo-doo

Apr 12

Posted by Kirsty in Society, Westminster | 6 Comments

Disclaimer: When I’m not co-editing Better Nation I’m a professional charity fundraiser, and my work includes major donor giving. I write here, as ever, in a personal capacity.

David Cameron has promised to consider charities’ calls to dismiss plans in the Budget to cap tax relief on charitable donations.

At the moment, whenever basic rate taxpayers donate to charity, whatever they would have paid in tax goes to the charity as well – all thanks to the little Gift Aid box you usually tick on a donation form. For higher rate taxpayers, some of the tax due goes to charity (the amount of tax due under basic rate) and the rest (on the higher rate) can be reclaimed by the individual. The Treasury wants to cap the amount which can be reclaimed to £50,000 per annum.

Of the £11 billion given to UK charities last year, almost half came from only 7% of donors. Attempting to end tax loopholes should be commended, but it is foolish to penalise the people who help ensure this country has the arts, education, museums and, I dunno, the Big Society it merits.

The Conservatives themselves are trying to boost private giving to the arts. Osborne’s Budget in 2011 added a new tax break for charitable giving, allowing anyone leaving 10% of their estate to charity to reduce their inheritance tax bill from 40% to 36%. In this situation, charities rightly feel wronged by Osborne’s decision.

It is the major arts and education institutions that largely benefit from major donor giving. In Scotland, the principals of five universities and the directors of National Museums Scotland and the National Galleries of Scotland have called on the UK government to scrap its tax relief cap. It is unlikely the revitalisation last year of the National Museum of Scotland or of the Scottish National Portrait Gallery could have been completed without measures like this to encourage major donor giving.

Other charities are of course affected too, and the SCVO is supporting the ‘Give it back, George’ campaign, while major Scottish philanthropists like Sir Tom Hunter and Sir Ian Wood have warned the move will have a ‘disastrous’ effect on charitable giving.

I have worked in encouraging major charitable donations. Part of my previous job was trying to figure out why wealthy people would be motivated to support the capital project I worked on, and I wrote and rewrote many guides to demonstrate this tax relief opportunity which Osborne wants to end.

I don’t think any of these guides were ever used in meetings with potential donors.

Russ Alan Prince and Karen Maru File wrote a book in 2001 called The Seven Faces of Philanthropy. Like most fundraising, it’s good common sense. People have different reasons and motivations for giving, and they can be summarised in seven different types:

1. The Communitarian: Doing Good Makes Sense
2. The Devout: Doing Good is God’s Will
3. The Investor: Doing Good is Good Business
4. The Socialite: Doing Good is Fun
5. The Altruist: Doing Good Feels Right
6. The Repayer: Doing Good in Return
7. The Dynast: Doing Good is a Family Tradition

I have met donors across all seven faces, and number three, the one who thinks about the tax advantages of philanthropy the most, shows up the second least often. (Number seven, The Dynast, is the least frequent, but I think that’s more to do with a difference between British and American philanthropy.)

Should philanthropy happen without financial inducements? Ideally. Of course. Will it happen as often? I doubt it. Several beneficiaries of major philanthropy, like UNESCO and the National Theatre, have already reported that large pledged donations are threatened by this move. Charities are squeezed right now: rising inflation, falling income, increasing demand for services. To make a change like this – even if most major donors don’t consider it before giving –  without prior consultation with charities literally wipes millions from predicted incomes going forward, affecting future plans and service provision.

I would like the Treasury to do more, a lot more, to end tax avoidance. Some people are probably funnelling funds to made-up charities to benefit from this relief. But for most major donors, who are giving a lot of money for their name to be etched in stone forever on a wall somewhere, for everyone to see, including HMRC, isn’t really what I consider the behaviour of a tax dodger.

Nationalist journey to independence may be disrupted by Asch cloud

Feb 7

Posted by Jeff in Constitution, Society | 13 Comments

The Asch conformity experiments of the 1950s were a series of studies that demonstrated the power of conformity in groups.

The fascinating details can be read here but the summary is that, in group situations and despite a contrary clear correct answer, individuals are disposed to providing an incorrect answer against their better judgement if they are conforming with a clear majority view.

