Commission chair urges wealthy to help charities survive ‘existential crisis’

30 Nov 2022 News

Chair of the Charity Commission, Orlando Fraser, has appealed to the wealthiest in society to be more philanthropic as charities face an “existential crisis”.

In a speech at the Beacon Philanthropy Forum he outlined the ways in which philanthropic giving can support the charity sector during this economic crisis, and explained how the Commission itself will support philanthropy.

He said “despite this desperate need for greater philanthropy” not all of the top 1% are “rising to the challenge”.

Fraser added that on the whole, “we have a vibrant culture of service and generosity” but the country’s rich arguably “seem to lag behind internationally in their generosity, giving less proportionally than their equivalents in similar countries around the world”.

The charity sector is currently facing “one of the greatest economic crises in living memory, and it is beholden to those with the deepest pockets, those many existing and potential philanthropists, to put your shoulder to the wheel, and help out now before too much pain and damage is inflicted”, he concluded. 

Philanthropy enables ‘charities to test new ideas’

Fraser said many charities are facing an “existential crisis in the months ahead”, affected by rising costs, rising demand, and the risk of dwindling income as ordinary donors tighten their belts, adding inflationary pressures mean that donations are losing value.

He said though the government has the primary role in helping the most disadvantaged through this crisis “there are limits to how much funding the government can raise to help”.

Many charities and their beneficiaries will be relying on increased philanthropic giving simply to survive, he said. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌   

“Philanthropy’s potential is distinct from that of the state, and is more than a way of plugging funding gaps for charities’ existing programmes. ‌High-net-worth-individuals have huge potential to enable charities to grow and develop beyond their current capability‌.” ‌ ‌ ‌ ‌

Fraser told delegates that philanthropists can facilitate rapid development and progress – “enabling charities to test new ideas, to try, fail, and eventually succeed in finding solutions to new and entrenched challenges”. 

Philanthropists ‘maligned’

Fraser said he believed over recent years, there has been “an unhelpful tendency to malign philanthropy and philanthropists”. 

“We have a culture in which people are scrutinised because they are giving, and giving publicly. We have seen scrutiny that supposes giving must be motivated by cynicism, by an attempt to ‘whitewash’ a bad reputation, or to obscure nefarious deeds, or to increase an individual’s power,” he said.

He added the Commission will do “all it reasonably can during this awful economic period”, to help stimulate more philanthropic giving in England and Wales. 

“We are obviously limited in how we can help, as our role gives us no influence over fiscal incentives to giving, nor do we pull any other government levers that might nudge the rich to give more. But there are some important areas I can immediately see where we can and will help,” he said.

The chair said the regulator would continue to enforce charity law robustly where appropriate, “as it is only in that way that many donors can have confidence to give widely to the sector”.

Second, he said the Commission will publicly “signal the importance of the promotion of philanthropy in society to help fight this economic crisis”.

He said that next year the regulator will publish updated guidance on returning and refusing donations. “Its direction of travel will be a promotion of lawful philanthropy, and ought to further empower trustees to use their discretion in making the right decision for their charity, starting from the principle that charities must have funds in order to deliver on their purposes.”

“Fourth, we will continue to promote the adoption by charities of impact reporting, as part of our objective of enhancing the accountability of charities to donors,” he said.

Fraser added that the regulator has “persuaded” DCMS that the regulator needs an experienced philanthropist on its board. 

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