Is a charity 'fake' if it accepts State funding?

Harry Cole, writing here in the Guardian a few days ago, is one of a number of people who think that there is something fake about charities that accept contracts from the state to deliver services. His view is that we should be wholly or mostly funded by donations. Harry says:

"If a group can depend on the constant supply of gold from upstairs, then they don't need to bother putting their full efforts into fundraising and therefore lose out on the accountability and trust that comes from loyal donors, willing to withdraw their support if unhappy with results."

I'd like to make three points:

1. If charities can't properly demonstrate the impact and value of what we do, then no-one is going to give us the money to do it - no-matter how persuasively we ask. Any charity with state contracts can tell you that there is precious little gold, and we are held rigorously accountable - and rightly so - for every penny we earn. We are equally accountable to our beneficiaries and our donors.

2. The British public is generous, but it does not have the money, the will and the vision to fund all the vital services that charities deliver so well for their beneficiaries. Those of us working in stigmatised areas will tell you how precious our donors are to us because they are rare. I work for an HIV and sexual health charity and we're patient zero for the condition where "you've only yourself to blame".

So it's not easy raising money for an unpopular cause, and believe me, we raise as much  as we can. But some charities can't exist effectively if they rely solely on the popularity contest of public donations to fund their vital work. State funding is usually granted only on the basis of population need without the filter of personal interest.

3. Life for many of our beneficiaries is getting harder day by day as the recession bites into their personal finances and the services they rely on are being cut from under their feet. The cuts are limiting our ability to help, and levels of fundraised income are coming down, not filling the gap.

Have a look at this list of UK donors' most popular charities, just published by Third Sector. Excellent organisations, all of them, but this could be the limit of the voluntary sector without national or local state funding. And what a grim prosepct that would be for some of the most marginalised people in our society. Animals, bless them, would continue to do quite nicely.

 The top 20 fundraising charities, 2009/10

CHARITY	RANK 09/10	RANK 08/09	FUNDRAISED INCOME £(M)
Cancer Research UK	1	1	378.756
British Heart Foundation	2	3	195.671
Oxfam	3	2	182.300
Royal National Lifeboat Institution	4	4	145.600
NSPCC	5	5	123.719
Macmillan Cancer Support	6	6	117.963
British Red Cross Society	7	8	116.428
RSPCA	8	10	115.993
Salvation Army Trust	9	7	109.843
Sightsavers International	10	11	97.227
PDSA (People's Dispensary for Sick Animals)	11	15	79.023
Marie Curie Cancer Care	12	13	77.372
Save the Children (UK)	13	9	77.203
Royal Society for the Protection of Birds	14	16	74.059
Royal National Institute of Blind People	15	20	68.302
National Trust	16	12	67.699
Christian Aid	17	17	67.623
Royal British Legion	18	19	62.504
Dogs Trust	19	26	55.241
Guide Dogs for the Blind Association	20	18	54.457