Despite the rise of the welfare state, the private charities continue to flourish and to attract the donations and voluntary labour of millions of individuals.

In this contribution to the CIS Social Welfare Research Program, the authors argue that the charitable organizations are uniquely equipped to provide the ‘hands-on management’ that alone can tailor assistance to individual needs and provide the necessary incentives to restore recipients to independence. They propose to expand their role through a bold scheme that goes beyond existing tax relief on voluntary donations and would allow taxpayers to direct their welfare dollars away from the state and towards the private charities of their choice.

Competition between the welfare state and the voluntary welfare sector, as well as between the charities themselves, would help eliminate waste and maximize the effectiveness of the social security dollar.