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Sector needs its own Google or Microsoft, says Hind

Finance | Tania Mason | 20 Oct 2009

The UK charity sector lacks its own Googles and Microsofts – innovative new organisations that would inject new dynamism into the market and help the sector achieve more, according to Charity Commission chief executive Andrew Hind.

Speaking as part of a panel discussion about the commercialisation of charities at Charity Finance Live on Monday, Hind disagreed with the contention of US fundraiser Dan Pallotta that charities are hamstrung by restraints that prevent it making use of the kinds of tools available to the for-profit sector.

Hind said charities in the UK can pretty much “do anything, as long as you are absolutely transparent with the donating public”.

He said it is not constraints on charities that stops them from fulfilling their potential.  “Where are the Google and Microsofts that should be taking this sector by storm?  There are minor versions of course, but if you look at a league table of the top 50 charities by income over the last 25 years, there’s been hardly any change.

“Yet if you look at the commercial sector’s FTSE100 hardly any of the companies on it are the same as 25 years ago.

“We have not found a way of really motivating the public to support contemporary causes. People still tend to support traditional causes. Look at legacies – they are rarely left to the cutting edge charities.  I think it’s fair to say the donor is stuck in a rut.”

He added that there was a question mark over charities’ ability to innovate, because the trustee structure of charities can act as a brake on innovation.  “Innovative ideas that are coming up through the executive line aren’t always percolating through the system,” he said.

Pallotta said what was missing was “entrepreneurship”.  “The for-profit sector is holistic,” he said. “It lets you create something in this world and make money as well.  The non-profit sector doesn’t – the choice is stark.”

Acevo chair and RNIB chief executive Lesley-Anne Alexander said she thought charities constrained themselves by being too cautious and “making up reasons why we can’t do things”.  Executives don’t allow themselves to take risks because their every move is scrutinised so closely, so they can’t be entrepreneurial.

She said the sector doesn’t need to pay huge salaries but should be paying its trustees, in the same way the Charity Commission pays its commissioners and NHS Trusts pay their boards.  “For me that is where the big failure is,” she said.

Hind responded that "the future is in charities’ hands”, and it should accept that rather than “always trying to find excuses”.

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