Inquiry calls for ‘ambitious’ overhaul of charities’ relationship with funders, government and business

A “dramatic acceleration” in charities’ partnerships with business and a reset in their relationship with politicians is needed to “unleash civil society’s potential”, according to a two-year inquiry.

Also needed is an overhaul in their relationship with funders, states the final report of the two-year inquiry Law Family Commission on Civil Society.

It says that nationally there has “been little sense of a strategic vision for civil society’s role and its relationship with either government or business” since the Labour government and former Conservative Prime Minister David Cameron’s Big Society agenda.

The inquiry’s report is also critical of the government’s 2018 civil society strategy, and a review into the sector commissioned by ministers and carried out by Conservative MP Danny Kruger two years later.

“Neither were able to provide a truly ambitious vision for the role of civil society or its relationships with government and other sectors,” states the report.

‘Ambitious set of proposals’

The inquiry has made, what it calls an “ambitious set of proposals which together would unleash the full potential of civil society over the 2020s and beyond” by improving partnerships between charities and other sectors, most notably policy makers, businesses, and grant makers.

It wants to see an overhaul of “the funding landscape that civil society operates in” so that funders “make more long-term, flexible financing available more simply to the sector”.

Policy makers need to prioritise charities’ role in society by using its “powers of convening, regulation and guidance, measurement, leadership, taxation, and the ability to leverage funding, in order to increase the levels of charitable giving in the UK”.

The inquiry is particularly concerned with a lack of engagement with charities among civil servants and wants to see a “philanthropy champion” role created in Whitehall.

Regulators, including the Financial Conduct Authority (FCA) and Charity Commission, “must take action to improve financial advice on philanthropy and clarity on what good grant-making looks like”, the Commission’s final report adds.

Politicians and funders should also create a “civil society evidence organisation” to spread evidence of best practice and reduce duplication of work. Funders should also support charities to collect, use and share data.

Action needs to take place at a local level, adds the inquiry’s report.

“Local policymakers and civil society leaders should shift from fragmented individual relationships (often transactional and focused on procurement or funding) to creating strategic relationships with the social sector as a whole,” states the inquiry’s report.

This requires funding and capacity among charities and councils to forge stronger strategic relationships, adds the inquiry.

In addition: “As businesses seek to achieve greater purpose alongside profit, there is a huge opportunity for both the private and social sectors to work together and leverage each other’s strengths.”

The Law Family Commission on Civil Society was launched in autumn 2020 by think tank Pro Bono Economics.

‘Failure of vision’

Inquiry chair, the former Cabinet Secretary Gus O’Donnell, said: “Successive governments have neglected charities for too long, and our country is the worse for it. That must change if we are to achieve the national renewal and better future that the UK desperately needs, because charities are a key part of the solution for every challenge we face.

“No UK political party has set out a real vision for civil society since ‘Big Society’, and it has been far longer since any government committed to real partnership with this vital sector. This failure of vision is also a failure to understand the reality of how essential charities have become.

He added: “The Law Family Commission on Civil Society is now calling on funders and governments to invest strategically in the productivity of the charity sector, the data available to and about it, and in the changes needed to unlock greater giving. Alongside this investment, there must be a dramatic acceleration in the partnership between civil society and business and a reset of the relationship between civil society and government.

“With this investment, acceleration and partnership, civil society’s full potential can be unleashed. Without it, the UK simply cannot hope to recover and grow from the economic and social crises of the past decade and more.”

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