“Charities need to step up,” says the regulator. Here’s how…

Last week the news was scattered with a sprinkling of grumbling at charities for not being as good as we hope they should be.  Who was behind the story?  The mail and the express?  Not this time.  The Charity Commission took some time to have a public dig about charities in general and their response to the expectations of the public in particular.

At first, this might seem a little strange but delve a little deeper and we find a charity commission which is reinventing itself to deal with the new reality – a reality where our expectations on charities, and their importance in our nation’s life, are higher than ever.  Whilst last week’s generalised doom and gloom might be rather unusual, driving it was the charity commission’s newly sharpened priorities for the next five years.  With that in mind, your correspondent suggests the practical steps which could bring about the change that Baroness Stowell is looking for.

When Baroness Stowell said on the BBC’s Today programme that “The sector has to face up to a big challenge” she hit the nail on the head.  Despite a rise in overall funding to charities, the rapid changes in regulation, constant increased demand for services, and the increased scrutiny that charities are receiving from the popular press are leaving many charity workers feeling worse-off than ever.

It’s not just development charities who have faced a big backlash this year.  Following Oxfam’s scandal over the alleged abuse by some of its workers in Haiti, the regulatory spotlight has turned onto charities practices for safeguarding as well as other essential controls right across the charity sector.  Interestingly, it was this scandal that really brought home to me the gap that Baroness Stowell was talking about when she said:

“Charities aren’t always meeting the public’s expectations. What I’m calling on charities to do is to recognise their collective responsibility to respond to public expectations, because if they don’t, they aren’t going to provide the benefit the public wants” . Baroness Stowell, The Charity Commission

Whilst Oxfam’s actions, for which it has since apologised, fell well short of the standards one might reasonably expect, I also saw charities with excellent practices, whose officials had acted impeccably tarred with the same brush in the newspapers, and it was then that I realised, we can’t expect our charities to be perfect, but we do.

In other words, we have unrealistic expectations about what charities can do for us as donors and as a society.  And part of the problem is that those of us working in charities contribute to that illusion of perfection whenever we can.  With all the talk of volunteering and low overheads, we gloss over the necessity of paying a living wage to dedicated professionals who do the work that volunteers can’t or won’t do.  With all the talk of sending the maximum pence in the pound possible to the field, we gloss over the necessity of taking some time to plan and manage that money so that it’s spent effectively, rather than wasted.

So the Charity Commission has five priorities it wants to address, can we address the real problems in the sector and build the kind of society that we all want to see?

Strategic Objective 1: Holding charities to account

If we’re truly to hold charities to account, then we must have a method for accounting for a charity’s impact.  It is no use to measure what percentage of funds were used on administration because that will – and should – vary significantly between equally effective charities in different circumstances.  Instead, the commission should facilitate and support the development of impact accounting which allows charities to account for their actions and expenditure according to their charitable objectives.

Strategic Objective 2: Dealing with wrongdoing and harm

The Charity Commission has stepped up its efforts in this area already, but in doing so it has demonstrated that it’s under-resourced for the job.  It will need funding – from the government or from charities themselves – to get the job done right.  The Commission also needs to foster an atmosphere of openness in which the lessons learned by one organisation can be shared, and not repeated, at another.

Strategic Objective 3: Informing public choice

There are too many charities, over 160,000 in the UK, many with tightly overlapping objectives and operations.  In the commercial world, many would have been merged or taken over, leaving stronger, fitter organisations, but in the charity world, this is almost unheard of.  The public can never have a good choice when that choice is between hundreds of organisations all essentially doing the same thing, so as well as drawing together proper information about charity performance on key measures, the commission must also help the sector to make it easier for charities to merge and to shut up shop.

Strategic Objective 4: Giving charities the understanding and tools they need to succeed

The charity sector is way behind in tech, way behind in digital, and it’s rightly held off from investing vast sums in new technological tools and services.  But this has gotten to the stage where it’s now holding charities back.  By supporting digital operations (for example by continuing to develop its own digital services) the commission can help charities through this transition, and make them better as a result.

Strategic Objective 5: Keeping charity relevant for today’s world

Criticism is never easy to hear, and many in the sector will feel offended by last week’s comments, but sometimes the truth must be told, and it takes a trusted friend to do that for us.  So thanks for the wake-up call, and keep on administering that tough love when you need to, but above all, keep the sector honest by ensuring that the charities who you’re criticising, in particular, know about it and know what they can do to improve.

That way we can genuinely work together to make the world a better place.

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