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Mixed future for service delivery charities, says Leather

Finance | Ian Allsop | 1 Mar 2007

Over 60 per cent of charities with annual income over £500,000 deliver public services on behalf of public authorities, but over 40 per cent of all charities doing so are not paid the full cost involved, according to new Charity Commission research. Ian Allsop reports.

Stand and deliver: the future for charities delivering public services presents the results of the first ever all-charity survey into charities delivering public services. The findings include that over two thirds of all funding agreements for public service delivery are for only one year, while only 12 per cent of charities say they achieve full cost recovery for all public services they deliver. Just over a quarter of charities delivering public services felt they were free to make decisions without pressure to conform to their funders� wishes. Two thirds of charities with income over �10 million that deliver public services rely on it for between 80 per cent and 100 per cent of their funding. Over 60 per cent of charities not currently delivering public services would not consider doing so in the next year.

Launching the report at NCVO's annual conference, the Commission's chair Dame Suzi Leather said that the findings confirmed that charities delivering public services face hard choices. 'Short-term funding, partial cost-recovery and the risk of mission drift are a reality for many undertaking this work. With 88 per cent of charities failing to achieve full cost recovery for service delivery, statutory services or not, can we really sustain the belief that this can be in the best interests of charities, beneficiaries, or the sector as a whole? The future for public service delivery by charities needs careful consideration. Charities can bring something unique to service delivery but their independence must not be compromised by short-termism or expediency, either by government or by charities themselves.'

The report coincides with the publication of the Commission's updated guidance CC37 - Charities and public service delivery. Both publications can be found at www.charitycommission.gov.uk

March 2007

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