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Why we need to be an enabling regulator – and what that means for our funding

Posted by: , Posted on: - Categories: Finance, Governance, Public Trust, Strategy

It’s been 3 months since I started as CEO of the Commission. During that time, I’ve met and listened to staff in the Commission’s four offices, visited trustees, staff and beneficiaries of charities ranging from small community groups to some of the largest organisations on our register – and I’ve had conversations with colleagues from across government.

The one, overwhelming impression these early encounters have made on me is that charities are more crucial to our way of life as a country than - despite my background in the sector – I had fully appreciated.

Charities are in every community, whether they be geographical communities, or communities of faith, interest, identity or culture. They operate at the micro level – providing a village hall, for example – and they perform crucial national functions. And indeed some of the charities we regulate have an impact at global level. It is simply not possible to imagine our national life without them.

Compared to the size of that sector, and its value to our country, the Commission as regulator is a tiny player. But our role is vital. We have important statutory objectives as set out by Parliament that protect and promote the integrity of charity, and beyond that, we have a unique convening power that allows us to positively influence the way in which charities contribute to our society or respond to events.

Our role in bringing together charities and government following the Grenfell Tower disaster, for example, is having a tangible impact on the lives of those affected by that tragedy. We also play an important role in helping government make a success of its priorities – in housing, education, security.

I have been hugely impressed by the professionalism and dedication of the Commission’s staff at all levels. The 300-odd officials that make up the Commission are doing a world-class job in regulating charities expertly and effectively according to risk and in furtherance of public trust.

So my early impressions and experiences of both the Commission and the charities we regulate have been overwhelmingly positive, and encouraging. And I see my principal job in the years ahead as being to continue to steer the Commission along the steady path that my predecessor, with the board, set for the organisation.

There are two areas, however, that I will be seeking to address, together with the board, in the years ahead.

First, I believe the Commission must develop and improve its services to trustees. It must continue to become easier to do business with us, we must be more available and accessible with advice and guidance for individual trustees. Charity trustees are, after all, overwhelmingly volunteers who are well-intentioned and passionate about the causes they espouse for the public benefit.

The public needs a regulator that can call out bad practice, but to secure the continued success of the charity sector we also need a regulator that is able to help trustees get it right. We need to recognise trusteeship as a national treasure that we must look after, grow, enable into the future.

Second, I am struck by the significant pressures on the Commission’s finances. Our resources, set against the continued increase in demand on our services, are becoming more tightly stretched every day. For example, applications to register as a charity have increased by 40% over the past 4 years, while our resources in real terms have halved since 2007.

If we are to continue to prioritise the issues and cases presenting the highest risks to charities and to public trust – which I believe is right – then by logical conclusion our ability to deal with lower risk work will decline. The service we provide to charities could become slower. Charities may have to wait longer to be registered, to have our consent to modernise or adapt to the changing needs of their beneficiaries.

I am making the case to government for transition funding to help us bridge the gap between our funding and the significant increase in demand on our services. But, in the context of continued pressures on public finances, these two insights – that the Commission must do more to support trustees, and that our current funding settlement does not allow that – lead me to one longer-term conclusion. Namely that we must start a sensible, open debate about larger charities making a modest contribution to the cost of parts of their regulation.

This is not a new idea, incidentally. There has been provision in primary legislation since 1993. It is also accepted practice across other parts of society that regulated communities make a contribution to their regulators.

So I am working with my teams, and the board, to draw up proposals for such a system, which I hope we will consult on next year. This work is at an early stage, but our current thinking is that in order to improve our existing services and develop new services for trustees, we would need to raise in the region of £7m annually from the largest 2,000 charities on our register.

I am realistic about the timescales involved in developing a system for charging charities. Doing so will require legislation, and Brexit means that Parliamentary time is limited.

And whilst I expect the debate with the sector on this to be heated, it is one I believe we need to have.

Charities in this country fulfil a significant role in society, and I want to ensure that the Charity Commission has the resources it needs to promote public trust and confidence in this vital sector.

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  1. Comment by Jeff Stephenson posted on

    Totally agree

  2. Comment by Jonathan Grosskopf posted on

    "He who pays the piper calls the tune!" How can the Charity Commission be seen to be an independent regulator if it is funded by large charities?

    • Replies to Jonathan Grosskopf>

      Comment by amandamc27 posted on

      Hi Jonathan - apologies for the delay in responding. We are hoping to open a public consultation for this next year, which will be available on our website.

  3. Comment by John Heaps posted on

    "The public needs a regulator that can call out bad practice, but to secure the continued success of the charity sector we also need a regulator that is able to help trustees get it right. We need to recognise trusteeship as a national treasure that we must look after, grow, enable into the future".

    Such a hope inspiring statement of intent; I am optimistic that we in Reading who are trying to protect Mapledurham Playing fields from a shoddy and predetermined proposal to use the land for building will get a fair hearing from this impressive new CEO.

  4. Comment by Diand Daniel posted on

    I fully agree with large charities making a modest donation. Small charities have to undergo the same rigorous scrutiny by in many cases would be unable to contribute although I am sure there are some which would voluntarily do so
    As the Secretary of a small local choir i with the Chair and Treadurer ensure that accounts etc are in line with requirements are regularly monitored and trustees kept up to date with all they need to know and I am grateful for the way the Caharitues Vommission is developing and working to help organisations like mine

  5. Comment by Jonathan Grosskopf posted on

    My original comment on 7th November is STILL being modrated. Why is it taking so long for you to make a decision?

  6. Comment by Jonathan Grosskopf posted on

    Wont the Commission have a "Conflict of Interest problem if they have to investigate a large charity that contributes to the very financial existance of the Charity Commission? It is nearly 3 years since the debacle called "Keeping Kids Company Ltd" and yet the Commission has produced nothing: not even an interim report!
    How will the Commission be seen to be independent by the Public, if it is funded in part or total by large charities, some of whom might in future need to be investigated and "held to account?"

  7. Comment by Alexander Taylor posted on

    I support Mr Grosskopf's comments. We certainly need a report on the "Keeping Kids Company", but with 300 staff supervising 170,000 charities what can we expect? (Is that really the case that we have so many charities?)

    Alexander H Taylor

  8. Comment by Chris Thomas posted on

    Charities already pay a voluntary levy to the Fundraising Regulator Why on earth would they pay again? The whole point of the levy was to avoid statutory regulation.

  9. Comment by C Duke posted on

    The Charity Commission are not fit for purpose I know no other organisation that can not provide material facts or answers to questions prior to submitting a Complaint . Proportionally these people take up a huge swathe of public monies and are not acting to protect the Interests of Charities or Beneficiaries

    Eg Local Authorities acting as Charities abusing Assett Disposals ( Parks and Public Open Space ) through Corporate Trustees with manifest Conflict of Interest and Blurring of Process