Wednesday 23 May 2012

Chuggers, there's nought in it!

What exactly is a billion, confusingly a billion may refer to two different numerical scales. 

Long Scale 1,000,000,000,000 
In the long scale billion refers to a system of large-number names in which every new term greater than million is 1,000,000 times the previous term. So a billion means a million millions.

Short Scale 1,000,000,000 
In the short scale refers to a system of large-number names in which every new term greater than million is only a 1,000 times the previous term. So billion in this case means a thousand millions.

Here in the United Kingdom for hundreds of years we used the long scale. However in 1974, the government of the UK switched to using the short scale in its official usage. Overnight large numbers of the UK's poor millionaires were converted into rich billionaires.

A recent item to hit the headlines is the worth of some of our charities. Some of the more affluent charities are currently described as billionaires under the current government description. Now this might seem to be a surprising statistic, we all give money to charity in the expectation that the money will be used for charitable acts and not for stacking up in the bank for a rainy day. Albeit we have just experienced the wettest drought since records began.

So how much do the charities currently have set aside in their coffers?

Nick Hurd the minister for "Civil Society" (Little brother to the Big Society?) says a cool "£95,000,000,000" in real money terms. 

So why do the charities have all this dosh sloshing around in banks at a time of record low interest rates? 

The reserves have been built up because of the predicted change in public giving. It was forecast quite some time ago that there would be a downturn in charitable donations from the public. So the the money savvy charities needed to set aside reserves to be able to continue to operate in a reduced cash flow environment.

Nick Hurd the Minister for "Civil Society" predicts a drop of more than "£1,000,000,000" in public donations a year.

The reality is, its not a good time to be starting out with a new charity on a life of charitable begging from the public. Now is the time to be tightening the belt for all existing charities. For many charities the downturn has heralded a time when they need to go out and get even more aggressive in raising the much needed charitable donations. 

For some charities getting the funding is a life and death situation in more than one sense. But every cloud has a silver lining. For the chugger operators its a time of plenty. With more charities like BW/CaRT looking for their help (at a not insignificant cost) to raise a share of the ever scarcer charitable donation pot.

To help the situation, the government has done two things.

1)  Set up "Big Society Capital" with £600,000,000 in funds to invest in charities. However, the charities who dip into this fund will have to make a profit on the investment to pay back to the investors.

2) Instituted in the last budget a crack down on tax relief on charitable donations.

You could not make it up!

So what does the future hold for CaRT and its charitable status for the Inland Waterways. I expect the drought to continue in more ways than one for a long time to come. 

Will CaRT go under, certainly not while the bottom is so near the top! So now you know, that's why BW has ignored the maintainable backlog for so long.

See Previous Uber-Chugger and Chugger Numpty


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