Charities face kitemark upheaval

The pressure on charities to publicly measure their performance is about to increase dramatically.

One of the recommendations expected from the Government review of the voluntary sector due next month is for a set of benchmarks based around fundraising performance, management costs and the impact on beneficiaries.

It is likely to be tied to some form of "kitemark

accreditation system, according to sector leaders who have seen sections of the draft report.

However, it is expected to stop short of imposing any kind of "league table

as some organisations and charities had feared following demands by the National Audit Office last year. Instead, the sector will first be given the chance to show what it can do itself.

The long-awaited report, by the Cabinet Office's performance and innovation unit (PIU), will bring closer a widespread reshaping of the sector, covering such things as the proper role of the Charity Commission and the definition of what qualifies for charitable tax relief. The main impetus is the Government's strategy of enlisting the voluntary sector to deliver much of its programme.

The Treasury is engaged in a related but more specific investigation into how the voluntary sector can be involved more closely in providing public services.

Recent debate over fundraising activities means some kind of accreditation system covering fundraising, ethics and the effectiveness of charities will be high on the agenda for the PIU.

"The momentum for some form of accreditation system is unstoppable,

said Simon Hebditch, director of policy at the Charities Aid Foundation.

"Over the next few months it will be up to the sector to come up with proposals as to how it wants to move forward."

The recommendation is supported by sector leaders who want to head off imposition of regulation. The Institute of Charity Fundraising Managers, the Charities Aid Foundation and the National Council for Voluntary Organisations (NCVO) have started to develop new fundraising benchmarks.

However, it is still not clear who would be the official standard-setting bodies. Organisations such as the NCVO and Institute of Fundraising Managers could find themselves competing to run different areas. The winners are likely to see a big expansion in their remit and activities. Another option is a completely new "social auditing

body.

Sector leaders also expect the PIU to recommend some kind of public-benefit test to qualify for charitable status in the future. Organisations not obviously for public benefit such as fee-paying schools may have to adapt their practices in order to keep their charitable status. NCVO chief executive Stuart Etherington said: "If they didn't review the public-benefit test we would be extraordinarily disappointed."

The role of the Charity Commission is also likely to be tackled and its roles as a regulator and adviser could be separated. Etherington said: "The Commission has too wide a range of functions. Other intermediaries could play a role in the advisory functions."

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