The former policy chief of the Charity Commission has declared her opinion that requiring charities to fund the work of the Charity Commission is not a viable option.
Lord Hodgson’s review of the Charities Act 2006, and the parallel reviews being undertaken by the NCVO and the Charity Law Association, are all expected to examine the Commission’s funding model, to see if it is still fit for purpose or whether other options might be possible.
One such option that has been mooted in the past by various people, including the Charity Commission’s own chair, is a “unit cost” on charities with income above a certain threshold. Dame Suzi Leather told the Public Administration Select Committee last month that this was a more attractive option than charging charities to file their annual accounts, because the latter would disincentivise filing.
“Many regulators are funded by the sectors they regulate,” Dame Suzi said.
But Rosie Chapman, who for ten years was director of policy and effectiveness at the Commission, told a Charity Law Association meeting recently that her personal view was that a unit cost was not feasible.
She said: “If the regulator costs, say, £24m a year, by the time you’ve excluded smaller charities with less than £100,000 income, you are probably looking at larger charities - those with income of more than £5m - having to pay about £5,000 a year. That feels like an awful lot of money for what charities would be getting in return.
“I’m of the view that if you want a regulator to regulate charities in the public interest, it should be funded independently. But I’m aware that others will no doubt wish to explore different views.”
Chapman is a member of the NCVO panel reviewing the Act, but because of her past connection to the regulator, will not be involved in examining the Commission’s role and funding. Nor will John Stoker, former chief Charity Commissioner, who is also on the NCVO review panel.
Another funding option for the Commission, suggested recently by PASC chair Bernard Jenkin MP, was to levy a charge on charities with large trading arms.
