On Thursday morning the Commission set out a bold vision for the next five years. It insists that for the concept of charity to survive the sector must behave more ethically, and in line with people’s expectations, than it currently is. But also the regulator itself must do more to support charities with tailored guidance and play a more vocal leadership role.
And it hopes to do all of this without creating an “adversarial” relationship with the sector it regulates.
To launch the strategy the Commission’s chair, Baroness Stowell, who only took up the role earlier this year, gave a speech at the Royal Society of Arts, to an audience of charity leaders, emphasising the scale of the challenge the sector faces.
She had a tough message for the sector. Charities are “not fulfilling their potential” and if they don't improve the sector will decline because “there will be ever more new kids on the philanthropic block” to take their place.
“Charities must read the writing on the wall” she warned.
The following morning she appeared on BBC Radio 4’s Today show to tell its listeners about widespread problem of unethical behaviour at charities and, presumably, reassure them that she has a plan to address it.
Both the strategic vision itself and the way it was launched tell us something about how the Commission will behave under Stowell’s leadership and give stakeholders a lot to think about.
It's a tough approach, which has already raised hackles in the sector. Is it the right one? And can Baroness Stowell achieve her ambitions?
The central thrust of Stowell’s argument is that charities must do more to embody the altruistic values that people have when they donate or volunteer.
At one level, she is right. There have been too many high-profile examples of charities not meeting the standards that the public expects of them, particularly when it comes to fundraising and safeguarding.
This actually chimes with the previous chair’s parting message to the sector. William Shawcross told the annual public meeting earlier this year that charities must “live their values”. Within hours of him saying that, the Presidents Club scandal broke - the latest of a number which have afflicted the sector.
Stowell has now been more explicit. She maintains that the problems are not isolated to those scandals, but are endemic across the sector.
That is quite some charge to lay at the sector’s door. Yes - trust is at the lowest point since the Commission began measuring it, but the measurements took place in the middle of the Oxfam scandal, and it had only dipped very slightly on two years ago, which showed a sharp decline, but was done in the wake of the fundraising and Kids Company scandals.
Because the research is conducted every two years it is impossible to say whether or not trust recovered and was then knocked back again as a result of this year’s scandals.
We should also remember that charities still enjoy much higher trust than many other institutions, so the sector is responding from a position of strength.
Charities' main reaction has been annoyance. Many charities feel they are highly ethical, and that their problems are down to a few bad apples and unfair media criticism, not a wholesale ethical failure.
The Commission's research found that when the public think of charities, in deciding whether to trust them, they think only of big fundraising charities.
Nevertheless the sector must respond. And it is, though maybe not as swiftly and robustly as some would like. A new code of ethics is in development, for example, but it is not attracting widespread interest and has not been unquestioningly endorsed.
Relationship with the sector
Despite Stowell telling the sector that she does not want an “adversarial” relationship, her message is in some ways tougher than that of the previous chair, who was often accused of running the sector down.
Where Shawcross’ interventions were focused largely particular areas like chief executive pay, large charities and terrorism, Stowell has gone for the jugular and declared the whole sector to have a cultural problem.
It is hard to see how, if she makes many more national media appearances to talk almost exclusively about the lack of trust in charities, the relationship will be characterised as anything other adversarial.
In particular, the declaration that the regulator will play more of a leadership role has the potential to bring the Commission into more public disputes with the sector’s representative bodies.
She's made it clear that the regulator is there to “represent the public’s interest” in charities, inferring that umbrella bodies were there to represent charities’ interests and that the interests of charities and the public are not always aligned.
Umbrella bodies are already voicing concerns about the language used to convey a crisis of trust in the sector, saying it could do more harm than good.
Keiran Goddard, director of external affairs at ACF, says “public pronouncements about poor practice need to be placed within a broader statistical context in order illuminate the reality of the vast majority of charitable activity.”
Duncan Shrubsole, director of policy, communications and research at Lloyds Bank Foundation, adds “talk of a crisis in public trust in the sector needs put be put into perspective. Yes, there have been some specific and high profile cases of charities getting it wrong but the vast majority, particularly small and local charities, are doing great work day in, day out in their communities and are trusted to do so by the people they serve, work with and raise funds from.”
In short, the sector sees that Stowell has a point. But it's not clear that haranguing people who work in charity is the way to address the issue.
Elephant in the room: funding
In any case, the Commission’s vision may actually amount to very little if it cannot obtain adequate resourcing.
Stowell told the audience at the RSA that “Our ambition for the charity sector is greater than our current capacity,” and the strategy document also admits that it does not have the resource in place to deliver.
She described the strategy as “high level” and said that a “roadmap” for putting it into action will be developed.
For some time the Commission has been mooting that it might ask charities to pay some kind of levy, but this idea has proved unpopular in the sector and it has not managed to get out to consultation and even when it does it would need to change the law to be able to collect payment from charities.
No mention of charging was made last week. Maybe Stowell is hopeful that the Treasury will cough up some more money for the regulator?
But Elizabeth Chamberlain, head of policy and public services at NCVO, urges caution here. Writing on NCVO’s blog, she says: “the forthcoming spending review is predicted to be one of the most difficult ones yet,” and that given previous funding boosts have been conditional on the regulator consulting on charging.
“In the context of this reality, the Commission is going to have to decide where to focus its resources. The alternative – setting out a wider work programme and telling charities to pay for it – is not a settled issue, and by some distance,” she says.
This leads us again to a place where serious questions are being asked about the Commission itself.
Does it have enough resources? Clearly no. Should it be doing more? Probably yes. Is the Commission’s own governance up to standard? Debatable. And should we just scrap the Commission and start again? Well, maybe, though it's unlikely we will.
That we are even asking the last question is indicative of the scale of the challenge facing both charities and the regulator.
My David colleague David Ainsworth recently set out some of the problems with the landscape of charity regulation, and I’m not convinced that the Commission’s new strategy is capable of addressing them. It would certainly require a lot of money and a lot of hard work.
Charities need to take on board the serious message about behaviour and the need for culture change and do more to ensure that they are holding themselves to a higher ethical standard.
And if the Commission really wants a less adversarial and more collaborative relationship with the sector then it needs to move away from its obsession with its trust research.