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Sir Stuart Etherington: Charities need to articulate their role as we rebuild together

07 May 2020 Voices

Sir Stuart Etherington considers the role of charities and social enterprises once the immediate Covid-19 crisis is over

The immediate focus of the leadership of the voluntary sector has inevitably and rightly been on the downturn in income estimated at over £4bn. In particular, this has impacted on elements of fundraising and earned income. The £750m provided by government to certain organisations in priority areas and locally is of course insufficient, but I suspect that it would've been even less without an effective lobby.

The dramatic and swift reduction in funding will lead to a range of responses. Some organisations will continue to operate with a more limited scope, some will merge and others will close. A not dissimilar reaction to that of the financial crisis of 2008, although this time on a much wider scale. The lobby now has rightly turned its focus to identifying additional money from specialist pots, and trying to adjust programmes designed for the private sector to assist voluntary organisations, with some success.

The civil society response to the pandemic has, however, illustrated the strength of altruism, generosity and a rise in social capital, in what Andy Haldane, chief economist of the Bank of England and a founder of Pro Bono Economics, has aptly named the Institutional Immune System. The key now is to reflect on what policy changes might lead to a more robust civil society in the longer term, as we move beyond the public health crisis and try to recover from the significant economic downturn, in the context of a very significant level of government debt.

Recovery

Much will depend on the way in which the UK recovers. The pandemic has exposed the insecurity felt by many in the employment market, but it has also led to reductions in pollution and a higher priority given to individuals' wellbeing and interpersonal relationships.

Some will argue that we should do nothing to hamper the economic recovery as we need to return as soon as possible to prior norms. Others argue that this is a once in a lifetime opportunity to create a different form of recovery, a position taken by president Macron of France amongst others. This would suggest a greater focus on environmental policy and one based on the wellbeing and levelling up agenda of which economic growth is just one aspect.

The state has demonstrated its willingness to make rapid change, including the shutting down of the economy. If indeed this pandemic is a war, then might there be the opportunities for fundamental change after this war similar in scale to that experienced after World War Two?

Role of the voluntary sector 

If the recovery is to be different then the voluntary sector has an important role to play, and it should be thinking about this and the policy changes required now. It should be arguing for a strategic agenda and recovery based on wellbeing, including a green new deal and assisting government in developing the levelling up agenda. This will undoubtably be important to the new swathes of Conservative MPs in the north of England who will not take long to organise as a powerful grouping in Parliament.

The sector might also wish to focus on two particular areas in both services and lobbying.

The first of these is social care. If the pandemic has proven one thing it is that social care can no longer be ignored as the Cinderella of the health and care system. Reform must surely happen now and the voluntary sector has a key role to play in seizing this opportunity. As the NHS was created from the ashes of World War Two, so social care should be at the forefront of the post-pandemic settlement.

Similarly, if we are to move away from dependency on the gig economy and the inequalities this creates, then employment via higher skills will be needed. Again, the sector has an excellent track record and should be arguing now for significant investment in higher skilled employment.

Moving from the specific to a more generic policy framework, the sector should build on the rising social capital that we observe in adversity – the generosity, the altruism, and the self-organising – particularly at the microlevel.

How might this be achieved. In part this requires resources. Community foundations, where they exist, have proved themselves up to the task. The National Lottery Community Fund could do more, as could future tranches of unclaimed assets together with an accelerated programme of asset transfer from moribund charities.

The network of community foundations is still patchy. A revival of the government’s match scheme would be helpful. The match ratio could be varied depending on the levels of deprivation in a particular community – for example, 10 government contributions to one citizen contribution in deprived areas, and an inverse ratio in richer areas. The citizen contribution could consist of an element of time match, thus encouraging local volunteering depending on the nature of the fund. A network of matched funds with endowment could gradually be established. Some might be large but others at the neighbourhood level could provide a stimulus for new associations and citizen action to address local issues  – a role some community foundations are already playing.

Coordination 

One of the difficulties experienced by the sector in the pandemic has been the coordination of national programmes and grassroots activity. This is not new, on a much smaller scale it was true of the Grenfell fire. The lack of local capacity is key to this.

One solution might be to fund that capacity directly but it would be sensible to co-locate coordination, funding and advice into a hub or even a merged organisation which might be much more coordinated with national capacity. In terms of resilience in crisis this would work better, but even in less troubled times it would aid coordination and create greater capacity at a local level more able to engage with local government.

One other element of the growth of generosity observed during the pandemic deserves mention and that is giving. While some areas of fundraising like shops and events will have been particularly hard hit, individual generosity has not gone away, particularly driven by the digital revolution which has clearly be accelerated across-the-board as a result of lockdown.

Might we see more giving or investing direct, essentially removing the need for intermediaries by the increased use of digital platforms? One example is Kiva, a social investment platform that enables individuals to invest directly in social businesses in poorer areas around the globe. Where this applies to donating rather than investing, it has been called charity direct. Given the advances in digital technology and the growth of funding platforms, some of which might operate at a micro or even person-to-person level, it is not hard to imagine a very significant number of people addressing social need and justifying it as charitable to the taxman. Just as the corporate sector has a spectrum of companies, so too could civil society have a spectrum of organisations underpinned by many direct givers.

The volunteering response to the pandemic has been astonishing, whether at the national or local level. As large-scale government intervention has exposed the fragility of employment for many, it is likely that calls for a basic universal income (BUI) will reappear. If they do then the sector might argue for a citizens’ dividend for socially beneficial activities as a supplement to the BUI. Alongside this stimulus, the celebration of volunteering activity remains important. The role of the head of state in this is crucial. Is it time that the Queen's award for Voluntary Service was more closely integrated into the honours system?

Regulation

Finally, what should the sector be seeking from its regulatory structure? The narrow definition of regulation and pronouncements from the Charity Commission have created a climate where public confidence may have been eroded, rather than public trust being enhanced.

The sector needs to think through what its model of good regulation is. It should be based on a public interest framework, which is not the same thing as public opinion. One thing is for sure, voluntary organisations suffering significantly as a result of the reduction of income are not going to have the resources to respond to the level of compliance implied by the current narrow view of regulation. So, the framework will need to change.

Although the sector has inevitably been trying to deal with the immediate crisis, it needs to be part of the debate about the type of society we wish to be. There are straws in the wind which point the way to a different set of principles and a different approach to what we value. The voluntary sector needs to articulate the role that it will play as we rebuild together.

Sir Stuart Etherington was chief executive of NCVO until September 2019

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