Debra Morris and Warren Barr: Will the Lords report on charities be helpful?

Two academics from the Charity Law & Policy Unit at the University of Liverpool examine the viability of some recommendations made by the Lords Select Committee on Charities

Debra Morris and Warren Barr
Debra Morris and Warren Barr

We were pleased to see many of the points submitted in our evidence to the House of Lords Select Committee on Charities taken up in its report Stronger Charities for a Stronger Society.

The committee was right to acknowledge that, in a world of constant upheaval, charities have a fundamental role to play in navigating the waters. Here we consider some of its 42 recommendations in terms of their value and their viability.

Governance, accountability and size

A constant theme is the recognition of the diversity of the charitable sector, both in terms of activity but also, importantly, the size and structure of organisations. We value the focus placed on smaller charities throughout the report, although we do have a slight concern that it appears some of the recommendations about governance and accountability relate to larger rather than smaller charities. Proportionality is key, but good governance is good governance, and there is a compelling argument that smaller organisations need it as much as bigger organisations.

A recommendation that small charities should enhance their capacity to embrace digital technology is helpful. This will be crucial for all charities in the future. This should also extend to maintaining a social media presence, which is essential to making a positive impact and avoiding duplication of charitable activity at a local level.

The importance of impact and its evaluation is emphasised. Yet those tasked with encouraging the demonstration of impact by charities are "government" and "the charity sector". What about the Charity Commission, which must already assess public benefit? Or a strong sector champion? Evidence to the committee lamented the absence of such a body.

Optional, not compulsory

There is much reliance on the Good Governance – A Code for the Voluntary and Community Sector. The fact that the code is voluntary means those organisations most needing to learn from it are probably the least likely to adopt it, because either they feel they do not have the time or resources to dedicate to it, or they are unaware that they are poorly governed. Similarly, there are good proposals for better training provision for charities, but no suggestion that there is a requirement to participate. The resource implications of participation will probably weigh more heavily upon smaller organisations, but this should not detract from their need to engage with such initiatives.

Trusteeship and volunteering

Recommendations about promoting and valuing trusteeship in the workplace are to be welcomed. However, the introduction of a statutory right to time off for trustees, or additional flexibility for employees that wish to volunteer, are unlikely to hit the statute books while the Brexit agenda dominates.

Overwhelming support for the voluntary nature of trusteeship is unsurprising, but this was a chance, in our view, to reopen this debate. Instead, any debate has been closed down through simple repetition of the traditional views, which is disappointing. In some cases, the calibre of trustee needed may well lead to a requirement of experience outside the voluntary sector, where remuneration for service is the norm.

There is much in the report about the value of volunteering to the sector. The recommendations that charity law and policy should promote and support the role of volunteers, and that constraints on volunteering should be reviewed and addressed, are welcomed, but not fleshed out in the report itself. Further work will be needed to identify such constraints.

Money matters

The report highlights a worrying trend of smaller charities being exploited by larger ones in the commissioning process, and exhorts public sector commissioners to construct contracts to so as to prevent it. In these times of austerity, pleas to include core costs in contracts are likely to fall on deaf ears, as is an appeal to acknowledge the value of volunteering and costs associated with it in public sector grants and contracts.

The admission by Rob Wilson, the Minister for Civil Society, that not every government department currently offers payroll giving is shameful and it is good that this has been highlighted in the report, with an exhortation to resolve this.

Facilitating mergers

We applaud the additional support for the Law Commission’s work in this area and also the suggestion that the Charity Commission should be more proactive in terms of problem solving when it comes to mergers.

Speaking out

We approve of the strong statements about charities’ important advocacy role and some of the steps suggested to protect it. There are no recommendations, however, to ensure that funded charities feel free to bite the hand that feeds where necessary.

Charity regulation

Strong reservations are expressed about the Charity Commission’s proposals to introduce a charge for registered charities, and this issue will lead to significant debate in the coming months.

The report includes much evidence from witnesses who value the supportive role of the commission. We see great value in the suggestion that the commission should be clearer about what support it can and cannot offer and that it should be more proactive in helping charities to find the most appropriate sources of external support and advice. The committee suggests that, in exchange for charging charities, the commission’s enabling role be enhanced. This might be wishful thinking. A more interesting proposition might be a consideration of separating the advice and enabler role from the regulator role and handing over the former to another body.

Confidence restored

Confidence within the sector has been knocked recently through a serious of high-profile negative reports. This committee clearly has faith in the charitable sector, affirming its value to society. In the words of the committee: "There is much to celebrate in the charity sector and we want to encourage charities to have greater confidence in themselves."

Professor Warren Barr and Professor Debra Morris, Charity Law & Policy Unit, School of Law and Social Justice, University of Liverpool

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