NCVO, the Charity Finance Group and the Charity Retail Association have all criticised the latest research report from the True and Fair Foundation for having fundamental flaws.

A draft version of the report has been circulating since yesterday, and Civil Society News understands it was slated for publication on Monday.

Its main recommendations include making it harder to claim gift aid and cutting rate relief for charity shops.

Karl Wilding (pictured), director of public policy at NCVO, said: "This is an embarrassingly poor report. It is fundamentally flawed in terms of its method and analysis. Its conclusions are a nonsense. No credible policy-maker could possibly take this report or its recommendations seriously. Implementing its proposals would lead to the closure of thousands of the small charities the Foundation claims to care about."

Andrew O'Brien, head of policy and engagement at CFG, said: "Not only is this report not credible because it is full of inaccuracies and complete misunderstandings of the facts, but if its recommendations were followed through the people that would lose out would be beneficiaries and donors.

"The True and Fair Foundation want people to pay more tax on their donations by restricting gift aid and less money to go to good causes. Charity shops are not market distortions or vehicles for government subsidy. They exist because we have a very generous public that want to do what they can to help those in need. The True and Fair Foundation should be supporting these shops and gift aid, which empowers donors, rather than attacking them."

Robin Osterley, chief executive of the Charity Retail Association, this morning issued a comprehensive rebuttal of the report.

He said: “It is disappointing that once again the True and Fair Foundation has managed to produce a report which contains many statements that fall well short of the truth and are certainly not fair. Unfortunately Lifting the Lid is shot full of misleading statements, unsubstantiated assertions, and downright inaccuracies. The strange attack on what is a great UK-wide institution, the charity shop, seems to reveal an underlying desire to injure the whole charity sector, in spite of Mrs Miller’s weak and unjustified assertion to the contrary.
 
“Charity shops are extremely successful, raising around £300m for good causes every year. This is money which would certainly not be available to charities otherwise – it is effectively an irreplaceable source of income. That income is forthcoming for three reasons:

•  “Charities run charity shops because they make a huge contribution, financially and socially, to the causes they support. They act as a presence on the high street, a shop window for charities and their services, and a vital source of employment and volunteering opportunities. If they weren’t successful, charities wouldn’t run them. 

• “Charity shops are successful because members of the public choose to donate their goods to the cause, often gift aiding them as well. This puts a whole new light on the argument about gift aid, taxation and business rates – members of the public have chosen to divert a proportion of their wealth and their taxes to these causes rather than the general public purse – a right that has been given to them by society for many years now.

• “Charity shops are successful because members of the public choose to shop in them – so they are obviously filling a role on the high street which other retail outlets do not.

“We have no idea why Mrs Miller is so keen to attack the very shops that are so popular with the public. But if she insists on doing so, she should at least use accurate and defensible statistics and not make unsubstantiated assertions. She should also remember that she is trying to damage institutions that help the most vulnerable in our society, institutions that undertake work that no-one else is able or willing to do."

David Emerson, chief executive of the Association of Charitable Foundations, said: "Both the method and the conclusions of this report are deeply flawed. The idea that cost ratios are a useful, credible, or intellectually robust measure of effectiveness has been thoroughly discredited time and again. For independent grant making foundations, costs are always a means to an end, and will obviously vary depending on the nature of what is being delivered; they are a considered choice made in the service of delivering maximum public benefit, something that sadly cannot be said of the decision to publish this research."