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Shawcross: Charities at risk of over-dependence on the state

William Shawcross, chairman of the Charity Commission. Image credit:Fergus Burnett
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Shawcross: Charities at risk of over-dependence on the state2

Finance | Vibeka Mair | 29 Nov 2012

Some charities risk becoming too dependent on the state, the new chair of the Charity Commission has warned, saying there needs to be debate on whether the charity register should make clear how an organisation is funded.

In William Shawcross' first speech to charity sector at Acevo's annual conference, he said that "charities should not become junior partners in the welfare state", stressing that the independence of the sector is vital.

"Charities which get state grants or contracts from government must be independent and focused on their mission," he warned.

"Independence is about making decisions only on the basis of the best interests of the charity and its beneficiaries. Not the interests of funders - including government. Charities operate in a complex environment and are in ever fiercer competition for funding and contracts to deliver services. This competition is not a problem in and of itself. It may help drive innovation and keep charity trustees on their toes. But I wonder whether this development also places great strain on trustees to make decisions on behalf of their charities. These decision must be independent and reflect the interests of the charity only - not the interest of funders."

He suggested that some charities risk becoming too dependent on the state, adding that most members of the public would say a charity was an organisation funded by private donations not public funds.

Shawcross referred to a recent speech by the chief executive of the Charity Commission, Sam Younger, who warned that the charity brand was becoming "diluted". He said there needed to be a debate on whether the register of charities should make clearer what an organisation does and how it is funded.

In his speech, Shawcross also defended charities' right to campaign, saying such activity had a long tradition in the UK.

Christians have 'formed the backbone of civil society'

The new chair also addressed recent political attention on the Charity Commission and the registration of religious charities. He said an MP had asked him if the Charity Commission had a plot to secularise British society. "This is not the case," he said.

"People of faith - particularly Christians - have formed the backbone of civil society and charitable giving in this country for at least a thousand years," he said. "The suggestion some have put forward that the Commission is seeking to overturn centuries of law and culture by questioning the charitable status of religious charities is, quite simply, wrong."

He also said that the Charity Commission had to know the limits of its role, agreeing with Lord Hodgson's view that the Commission is a regulator, not a friend. "The Charity Commission should be a friendly policeman," he said.

 

JB
3 Dec 2012

"He suggested that some charities risk becoming too dependent on the state, adding that most members of the public would say a charity was an organisation funded by private donations not public funds."

The public are 100% wrong on that one and it would be in everyone's interest for the Charity Commission to educate the public that being a charity is solely a function of what an organisation does, not how it is funded. Funding from state sources in the broadest sense has been a fact of life for many, many years and there is nothing in principle wrong with it. Some charities would not exist in their current form without it.

There is a potential problem which is that charities can be unduly influenced in the way they operate by funders whoever they be - although the state is potentially more likely to attempt to influence. It is readily arguable that one major part of the charity sector - universities (which being exempt charities are not regulated by the Commission) - have long been unduly influenced by their state funders with the honourable exception of the University of Buckingham which has always refused state funding with all the restrictions it imposes.

Chris Zealley
trustee
charities various
30 Nov 2012


William Shawcross has brought forward a problem that has concerned many of us in recent years. Outside state funding the obligations on trustees are clear. They are on their own on their funding needs. They know where they stand. State funding has blurred trustees' obligations and created a new class of charity which swings between financial happiness and financial misery, at present misery.

Rather than endless debate about this obvious and familiar problem, what is needed is intelligent cockshys at solutions. The most important question is how to make safe the traditional values of a charity. Only that way will 'the brand' be saved from confusion and a deteriorating public opinion.

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