From Wikipedia:
Solomon Asch hypothesized that the majority of people would not conform to something obviously wrong; however, when surrounded by individuals all voicing an incorrect answer, participants provided incorrect responses on a high proportion of the questions (32%). Seventy-five percent of the participants gave an incorrect answer to at least one question.

The famous experiment proved that people are more likely to opt for something that they don’t necessarily believe in if a number of people before them, even if they are strangers, opt for that same choice.

This may well be a hint at the battle ahead right up to Autumn 2014.

For Nationalists, the challenge is to persuade Scots to conform to the notion that Scotland as an independent country is merely conforming with a world view of where our constitutional borders should be drawn. It is tantamount to asking the following: ‘Complete the sequence: Sweden, Norway, Ireland, Denmark, Finland,… That’s right. Sc-… Scot-… You can say it to us, everyone else has.’

On the unionist side, the rat-a-tat-tat of conformity is just as unrelenting: ‘Stronger together, weaker apart. Too small, too stupid. Stronger together, weaker apart. To small, too stupid. Stronger together, weaker apart… Say it back to us, come on…’

The above is precisely why I hope that every Scot who is eligible to vote in this referendum takes a quiet moment to themselves, away from the bluster, the blogs and the b*llocks, has a conversation with themselves deciding what it is that they want from their country going forwards and, crucially, that they stick to that decision come what may right up to voting day.

As far as I am aware, every meaningful poll on Scottish independence has shown lower than 50% support in favour of a Yes vote. However, mindful of the Asch experiments, there is a strong argument that these polls unfairly increase the likelihood of the next poll delivering the same result, irrespective of what people may really think on the inside.

There was a time, not so long ago, that to admit that one voted for the SNP was akin to having a stain on your character. You were a narrow-minded, caber-tossing, bagpipe-playing isolationist if you voted SNP and you weren’t allowed to forget it. The SNP has of course largely managed to cast off that reputation when it comes to elections to Holyrood but to what extent does it still exist within Scotland when it comes to the independence question?

When Lord Ashcroft is concerned that there is bias in the referendum process then he uses his money and privilege to publicly highlight this with a useful poll. However, a not dissimilar bias, and a potentially more significant one, exists the other way but there is no poll that will quantify, let alone qualify, the impact of the press, the main political parties and the business leaders with vested interests lining up to instruct the public to conform to their particular view.

Asch has proved that meek conformity will be a factor in this referendum, at least to some degree. We should ignore this at our peril.

For Theirs is the Kingdom of Heaven

Nov 11

Posted by Kirsty in Economy, Society | 24 Comments

I would’ve liked to have been a wee fly on the wall when Alex Neil defended Scottish Government anti-poverty policies in front of the Church of Scotland’s Commission on the Purposes of Economic Activity this week.

I would’ve been intrigued to watch as the Cabinet Minister for Capital Investment put forward policies like the home building programme as evidence of job creation and poverty reduction. Firstly, because The Scotsman can’t seem to decide whether the commissioners found Neil’s responses “disappointing” or “impressive” (anyone who can untangle this journalistic model of clarity get back to me in the comments).

But my curiosity is mainly piqued because there’s scant opportunity at present within Holyrood to see the Scottish Government really defend their policies against a well-thought, robust critique.

Scottish Labour is still revolving around the broken tactic of opposition for opposition’s sake, and it is neither robust nor well thought-out.  A brief scan through the last week’s press releases from Holyrood’s official opposition indicates that the SNP are responsible for just about every economic ill north of the border.

Assuming The Scotsman’s report on the Minister’s talks with the Church of Scotland Commission isn’t entirely garbled, Neil’s claim that Scotland doesn’t have enough powers to tackle poverty and unemployment does seem to stand up, ironically since nothing seems to be standing up against the Tories’ bulldozing of any of the fragile edifices of social justice this country previously had.

The Church of Scotland’s Commission on Economics is one of many endeavors by civic Scotland aiming to understand the root causes of poverty in Scotland and to propose workable, effective solutions. Led by Professor Charles Munn OBE, the Commission will report in February 2012 on fundamental ethical questions underlying economic activity, on which the Kirk can influence change.

The two-year Poverty Truth Commission reported in April 2011, with an impressive legacy for implementation, even when considering just the Scottish Government: persuading civil servants to now engage with and involve those with direct experience of poverty in policy development; to work together with kinship carers to address the needs of children.

