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Most fee-charging charities do not consider affordability in their annual reports

Finance | Tania Mason | 4 Jul 2011

The vast majority of fee-charging charities do not discuss in their Trustees’ Annual Report whether the level of fees restricts people from benefiting from their services, new research suggests.

The report into charities’ compliance with the public benefit reporting (PBR) requirement, produced by Sheffield Hallam University on behalf of the Charity Commission, specifically explores the issue in relation to fee-charging charities, such as private schools and hospitals.

It found that around half of the 1,402 charities surveyed appeared to charge some fees for beneficiary services, and amongst charities with income above £500,000 this rose to just over 60 per cent.

Therefore, the researchers said, half of the charities in the sample had “potential instances of fee-based services to beneficiaries where the trustees might have wished to discuss issues of affordability or access in the Trustees’ Annual Report (TAR)”.

'No direct discussion of affordability'

Yet 61.7 per cent of these charities had no direct discussion in their TARs of steps taken to ensure affordability, even though charges for services were recognised. But the researchers accepted there could be many reasons for this, such as the fees being so low as to not be worthy of mention, or fees being covered by other funding.

Where the issue was mentioned, the references were mostly to cutting fees or providing bursaries (by 23.8 per cent of the fee-charging charities).

The researchers said that some parts of the sector are “highly sensitised to this issue” and devoted considerable energy to discussing access and affordability of their services as part of their PBR. But it is a small proportion given that half of all charities surveyed appear to charge fees of some kind.

In doing their analysis, the researchers split the charities into those that were highly concerned with meeting the PBR, those with medium concern and those with low levels of concern.  Among those with medium concern, the researchers came across several instances of boards formally reviewing the charity’s fee-charging policy in light of the Commission’s public benefit guidance.  But they found decisions about pricing were generally made with reference to financial sustainability or sector comparisons, rather than to a specific interpretation of the guidance.

They added: “Interestingly, we did not speak to anyone who used rhetoric suggesting that their desire to reduce fees was prompted by a desire to make the service more accessible to users.  

“One £4m industry-specific training body asserted that even though they had launched a bursary scheme in response to the guidance they were ‘not actively publicising it’.”

Click here to read Tania Mason's story about the research and click here to read the full report.

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Directory: Charity Commission | Sheffield Hallam University