Gillian McKay: The Charity Commission must support the sector to celebrate regulation

The Charity Commission’s latest strategy consists of five objectives it wishes to fulfil over the five-year period to 2023. They are: holding charities to account; dealing with wrongdoing and harm; informing public choice; giving charities the tools they need to succeed, and; keeping charities relevant for today’s world.

And it was the fifth objective, ‘keeping charities relevant for today’s world’ that was also specifically alluded to in Baroness Stowell’s speech at Charity 2020, where she identified a growing threat to charities as being “the growing role of informal philanthropic effort, supported and aided by technology and fundraising platforms [...] the growing phenomenon of purpose-led businesses: profit-making businesses that employ people, provide services or make products – but do so with a higher aim, a bigger idea or mission in mind. These developments should serve to remind all those involved in charity that they don’t have an immutable monopoly on doing good”.

And indeed there’s a body of economic activity including the growth of social enterprises, crowdfunding platforms and the role of CSR, which now means charities may not be the only ones “doing good”.

However, it may be a bit restrictive to summarise charities as organisations that simply exist to “do good”. Charities make an impact across a wide range of activities and with a wide range of beneficiaries, not all of which are judged of equal merit by the public.

For example, some charities work with ex-offenders, people who have committed violent offences and those with drug or alcohol problems. These groups do not garner much sympathy from the public and would be unlikely to attract much support from a crowdfunding page, even though the charities working to support them are doing this for the overall amelioration of society. The good that charities do may not always be with groups the public finds attractive and therefore, some charitable activities would not find much support from informal philanthropy.

Furthermore, the efforts of individuals and private companies, well-meaning as they may be, currently fall outside the remit of regulation of the commission. This means those managing these activities may not be charged with the same levels of accountability as those regulated by the Charity Commission. Charities have to comply with legally defined definitions of what is charitable. The charitable objective they aim to fulfil must be laid down in their governing document and the charity and its trustees will be held to account under charity regulation if they fail to deliver on this.

Far lesser restrictions are required of non- charities, and we know from the commission’s regulatory and compliance work that some actions, made to look philanthropic, do not always result in positive impact and may mask conflicts of interest and safeguarding issues.
That there is growth in organisations and individuals with that bigger mission or idea in mind is, in many ways, a good thing. We should all consider whether changing how we work or what we do could make society better. But we also need to be mindful that we do not create even more competition with the charity sector.

One of the issues the sector struggles to explain is the depth and range of economic activity it undertakes. The sector engages in large sector activity as well as small, it has to work with National Commissioners and government to identify and address need. Charities are often engaged in negotiation and costing of long term and complex grant and funding arrangements.

The sector currently competes in some areas, such as care, with non-charities and this has not always resulted in better outcomes for beneficiaries. Perhaps rather than instructing charities to change in response to increased competition, the commission could consider supporting the sector, and its own strategy, by encouraging charities to join with them to celebrate and communicate the advantages that come from being a registered charity and the advantages that charity regulation brings.

Gillian McKay is head of charities and voluntary sector at ICAEW

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