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Analysis: The Charity Commission's plan to save £8m

Kaye Wiggins lays out its proposals for the future, asks its chair, Dame Suzi Leather, to explain them, and examines how they relate to a consultation with stakeholders and research on public attitudes

Charity Commission
Charity Commission

REGISTERING CHARITIES

The plan

The commission will aim to process applications for charitable status more quickly than in the past and will stop helping organisations to refine their applications if they are declined.

Dame Suzi Leather says: "We will stop hand-holding through the registration process. I have been concerned about the time that it has taken to resolve the registration in some cases. For example, Full Fact, which monitors the accuracy of statements from the press and politicians, first applied in mid-2009. We finally rejected it at the end of 2010 - that's too long. We always intend to be helpful to charities but sometimes this leads to a rather proactive, iterative process. I think we should be prepared to say to charities that we will make a timely decision and they can appeal to the charity tribunal if it has gone against them."

Consultation and research

Some 78 per cent of respondents to the commission's consultation with the sector said they thought it should be "rigorous and questioning" before accepting registrations. A report by the polling firm Ipsos Mori, based on focus groups with members of the public (see below), concludes: "Maintaining the register was seen as absolutely crucial. Despite the lack of awareness of exactly what this involves in practice, the fact that charities are required to register and the presence of a charity number signifies legitimacy and is reassuring when making donations."


 

REGISTRATION THRESHOLD

The plan

The commission is considering whether to raise the £5,000 income threshold below which charities are not required to register, but it has not yet made a decision.

Leather says: "I think the issue of thresholds needs to be kept under review. The public thinks the £5,000 mark is too high and this sends an important message to anyone who's thinking about the issue. We know that many small charities value their registered status."

Research

The public thought the threshold for registration should be lower than £5,000, not higher. The Ipsos Mori report says: "There was generally surprise that organisations with an income under £5,000 did not have to register with the commission. There was widespread agreement that the threshold for compulsory registration should be much lower than £5,000. Around the £500 level was suggested by one group, as there was concern that people could easily set up a number of bogus charities below the £5,000 threshold without being challenged."


 

ADVICE AND GUIDANCE

The plan

The commission will carry on publishing general advice and guidance, but will give one-to-one advice only in cases where it is legally required to do so. It will encourage umbrella bodies to take on responsibility for one-to-one advice.

Leather says: "Hopefully, this will lead to an increase in the membership of umbrella organisations. It isn't our intention to make charities more dependent on lawyers."

Consultation and research

The majority of respondents to the consultation (68 per cent) said the regulator "should be a key enabler through the regulatory advice it provides to individual charities"; 32 per cent said it should "put its guidance on the website and not give any advice on a one-to-one basis to individual charities". The public thought the regulator should provide "a base of easily accessible information and guidance", according to Ipsos Mori. It also concluded that in the context of cuts "advice in general was perceived to be less important than monitoring and enforcement".


 

INVESTIGATIONS

The plan

The commission will concentrate on cases where there is a "serious and systemic risk" to public trust and confidence in charities.

Leather says: "The expectation that the commission can respond to absolutely everything that a member of the public might draw our attention to is just living on another planet. There are 180,000 charities. You have to adopt a proportionate response. That will sometimes mean that people are disappointed that you haven't taken up what they regard as an incredibly important and pressing issue. We will have to be more focused than we have ever been."

Consultation and research

The commission's new approach might be controversial. About 74 per cent of respondents to the commission's consultation agreed with the statement "the commission has a responsibility to investigate any case where there is prima facie evidence of a registered charity breaking charity law"; 26 per cent agreed that "the commission should investigate individual organisations only rarely and in cases where large amounts of charitable funds are at risk". The public thought this was the commission's most important role. "Ensuring compliance with legal obligations and investigating and intervening to resolve things that have gone wrong was seen, along with the register, as absolutely key," the Ipsos Mori report says.


 

INFORMATION ON CHARITIES

The plan

The commission will review the type of information it requires from charities and what it publishes about them. This could involve publishing more information about the proportion of donated money that is spent on administration.

