NCVO, ACEVO and the Small Charities Coalition have told MPs that they have concerns about the Charity Commission’s guidance and regulatory activity.
In written evidence submitted to the Digital, Culture, Media and Sport Committee, the three sector bodies highlighted concerns about how long it takes to register new charities, the tone of its guidance and the regulator’s leadership.
All three representative bodies said they were broadly supportive of the regulator and its role.
Helen Stephenson, chief executive, and Baroness Stowell, chair of the Commission, were due to give evidence to the committee yesterday, but the session was cancelled. The committee is supposed to regularly review the work of the Commission.
In a statement, the Commission acknowledged that there was more to do, but said it is on track with its plans to provide better support and guidance.
Delays registering charities
NCVO highlighted research from law firm Bates Wells which indicates that it now takes six months on average to process an application to register a charity. This is double the previous level.
“Delays can affect charities’ ability to fundraise, as many grant applications and other sources of income can be dependent on registration,” NCVO said.
SCC said: “It is not clear why it should take so much longer to establish a not-for-profit venture than a commercial venture.”
However, the Commission said in its statement: “92% of lower risk applications are being decided in under 30 days.”
NCVO also said it was worried bout how long some of the Commission’s regulatory activity takes to conclude, with statutory inquiries taking 446.6 days on average and compliance cases taking 127.58 days.
It said: “This can have a serious impact, both on public confidence and on charities themselves.”
ACEVO said it was concerned that the Commission is more likely to investigate when something attracts media attention. It said the recent treatment of the Alzheimer’s Society fell into this category.
It said: “A number of ACEVO members have raised concerns that the Charity Commission’s decision on whether to investigate a report against a charity is dependent on whether there is media interest. This results in an inconsistent approach that is unfair to charities, and to victims of bullying who whistleblow to the Commission.”
Serious incident reporting
The Commission has been encouraging charities to make sure that they file serious incident reports, but umbrella bodies say its new guidance has created too much confusion.
NCVO said: “While it is important for charities to take these issues seriously and – where appropriate – report them to the Commission, the new requirements have caused a considerable amount of uncertainty for charities.”
It added that the Commission’s lack of responsiveness or slow action meant: “Charities are frequently raising concerns about the fact that they may hear nothing at all from the Commission, having submitted a serious incident report.”
Attitude to the sector
SCC criticised how the regulator communicates with charities and could be unduly negative.
In its submission it said: “SCC is clear that the Charity Commission has a valuable role to play both as a regulator and advocate of charities. However, it is increasingly apparent through individual and open discussions with our members in surveys, newsletters and meetings that a large number of our membership struggle with understanding and engaging with the Charity Commission.
“There have also been concerns about its attitude to the charitable sector. In a survey conducted amongst readers of SCC’s newsletter, 54% said they found the Commission to be too negative about charities.”
SCC explained that part of the problem is the Commission's use of legalistic language. “For some of the people that SCC works with, their first encounter with us will be as a result of them wanting support to complain about their caseworker’s handling of their application for registration. In many cases whilst it was right for the application to be refused from a technical perspective, the tone of engagement is extremely unsupportive and obtuse.”
ACEVO said it was concerned about the the chair’s public statements: “In the two years since her appointment, Baroness Stowell’s public statements have not captured the nuance and variety of our sector and the public’s engagement with it.
“Almost all her public statements have included generic statements on public trust, and have not indicated an understanding of the varied purposes, roles and activities charities undertake.”
Language putting off people from setting up charities
SCC said that the Commission’s language is a barrier for non-native English speakers, and called on it to speed up the process of improving accessibility of its guidance.
“There has been some significant improvement in the Charity Commission’s production of information for trustees and those running organisations, yet this is limited to a handful of areas,” it said.
“A bulk of information remains unnecessarily complicated. It is very difficult to use, especially for those with access needs around disability and English as an additional language. There is no consideration given to the style or design of information (both on the website and for publications), which means that many people are often deterred by the obtuse nature of the information.”
It added: “The work of the Commission seems to be a hindrance for those eager to contribute as small charities. Increasingly those approaching SCC’s advice line will choose other not-for-profit structures, rather than entangle themselves in the mire of the Commission’s decision-making process.”
Inability to intervene
SCC gave an example of where it is now mediating between two factions within a charity after the regulator said it could not get involved, despite receiving a serious incident report.
As part of the dispute, one faction was refusing to pay donations into the charity bank account.
SCC said: “This was an issue with criminal implications, that could have cast serious doubt on the credibility of charities, and amounted to possibly more than £20,000 having gone missing. We subsequently insisted that all monies were immediately banked and are working to resolve the conflict between the two opposing sides.”
SCC questioned the regulator’s approach to faith-based and race-based charities.
It warned of “a perception within certain communities that the Charity Commission only conducts investigations into faith-based or race-based organisations. There is a similar pattern at the set-up phase. Certain applications that have a specific faith or race dynamic are questioned more closely and take subsequently longer to process”.
It called for the Commission to think more carefully about who it appoints as interim managers to faith-based charities.
“This [appointing someone of a different faith] is not acceptable, and suggests a colonial approach to managing faith and race-based charities. It does not bode well for future practice and learning for the charity (should it continue) and nor does it bode well for public confidence, as it reiterates structural discrimination, prejudice and perpetuates institutional racism.”
SCC said that it has had difficulty communicating with the Commission.
It said this is partly down to “significant disruption amongst the leadership team” following changes in personnel. “Approaches made to middle management on operational matters have been well received – however none of the commitments to partnership work have been honoured by the Commission.”
ACEVO also said it had been struggling to communicate with the regulator: “It has been challenging in recent months to follow up with the Commission on an operational basis because it seems there have been a significant number of changes to its senior and middle management positions.”
ACEVO said it was frustrated that the Commission had not followed up its statement of strategic intent with more details.
It said: “We would welcome more transparency about what we can expect from the Charity Commission, when it is planning to deliver this and how it will measure success.
“The Commission’s strategy also made reference to the regulator viewing its purpose as ‘more than the sum of its legal obligations’, causing some to be concerned about the Commission straying into territory outside of its remit.”
Removal of excepted charity status
SCC told MPs that the influx charities that would need to register in 2021 when their excepted status ends could pose a problem.
It said: “We are acutely aware that there will be a need to support organisations who may now need to register with the Charity Commission.”
Commission: 'There’s more to do, but we are on track'
The Commission said that its data shows that it is doing more to support charities and respond to communication.
“We are determined to ensure as much benefit from charity is delivered to society and that we uphold its good name – because it is important and people care about it. This is an ambition we believe we share with the charities we regulate. We need to ensure that public support is maintained in the period ahead because charity relies on public goodwill for its work and status.
“To meet our shared ambition and to deliver our five-year strategic plan the Commission has got to change and we’ve been calling on charities to change too – to understand the need for us all to be more accountable for us to serve the public better. Our year-one priority has been getting the Commission’s house in stronger operational order and we have made progress.
“Everything that comes in to the Commission is assessed and prioritised for action within five days. The work awaiting allocation to caseworkers across the organisation has been reduced by 50% in 12 months, meaning we are dealing with inquiries and requests more quickly. We have answered an extra 12,000 phone calls (directly helping 6,000 charities), and made further improvements in registration where 92% of lower risk applications are being decided in under 30 days. There’s more to do, but we are on track.
“As we move to year-two of our plan we will be opening the Commission up even further, because we rely on the support of trustees and the public to help us regulate better. Our common goal is a thriving and trusted charity sector that can continue to deliver for society in ever more challenging times.”