The charity sector has no inbuilt way of measuring the impact of its own actions and must work to be more accountable and transparent, according to a report by charity think-tank NPC.
The paper, Boldness in Times of Change, warns that the sector lacks a “feedback loop" as a "mechanism for accountability to beneficiaries” that exists for both the state and market.
“The state’s priorities are set, at least in theory, by voter preferences, while consumers are able to vote with their feet when their demands are not being met,” the report states.
“However, for charities, the ‘buyer’ or funder of services is often not the beneficiary of those services,” it says.
The reports calls for charities to respond to a “shifting external environment” if they are to “survive and thrive”.
Factors affecting charities, according to the report, include “substantial changes to demography, technological trends and politics”.
Patrick Murray, head of policy and external affairs at NPC and co-author of the report, said: “For a long time, charities were able to work without too much scrutiny or regulation. Groups looking to do a bit of social good were largely left alone to get on with it.”
But he says that “leaps forward in technology” have changed that, transforming the way charities need to work with their beneficiaries – “all of which must be done while grappling with new ways to try and raise money”, he said.
“Greater devolution will test whether charities and adapt to the localism agenda, even while public trust in voluntary bodies declines. We want the charity sector to rise to the challenges. The country needs it to do no less.”
The report calls for charities to “become more accountable and transparent”, “developing new ways to exploit local assets” so that communities are involved in identifying and designing services rather than just delivering them.
It also recommends that charities find new ways to guarantee income and match services to resources amid falling state funding and new fundraising regulation that could cost the sector as much as £2bn.
The paper forms part of NPC’s State of the Sector programme which will look in detail at challenges and opportunities facing charities in the future.