Leather says: "The commission and sector need to be more mindful about the fact that the public is very, very interested in what proportion of the money it donates goes to the end cause. It's right to aim for the commission to be able to use the information we get from charities in a way that chimes with what the public values about that information."

Consultation and research

Fifty per cent of respondents to the commission's consultation said the regulator should "focus on the public information it gives about the charity sector". Half also said it should "encourage others to do more to provide information to the public".

The Ipsos Mori report says: "It is important to note that a top-of-mind issue for many people is the proportion of charity donations that reaches the end cause. It should be noted that this is not currently directly monitored or generally investigated by the commission."


 

LEGAL PERMISSIONS

The plan

Parliament is due to review the 2006 Charities Act later this year. The commission will ask it to consider whether charities must continue to receive permission from the regulator before making certain decisions, such as payment of trustees and the sale of land. The commission will also aim to reduce the amount of bureaucracy involved in the processing of these permissions.

Leather says: "We want trustees to be able to take decisions about their own charity, wherever possible, within the law. We want to minimise the times they need to come to us for permission and streamline the way we deal with this. The issue of the payment of trustees was one of the most polarised in the consultation. I think the right place for this to be resolved is in parliament."

Consultation and research

This was one of the most polarising issues in the consultation. Fifty-four per cent of respondents said trustees should be able to "make their own decisions on issues such as trustee payments or selling land". The Ipsos Mori report says: "There was a feeling that once charities have met the requirements for registration, they should not necessarily need legal consent from the commission to do something out of the ordinary or change how their charity operates. It was thought that if those running a charity are trusted with this responsibility, they should be able to take action in the best interests of that charity."


 

ORGANISATIONAL STRUCTURE

The plan

The commission will make about 140 posts redundant by October. It will have fewer layers of management and will review whether it should maintain all its offices in London, Liverpool, Taunton and Newport, south Wales.

Leather says: "I think fewer layers between caseworkers and the chief executive are needed. In an organisation that is losing a third of its posts, it's not necessary to retain the same management structure."

She declines to comment on whether the commission would keep all four offices.

Research

This was one of the key areas where members of the public thought the commission could save money. The Ipsos Mori report says: "There was a belief that significant funds could be saved by the commission simply through efficiency measures such as not printing or mailing out guidance manuals and cutting back on administrative functions and high salaries."


 

OTHER INCOME SOURCES

The plan

The commission will look for new sources of funding after the current funding round expires in 2015. It will encourage umbrella bodies to take on any functions that it ceases to provide.

Leather says: "The issue of having a different way of funding the commission is clearly not one for this spending review. It's the responsible thing to do for the period after that to look at alternative ways of funding the commission, which would ensure we had a funding base we can rely on." Asked whether this would mean charging charities for services, she says: "I don't think I can say anything more about this until we have done the work."

Consultation

About 31 per cent of respondents to the commission's consultation said another body could take on some of the functions currently performed by the regulator. The National Council for Voluntary Organisations, the charity tribunal, local councils for voluntary service, Companies House and HM Revenue & Customs were mentioned as candidates for this.


 

£29.3m - The Charity Commission's budget in 2010/11, the last year before the cuts

£21.3m - The commission's budget in 2014/15 after a reduction of more than a quarter in its funding

 


 

The polling firm Ipsos Mori ran four focus groups to ask members of the public what they thought about the Charity Commission. This is what some members said ...

"When you see a registered charity number, if it's legitimate and from the Charity Commission, that automatically instils in you trust in that charity" - Focus group member in age range 35-59

"You could probably save that amount of money by sacking the top four directors of the Charity Commission" - Focus group member in age range 21-34 referring to the sum the commission has to save in 2011/12

"A regulator is a place for people that need to go and say that this is out of order, could you put it in order" - Focus group member in age range 35-59

"£5,000 is a lot of money ... I could open a charity, stop at £4,999 and spend the money on myself" - Focus group member in age range 21-34 referring to the fact that charities with incomes below £5,000 don't have to register

"The government body should, without any warning, send a group of accountants into charities, check where the money's going and what it's actually being raised for" - Focus group member in age range 35-59.

 

See Dame Suzi Leather interview

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