Awarding change-making in the 19th century style & other weekly stories
Which is more important – being a charity… or being a change-maker? Yesterday had very interesting discussions at Estonian Tax and Customs Board. Our Income Tax Law was just changed in a hurry by the Parliament. Unfortunately, despite constructive input from civil society advocacy organisations the criteria for public benefit status is now perfectly suited… for the 19th century thinking of charitable acts.
You know, “any entrepreneurial activity is bad” and “all the resources must directly go to those in need (preferably cats, dogs and children)”. As a result, public sector decision makers seem to express its view that citizens engaging in small good deeds are more valuable than – for example – citizens engaged in creating long-term jobs for disabled persons at social enterprises.
Luckily, the Board is able and willing interpret the criteria liberally. However, the learning point is that much explaining is still to be done how the creation of social change must be organised to be effective. A charity that delivers Christmas presents to every orphanage sounds great but in reality changes nothing (as receiving a big Christmas present is the least of the problems facing any child in any orphanage). Of course, such campaigns can be undertaken by private individuals or companies if they wish – but the state should not award such non-effective activities with public benefit status. The state should give public benefit status to sustainably scalable organisational forms (e.g. social enterprise) that have at least a theoretical potential to create positive change in long-term.
Untapped potential: state should buy quality and impact, avoiding the long-term negative (incl monetary) consequences of following the lowest price only
While yet another handicraft workshop or community center can be cute enough, I´m eagerly hoping that more Estonian social enterprises start soon using the change-making opportunities provided by modern technology
The discussion whether social enterprises should be allowed to pay dividends or not gets deeper every month
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