As a society we elect a government to make decisions about how to spend our collective pot of money – the taxes we pay. Our elected government chooses to invest a certain amount on medical research, spends a bunch of dollars on fixing particular social problems and redistributes a large proportion of tax money to create a safety net for those who are unable to support themselves.
We do this because, as a nation, we have a general belief that people should be able to be safe and healthy regardless of their social and economic position.
Apart from being a nice thing to do, universal physical and economic security is absolutely essential to a prosperous and pleasant society for everyone. Nobody wants to be accosted by beggars in the street, and nor do they want to be there. Doctors don’t generally enjoy patching up victims of violence and – masochists aside – humans tend to avoid pain where possible.
Sometimes the collective pot of money just doesn’t stretch to cover the number of causes available to support. Sometimes people simply fall through the cracks in the system designed to help them.
This is where charities step in – to fill in the gaps.
How the government supports charities
Charities don’t fill the gaps all by themselves. The government funds them indirectly by letting them keep more of the funds they raise. The ATO has a handy little table of charity tax breaks here.
The government also encourages us to donate to charity. Every time you make a donation of over $2.00 to a registered charity you get to claim it on tax. Let’s say you’re in the 30% marginal income tax bracket – that means that for every $2.00 you donate to charity, the government is effectively kicking in $0.60 by allowing you to not pay income tax on that amount.
Why this system is unfair
Everyone has to pay tax (okay, that’s a pretty broad statement, given recent revelations of large non-tax-paying corporations, but bear with me).
Donating to charity is purely up to personal choice. Around one-third of taxpaying Australians choose to donate to charity each year – amounting to $6.8 billion in 2014. Unlike taxes, which requires wage earners to hand over money to the collective pot in line with their earnings, charity-giving is disproportionate across society.
A Fairfax analysis of the data showed that ‘[a]mong taxpayers who claim a deduction for their generosity, the proportion of money given away by low-income earners is 11 times higher than that of wealthy taxpayers.’
Charities which plug gaps when they shouldn’t need to
Many charities have a dual purpose:
- to raise awareness and/or effect social change – think BeyondBlue
- to raise funds.
It’s understandable when we’re raising funds for foreign aid – we have no control over how their government spends their collective pot of money, so we might want to target aid at particular sections of society that the foreign government might not want to fund. Perhaps their foreign collective pot has even run dry.
But local charities? Unless they’re only for the benefit of a minor section of society – think fundraising for new uniforms for the local footy team – shouldn’t they be funded from the collective pot? Shouldn’t we all just put a bit more into the pot to make sure it’s fair? Why should two-thirds of taxpayers get out of contributing to services that are essential to keeping everyone safe and healthy?
Let me paint the picture for you. Here are a few – incredibly worthy – charities which make me thoroughly furious by the very need for their existence in Australia.
Good Friday Appeal
The Royal Children’s Hospital Good Friday Appeal has been a major feature of the annual charity calendar since 1931. This year it raised a whopping $17,445,624.38.
The funds are “used to purchase medical equipment, and fund research and scholarships.”
To purchase medical equipment? For the hospital that treats kids with cancer and other life-threatening illnesses? Really? Surely we can choose to throw them an extra $17.5m from the collective pot and make sure that 100% of taxpayers are helping fund this essential service, rather than just one-third.
The Nappy Collective
The Nappy Collective collects unused nappies twice a year (May and October) all around Australia. They redistribute them to organisations that support families in crisis or in need.
Why do they do this? Because there are women who flee violent homes. With babies. And they can’t even afford nappies to keep their baby’s bottom clean and dry.
This happens in Australia every single day.
Why has a charity sprung up to plug this gap? Why on earth aren’t we funding this from the collective pot?
The Smith Family
The Smith Family knows that education is key to breaking the cycle of poverty, so they support children from disadvantaged backgrounds to get an education.
What does this mean, you ask? Are they sending them to posh private schools? Paying for extra tuition?
No, they’re asking you to sponsor a child for $48 per month so the child can have enough money for “school uniform, proper shoes, textbooks or the next school excursion”.
Really? In a country as wealthy as Australia, can we not manage to give disadvantaged kids a basic education out of the collective pot?
Do you donate to charity?
What other charities do you think we should abolish altogether and fund from the collective pot (ie. taxes)?