Quoted in the report, Jim Wallace, the former Deputy First Minister, said: “Through the Commission I have become convinced that we are more likely to identify solutions to some deep-seated problems if politicians and officials involve those who experience the reality of poverty in their daily lives. That is the challenge to policy makers and those who deliver public services at every level of government.”

I don’t think the challenge of tackling the abhorrent scale of poverty in Scotland is misunderstood or underestimated by the Scottish Government. I don’t think Neil runs to the adage of ‘more powers’ for the hell of it – I think they’re needed, and I think Scotland’s poverty proves why. But I think even without a debate on what powers and when, it’s obvious the Coalition Government in Westminster and their spending plans – a “reckless gamble on people’s lives” – severely restrict what Scotland can do to alleviate the suffering of too many people in our country.

I am glad Scottish Government, and Ministers like Neil, have to discuss and defend policies in front of movements by Scottish civic society. Whether it’s the Kirk’s Economics Commission, the Poverty Truth Commission or the Scottish TUC’s Better Way campaign, the need for people to reveal the pain of the recession and demand change is crucial. It’s also heartening in Scotland that we have an established church firmly on the side of the 99%, unlike elsewhere.

Every government needs to be held to account, because it is in the dialectic of proposing and defending policy that better decisions are made. Civic Scotland does this extremely well, and Scottish Government should, and mostly does, listen.

But if the only source of this critique is civic Scotland, it indicates it’s time Scotland’s political opposition realign themselves. You can’t claim to be a movement for social justice but keep resorting to student union-esque baiting by press release of bad news for the SNP. After all, the rest of Scotland is getting involved to find ways to work with, thoughtfully debate with, and constructively disagree with the Scottish Government and its work to tackle the causes of poverty. Why not those elected to hold them to account?

RTing @patrickharvie’s #MOTW

Oct 21

Posted by Jeff in Holyrood, Housekeeping, Society | 2 Comments

Every Parliament needs one and for Holyrood that role has fallen to Patrick Harvie of the Greens. I am talking, of course, of the necessary drive to open up Parliament and make it accessible to as many people as possible.

So, Patrick’s common sense but nonetheless unlikely to be taken up suggestion of allowing social media to be used in the Scottish Parliament chamber is this week’s motion of the week:

Motion S4M-01085 – Patrick Harvie (Glasgow) (Scottish Green Party) : Social Media in the Scottish Parliament
That the Parliament notes the decision of members of the House of Commons to permit the responsible use of mobile devices and social media in the debating chamber; considers that debates would not benefit if members used electronic devices in ways that did not relate to the subject under debate; notes, however, that members are already expected not to read in the chamber printed material that is unrelated to the debate and that a similar rule could apply to the use of electronic devices; considers that the use of social media during parliamentary debates can be a way of engaging the public in the political process and can enhance democratic participation, and would welcome consideration of a possible change to the Parliament’s rules by the Standards, Procedures and Public Appointments Committee, the Presiding Officer and members themselves.

Supported by: Humza Yousaf, John Park

I have no doubt that there is a lot of really great debate that takes place at Holyrood that doesn’t see the light of day. It gets typed up by a secretary and sits on the records until the end of time.

How much better would it be to have rip-roaring debates going live online, pulling punters in that would otherwise be uninterested in political debate? And yes, I’m largely thinking of Twitter here but Facebook and blogs could be updated from within the Chamber too. Why not?

The online discussions around First Minister’s Question, BBC Question Time and Leader Debates are excellent fun while still being substantive. The only thing that tends to be lacking is the people in the room, the people taking part in the discussion, also taking part in the online debate.

Patrick Harvie gets a bit of stick for being Holyrood’s Twitterer-in-Chief but he is pushing the boundaries of what Holyrood can be and who can access it and, for that, and for many other reasons, we salute him.

Interns are not workers

Oct 19

Posted by Guest Blog in Economy, Society | 12 Comments

A guest post today from Barry McCulloch. Barry is an independent policy consultant. Currently, he is the Policy Manager at the Centre for Scottish Public Policy (CSPP) and the Policy & Communication Officer at the Economic Development Association for Scotland (EDAS). He hates acronyms yet uses them daily.

