Giving money to charity can be - to put it rather crudely - a bit like buying a used car: you can see what it looks like and listen to the salesman's patter, but you've no way of really knowing what's going on under the bonnet.
This is the problem Martin Brookes of New Philanthropy Capital was addressing when he proposed recently that a new organisation should be set up to scrutinise - and thereby help to improve - the performance of charities. They receive £9bn a year in donations and £1.3bn in tax benefits, he pointed out, and closer assessment, as well as being desirable, was probably also inevitable in today's highly regulated society.
The fact that the speech hasn't won him new friends in the charity world probably indicates that he's on to something important. A common theme in the reactions is that charities are highly regulated anyway, and that his proposal would just mean more red tape - see one of the readers' letters on the page opposite. There is indeed a lot of red tape for charities, much of it associated with applying and accounting for funding, and there is an urgent need to reduce this. Charities are also subject, like any other organisation, to the excessive precautionary bureaucracy of a risk-averse society. Of actual regulation, however, there is not very much: the reporting requirements of the Charity Commission are hardly onerous, and they are mostly to do with conforming to accounting procedures. Otherwise, the commission is concerned with giving advice and, in rare cases, addressing wrongdoing. The advice-giving functions of the commission are complemented by the recent burgeoning of infrastructure initiatives such as Capacitybuilders and exhortatory outfits such as the ImpACT Coalition, which encourages charities to be more open and accountable.
But in among all this, there's no independent organisation that systematically says: hold on, just what do charities achieve? Which are good, and which are less good? The nearest we have to an organisation of this kind is the fledgling Fundraising Standards Board, but the assessments it makes are of compliance, not of performance: it requires member organisations to commit themselves to a set of standards that it uses as a benchmark for considering complaints. It doesn't go in there and check whether the performance of its members is up to scratch.
Given all the change and turmoil already under way in the sector, Brookes's proposal for a new non-departmental government body to scrutinise charities is unlikely to get off the ground in the short term, which means New Philanthropy Capital will probably be left to act as the pioneer for some time yet. But a snowball has been rolled off the top of the hill, and there's no knowing what it might eventually become. One possibility is an accreditation model along the lines of AccountAbility, which is already used by some aid charities.
Such a body would not only ask charities to sign up to its standards - it would also actually investigate whether its standards were being met before it conferred its seal of approval, and it would carry out periodic checks. A study by Rene Bekkers of the University of Utrecht indicated that accreditation in Holland led to higher levels of giving - and that, after all, is the main thing that everyone's looking for.