When Iceland’s banking system imploded in October 2008, charities with investments there lost about £80m. Ever since, they’ve been trying to get that money back. But last week the government ruled that charities would not be compensated for their losses. If they’d invested money in Iceland, the Treasury said, they’d never see it again.

You’d think that, on hearing this news, the charities affected would get busy fundraising to make up their losses – and take the decision graciously. After all, companies in a similar position never even had a chance of getting their money back.

Instead, however, the charities have got cross. Very cross. In an astonishing turn of events, the charities have lashed out at the Treasury for its supposed meanness. The boss of Cats Protection, one of those affected, says he is “absolutely furious” at the decision. The hospice Naomi House’s CEO said that she was “thoroughly disgusted” on hearing the news.

For my part, I am repelled by that attitude. The charities seem to think that – purely because they are charities – us taxpayers owe them something. But this is self-evidently an unreasonable demand. Why do charities feel entitled to make it?

When asked, the charities have no good answer. But they do have excuses (PDF). First, they mumble that their voluntary nature makes them ill-placed to make investment decisions. But they ignore the fact that the Charity Commission near-as compels charity trustees to take professional advice when faced with such knotty problems.

Next, they say that they do good work that’s put in jeopardy by the losses. That’s true, but does nothing to explain why taxpayers should stump up the missing cash.
And finally, they assert general moral authority. What sort of country is it, they ask, which lets charities suffer from their own bad decisions?

These arguments are entirely bogus. Charities spend a good portion of their collective existence trumpeting their independence from the government, flaunting it as one of the voluntary sector’s key strengths and defining characteristics.

But when things go wrong, they seem to say, this much-trumpeted independence must be put to one side. When charities make foolish decisions, they argue, the government – not the charities themselves – must bear the consequences. This is hypocritical. And it demonstrates a self-righteous attitude that does nothing but damage those charities’ names.
 

 

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