There is nothing quite like feeling passionate and angry on a wet, dreich Monday. I’m usually foaming at the mouth reading about internships at the best of time, but Nick Cohen’s excellent article in the Observer has (almost) pushed me over the edge.

Before launching into a polemic it’s worth pausing and providing a bit of context. In November 2009 graduate unemployment was spiralling out of control – youth unemployment was approaching one million, a fifth of whom were graduates.

Essentially, it was making a difficult task (obtaining a paid internship in Scotland) even more challenging in an underdeveloped “intern industry”. And there was little assistance to help Scotland’s struggling graduates.

With no funding the Centre for Scottish Public Policy (CSPP) created the Adopt an Intern programme (excuse the ancient site – a new one is on the way). The aim was simple: to build a fair, accessible and transparent internship culture in Scotland. Fast forward two years and 107 paid internships have been placed with the assistance of Scottish Government funding and employer contributions across the public, private and third sectors.

It has been a huge success and the programme is now offering intern exchanges between Germany and Scotland. But enough about the CSPP. As Cohen’s article painfully points out, they are only scratching the surface. Quite blatantly there are deep-seated and regressive cultural attitudes to internships.

Interns, so the argument goes, require experience in the labour market so do not deserve to be paid. They are a different type of employee who is not protected by the Minimum wage or the Equal Pay Act. Thus, their terms and conditions can be altered at the whim of an employer. As new Defence Secretary Philip Hammond (the richest man in the Cabinet) said:

“I would regard it as an abuse of taxpayer funding to pay for something that is available for nothing and which other Members are obtaining for nothing.”

How frugal. It is no surprise, then, to find new companies popping up to provide free interns and quell demand. One of the companies Cohen highlighted is Etsio. Curiosity got the better of me and I checked out their website. Honestly, I wish I hadn’t.

The FAQs section is worth quoting in detail because it’s illustrative of the norms and values embedded in London’s internship culture. I couldn’t resist adding some comments.

“Candidates

Why should I pay for a job?
You aren’t paying for a job (yes you are). You’re buying experience. Most applicants we come across don’t have any experience that would make them useful to our employers (students don’t have work experience? I don’t know what graduates they know).

And remember that our work experience clients are putting themselves at risk by exposing their trade secrets, customers and inside information to you. That isn’t the kind of experience that you can get elsewhere.

How much do I have to pay? (Yes, they have to pay for the privilege)
Each employer sets their own daily fees.

Employers & Interns

Is it ethical? (No)
With students now paying £40,000 for a university education – but zero useful experience for an employer – we don’t think it’s unreasonable for them to pay a few hundred pounds to get invaluable real life experience.

And many of our employers are small businesses who wouldn’t normally take on an intern. Etsio opens up the market to whole new areas. And applicants get to see how real businesses work. (If you or your parents can afford it)

It’s definitely morally suspect for an intern to take the place of a worker; and that happens all over the Western world at present. But (a big BUT) the Etsio service allows applicants to get a ringside view of what it’s like to work in the amazing businesses that feature in Etsio.

Is it legal? (No, not if they are indeed workers)
Yes. It’s a legal requirement to pay workers a minimum wage. But the interns are not workers: they don’t have regular tasks, they aren’t under the control of the employer, and they can come and go as they please. The intern is paying to learn, just as they pay to attend university. (All of this is complete and utter nonsense).

How does Etsio make its money?
By adding a small admin charge. It’s included in the fee that’s shown against each employer. There are no other charges.”

There is no shortage of organisations or politicians (a certain Mr Clegg comes to mind) that could have been named and shamed. The list is long, very long and by no means is it restricted to England (see Kezia Dugdale’s article). The exploitation of interns (graduates who will become critical to the success of the national economy) will continue until we settle some basic, fundamental questions:

  1. If interns are not workers then what are they?
  2. What rights do interns possess in the workplace?
  3. Should interns be paid (at least) a Minimum wage?
  4. At what point in the internship does an intern become an employee? 6 months? 9 months? A year?

The dictionary defines a slave as “a person who works in harsh conditions for low pay”. I’ll let you decide on whether an unpaid intern is a slave. But one thing we all should be able to agree on is this: paid internships, a “proven access point to professions”, are central to making a fair, equitable and mobile society.