The Cranfield Trust has added its voice to the view there are too many charities, recommending to the Cabinet Office that the Charity Commission ought to impose “tougher demands” on people who want to set up a new one.
The debate over the number of charities is not a new one, but it was reignited by outgoing Charity Commission CEO Sam Younger in his valedictory speech in May when he said that “not all charities the Commission registers end up making an impact”.
RNIB CEO Lesley-Anne Alexander soon joined in the conversation, saying a few weeks later at a lecture at Cass Business School that the Charity Commission ought to “raise the barriers to entry” and require people registering a new charity to research other charities already working in that area to avoid duplication and inefficiency.
Now the Cranfield Trust, in its response to the government’s consultation on the £40m Sustainability Fund, has stated that “in our view, too many new charities are created every year, many of which do not attain critical mass”.
It was responding to the question: “What ideas do you have that could help organisations build their sustainability?”
The Trust said: “Measures to encourage people considering establishing new charities to familiarise themselves with existing charities and services would be highly beneficial, and would help to focus resources, rather than further fragment the sector.
“We recommend that the Charity Commission should impose tougher demands on those proposing to establish a new charity, requiring them to demonstrate that they have researched which other organisations are operating in their area (geographical, functional or sub-sector) and to show that their proposal will have a distinctive and unmet purpose.”
Funders should request cashflow forecasts
The Trust also suggested that funders, such as local authorities, should request financial forecasts, including cashflow statements, from those seeking funding. "This would promote to frontline organisations the importance of developing their financial forecasting skills, which are critical to sustainability."
The Cranfield Trust matches charities with pro bono expertise to help them become more sustainable.
