The scale of the charity sector should not be underestimated: there are some 168,000 registered charities in England and Wales which, together, attract an annual income of £76.7bn, and provide essential services at a time where governments are stepping back both nationally and internationally. However, Charity Commission studies show that public trust and confidence in the charity sector is falling.
This is seen, in part, as a response to high-profile cases such as the Oxfam scandal in January 2018. That case (and a number of others) have highlighted what the Commission considers to be ‘systemic weaknesses’ in the way that charities in England and Wales operate. The Commission understands that charities rely almost exclusively on the goodwill of the public and its plan is intended to address the public’s concerns.
Baroness Stowell, Chair of the Charity Commission, announced the details of the new strategy and spoke about the need for registered charities to not only do charitable work but also carry out that work charitably.
The Commission’s five year plan sets out five key strategic objectives, which are to:
- hold charities to account
- deal with wrongdoing and harm
- inform public choice
- give charities the understanding and tools they need to succeed
- keep charities relevant for today’s world.
Holding charities to account
The Commission’s view is that “individual charities are custodians of something bigger than themselves”. With the privilege of charitable status (which confers the advantage of tax breaks as well as other legal benefits) comes a responsibility to live up to the high expectations of the public rather than merely complying with the minimum legal requirements.
Dealing with wrongdoing and harm
The plan admits that the Commission’s current processes for complaints handling is slow, and provides some guidance for how it will approach wrongdoing going forward by making a distinction between its ability to deal with wrongdoing once it’s happened, and its optimism for implementing processes which could thwart potential wrongdoers at an earlier stage.
Inform public choice
The Commission’s current website holds basic information on registered charities, including a charity’s name, trustees, objectives and often a summary of its finances. The plan suggests that the Commission will look into meaningful ways to demonstrate to the public the difference that each charity makes to its beneficiaries. The plan also states that where there are gaps or duplication within the sector, the Commission will encourage mergers, joint enterprises and partnerships.
Give charities the understanding and tools they need to succeed
A common theme throughout the plan is the idea that the Commission positions itself as more than the sector’s regulator. One strategy to advance this is to proactively publish advice which describes good practice rather than guidance that is prohibitive in nature. Under this limb, the Commission also reiterates its commitment to encouraging charities within the same sphere to collaborate or merge.
Keep charities relevant for today’s world
The plan recognises that the Commission is leading the sector through a turbulent period, including the possible economic ramifications of Brexit and rapid technological advances. The Commission does not currently influence government policy, but the plan describes its desire to draw on its expertise, experience and data to shape the agenda in the future.
The key theme that emerges from the plan is the Commission’s desire to participate in the sector as more than just a regulator. In particular the announcements underline the Commission’s plan to lead from the front in changing the culture and systems of the sector. It is also interesting to note the multiple references the plan makes to improving efficiency by encouraging collaborative behaviour between different charities.
If you are considering merging, collaborating or partnering with another charity, and would like to discuss your options with us, please get in touch with Liz Brownsell or another member of the Charities and Social Enterprise Team. Law covered as at October 2018.
This article is from the October 2018 issue of Essential Trustee, our newsletter for charity trustees and senior management. To download the latest issue, please visit the newsletter section of our website. Law covered as at October 2018.
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