Charities face mounting financial, operational and governance pressures, and for some “the most difficult times may lie ahead”, Charity Commission’s CEO said yesterday.
Helen Stephenson, chief executive of the Charity Commission, delivered a wide-ranging speech at the regulator’s annual public meeting yesterday afternoon.
She shared some findings from research into the impact of Covid on the charity sector, explained the Commission’s position when it comes to “culture war” issues, and revealed that the regulator will soon begin a review of the data it gathers about charities.
‘No simple way of summing up what Covid has meant for charities’
Stephenson told the virtual audience that the Commission would soon publish new research into how the pandemic has impacted the sector.
“It’s a complex picture,” she said. “Such is the diversity of the sector, in terms of charities’ size, activities and operations, that there is no simple way of summing up what Covid has meant for charities.”
But the Commission has concluded that there has been a “significant impact on most charities” with 72% of respondents saying they changed, curtailed or halted work.
Stephenson added: “Smaller charities in particular saw their services severely impacted – one in four paused their activities completely during the first lockdown.
“The impact of this on those who benefit from their work is harder to measure, but it is likely that it was in some cases significant.”
However, the Commission has also found evidence of the sector’s resilience.
“Charities rose to the challenge Covid presented,” Stephenson said.
“Many were quick to adapt and take evasive action during the first lockdown and the sudden loss of income that followed.”
‘For some charities the most difficult times may lie ahead’
Stephenson emphasised that the challenges were varied and far from over.
“For some charities the most difficult times may lie ahead,” she said.
She explained that as well as the financial and operational issues facing the sector, charities also needed to consider their internal relationships.
Stephenson said it was “about maintaining good governance and a healthy board dynamic, even where there are differences of opinion about how to shape the charity’s work into a future that remains uncertain”.
She added that the Commission has “already seen an increase in disputes in charities”. Her advice to charities was to “prioritise communication”.
She said: “As you face difficult decisions about how to adapt your charity’s work to changing times, be alive to the risk of disagreements escalating.
“Don’t place being right ahead of doing the right thing. Prioritise communication with those you work with, and work for, and with those on whose support you rely.”
Elsewhere she highlighted that part of the reason for a 75% increase in whistleblowing reports could “indicate growing pressures on board dynamics and good governance in charities, linked perhaps to challenges arising during the pandemic”.
Controversial, sensitive issues
Stephenson alluded to recent cases involving Runnymede Trust, Barnardo’s and the National Trust, where complaints from Conservative MPs about the issues charities have spoken out on, have led to compliance cases.
In all three examples the Commission ultimately cleared the charities of any wrongdoing.
Stephenson defended the regulator’s actions.
“Some have criticised us for opening cases into these matters,” she said. “They have questioned the motives of those who raised concerns.
“Let me use this opportunity be absolutely clear: the Commission does not, and must not, examine people’s world views or ideologies before deciding whether they have a right to have their concerns examined by us.”
She added that if the Commission finds no problems it will say so.
Furthermore, Stephenson said that because “public debate in our society feels increasingly divided” it was “vital that regulators like the Commission steer a clear-headed, steady course through sensitive issues”.
This is also something she urged charities to consider in their own activity.
“It’s also important that charities themselves are alive to the wide range of legitimate views and sensibilities that exist within the public on whose support they ultimately rely,” she said.
“This doesn’t mean avoiding controversy or difficult issues. But trustees must ensure their decisions and priorities are driven by their charity’s aims. Not by their own world view and outlook.”
‘Fundamental review of the data we collect from charities’
Stephenson told the audience that the Commission “must also help charities anticipate risks that they face”.
To do this the regulator wants to make better use of data.
“Over the year ahead, we will begin a fundamental review of the data we collect from charities, including through the annual return and charities’ annual reports and accounts. We will also review and improve how we make that data work once we hold it,” she said.