The year 2016 has been a difficult one for charities, but there were some positive developments. David Ainsworth looks back over the headlines.
The charity sector headlines were dominated by one story in 2016 – fundraising. After a 2015 in which the sector had been badly battered over its fundraising practices, 2016 saw numerous steps to build its reputation. But sadly for the sector, new shocks continued to come.
The year started with confusion over the role of the Fundraising Regulator, established late in the previous year, following recommendations in the Etherington Review to sweep away the previous tripartite structure of the Fundraising Standards Board, Institute of Fundraising and Professional Fundraising Association.
There was a lack of clarity over the scope of its powers, its funding mechanisms, and what rules it would lay down. There were also questions over who would fill some senior roles.
The regulator approached the 50 largest fundraising charities in the UK to help with start-up costs. But it quickly became apparent that while the new body was billed as a self-regulator, not all charities saw it that way. The RNIB was the first to express reservations about the contributions, and other charities followed suit. Altogether, by the time the regulator had launched in July, five charities still had not paid up.
There was a lack of enthusiasm, too, for the approach taken by Lord Grade, the regulator's chair, who admitted to lying to fundraisers to scare them away, and attracted opprobrium throughout the sector for his comments.
The IoF seemed less than keen, too, to surrender its control of the Code of Fundraising Practice, leading Sir Stuart Etherington, chief executive of NCVO and the man who recommended the establishment of the regulator, to say "these people must think they're from Planet Zog".
One of the biggest challenges was the establishment of a Fundraising Preference Service - a means for donors to opt out of communications from charities. The FPS went through numerous iterations during the year, eventually arriving at a form that was quite different to the one envisioned by the Etherington Review and by the working group set up to scope it out.
The Scottish charity sector, too, expressed reservations, and in the end it decided to go its own way. Charities in Scotland will not be covered by the regulator or the FPS.
While one regulator was setting up, though, a far more powerful body was grinding into gear. The Information Commissioner's Office, discovering belatedly after reading the newspapers that it had missed more than a decade of breaches of the Data Protection Act, began to make up for lost time, and is understood to have launched around 15 investigations into charities.
Several charities - most notably the British Red Cross - surprised the sector by signing memoranda of understanding with the ICO, committing them to go further than the law in their care with donor data. And at the end of the year, significant fines were handed out to the RSPCA and British Heart Foundation.
Meanwhile, yet another regulator was closing its doors. The Fundraising Standards Board, the predecessor to the new Fundraising Regulator, published a series of damning reports. Its report into Olive Cooke, whose suicide had triggered the public outcry over fundraising, found she had received thousands of contacts from the sector.
What the papers said
The newspapers, meanwhile, continued their scrutiny of charities, in a fairly hit and miss fashion. The year began with the fallout from one of the misses. In late 2015 The Telegraph had published a report from the True and Fair Foundation, saying that the charity sector was inefficient and badly run. Gina Miller, the founder of the foundation, tried to quash criticism with legal action, but eventually the newspaper was forced to amend the article. Although not before it had published another report from the same foundation, this time making similar allegations against charity shops.
The papers continued to press on a number of points, and uncovered a fresh fundraising scandal at agency Neet Feet, which went into administration. The Times went through a brief obsession with the National Trust, writing more than a dozen stories in a fortnight, accusing it among other things of causing problems among rural shepherds. Overall, scrutiny of the sector by the tabloids showed few signs of abating.
Relationship with government
Meanwhile, charities’ relationship with the public sector continued to be slightly frosty. Following the fallout from Brexit and the change of prime minister, Rob Wilson was whisked into the Department for Culture, Media and Sport. After a day or two of lurking in the Cabinet Office as a portfolio without minister, the Office for Civil Society followed him down the road and he became its minister once again.
The move didn’t meet with wholesale approval from the sector. Dan Corry, chief executive of New Philanthropy Capital and a former Whitehall insider, said that no one ever drove effective policy from DCMS. But others were more sanguine about the possibilities.
Separately, a new Downing Street policy unit was launched to improve relations with the voluntary sector, although it does not appear closely connected to the OCS, and little sign of its activities has yet emerged from Number Ten.
Governance at the Charity Commission
Concerns also emerged about the governance of the Charity Commission. One member of the board, Gwythian Prins, was caught up in controversy after writing an anti-EU tract for the Institute of Economic Affairs, a right-wing think tank, and Sir Stuart Etherington, chief executive of NCVO, wrote to the minister for civil society expressing his concerns about the appointments process.
A Civil Society News investigation found a number of links with right-wing think tanks, as well as close personal connections. Later in the year, one member of the House of Lords criticised William Shawcross, chair of the commission, face-to-face in Parliament over his organisation’s lack of representation and diversity.
The Lords Select Committee on Charities was engaging in more widespread activities, however, than berating regulators. The committee – an ad hoc arrangement to investigate the sector – took widespread evidence.
There was concern about regulation and a widespread feeling that the sector had become a low priority and was poorly valued in government – a feeling not made better when Rob Wilson was publicly rebuked for cancelling an appearance before peers at short notice.
Many of those giving evidence also expressed concern about lack of support for small charities. Perhaps the most common theme was a need to make major changes in the funding arrangements for the sector – particularly government contracts, which were all-but-universally regarded as poor quality and a major problem. Peers’ final report is expected next year.
The committee also heard from many parties that there was a need for widespread reform and measures to strengthen charity governance – a process which is being driven by interest from major players, including the Charity Commission and NCVO.
As part of the same process Sir Stephen Bubb stepped down after a decade as chief executive of sector leadership body Acevo to lead a project looking at strengthening governance in the sector. His replacement, Vicky Browning, came from umbrella body CharityComms, and she is due to start in January.
At the same time, the latest Charities Act was making its way through Parliament. The primary purpose of the bill was to give new powers to the Charity Commission, which were greeted with a mixture of support and suspicion in the sector. Rules over disqualifying trustees and issuing warnings led to widespread objections from within the sector.
As it continued through the legislative process, it became what’s known in Parliamentary parlance as a Christmas tree bill, and new pieces of legislation affecting social investment and fundraising were hung on its outer branches.
Separately, another bill to amend the Gift Aid Small Donations Scheme made its way through Parliament, and is still in train.
A further piece of government machinery was a proposed clause limiting charity advocacy. Initially the government planned to enshrine this in all grant agreements, but it backed down somewhat after opposition from the sector and from academics, who would also have been caught by the clause.
Instead the anti-advocacy clause was watered down, and became entwined with another piece of work – an attempt to set universal grants standards in the wake of the high-profile collapse of London-based children’s charity Kids Company.
Successive prime ministers had ploughed tens of millions into Kids Company with next to no accountability, and the standards have been an attempt to ensure that government does not squander money in this way again. As of yet, it is not clear whether the standards will prove good or bad for the sector.