Charities are vital to civil society in our country and, in a rapidly changing environment, it is critical that we understand the challenges and opportunities the sector faces.
With this in mind, last year the House of Lords agreed to establish a Select Committee on Charities to look in more detail at some of the issues the sector faces. I had the privilege of chairing the committee, which published its report, Stronger Charities For A Stronger Society, today. I was fortunate to work with committee members who were not only extremely interested in the work of charities but also knowledgeable.
We heard evidence from a wide range of witnesses: charities themselves, umbrella bodies, donors, governance and digital skills experts, the Charity Commission and the government, among many others. We also made sure to hear the voice of smaller charities, with round-table events in Cardiff, Manchester and London involving representatives of more than 40 small charities.
As we already knew, the issues facing the sector are as diverse and multifaceted as charities themselves. We did, however, identify some key recurring themes from the evidence we heard and the places we visited.
First, and most critically, many charities continue to face severe problems in relation to future funding. We heard that some charities are increasingly relied upon to support vulnerable people and others in need, as the state withdraws services, but that they are expected to fulfil this role with ever-diminishing resources. Grant programmes are being reduced or eliminated, and contracts are increasingly prescriptive and short-term, stifling charities’ ability to innovate, cover costs and plan for the future. The commissioning process often excludes small charities because of the complexity of its requirements and expectations of scale.
Our report therefore recommends that public contracts should allow for reasonable core costs and that small charities are given greater support in navigating the commissioning process. We recognise the financial pressures faced in the public sector, but investment in a vibrant and diverse charity sector can improve outcomes for beneficiaries and save money in the long run. We heard that charities face a potential annual loss of £200m of European funding after Brexit, and we call upon the government to study the impact on the charity sector of leaving the EU and bring forward proposals to address any negative consequences.
Second, we heard repeatedly that charities were worried about messages from government concerning their advocacy role. In particular, it was felt that consultation on the lobbying act and on last year’s proposals for an "anti-advocacy" clause in public grants had been poor. We recommend that the government should show more regard for the interests of charities when bringing forward new proposals for charity law and policy, including proper notification and better consultation.
Strong charities depend on good governance, and we heard a great deal about the crucial and selfless work that trustees do to help their charities deliver for their beneficiaries. There is potential to strengthen governance with more support for new trustees and greater promotion of training opportunities. We recommend that the government should hold a public consultation on whether there should be a statutory duty to allow employees of large organisations to take time off for trustee duties.
We heard that digital innovation is patchy in the sector, with some charities at the cutting edge, but others struggling to adjust and adopt new tools, thus missing out on improving their fundraising and communications. We suggest that charities consider appointing "digital trustees" – trustees with experience of digital technologies – to help them develop the skills and confidence to use new tools to help their beneficiaries.
These are just a few of the many issues on which the committee heard evidence and made recommendations. We hope that our report goes some way towards informing debate about the future of the sector and ensuring that charities’ fundamental role in our civic life is respected and supported. More than anything, we hope that it encourages charities to have confidence in themselves and the value of their work.