The definition of charity has become so broad that it could end up being meaningless to the public, Sam Younger, the chief executive of the Charity Commission, has warned.
Younger was speaking at a session called "What does the future hold for the sector?" at the Institute of Chartered Accountants in England and Wales’s charity and voluntary sector group conference in London yesterday.
"I worry that we are moving into an era where the boundaries between the charity world and other sectors are becoming increasingly porous and ill-defined," he said.
Younger said competition with commercial organisations and activities such as joint ventures and subcontracting made him concerned that the definition of a charity was becoming so broad it could become meaningless.
He said there was a case for looking into the possibility of having different categories of charitable organisation in order to make it clearer to the public what they do.
"Categorisation of charities other than as small or large is something we need to explore further," said Younger. "For example, a distinction could be made about whether a charity fundraises or not."
His comments echo those made by Dame Suzi Leather, the former chair of the Charity Commission, who used her final speech in the role in June to voice her concerns at a "blurring of the boundaries" between charities and other social organisations.
Also speaking at the session, Mark Lever, chief executive of the National Autistic Society, warned that charities were in danger of losing public trust and perceived independence as they became more businesslike.
"We are operating in a complex environment," he said. "There is a danger we’ll lose the greatest of the intangible assets charities have, which is public trust and perceived independence."
Lever said charities were getting larger and were having to compete with the private sector. "The added value and hidden benefits of community-generated services get squashed out by price," he said. "Those that can compete and win contracts are seen by the public as being like businesses."
The outsourcing of more government contracts meant charities were starting to become nervous about campaigning on certain issues and were less likely to campaign so vigorously, he said.
Lever said brand was becoming increasingly important for charities as they competed for lucrative charity of the year partnerships. To improve their recognition and image, they were investing in expensive agencies, he said, but this could lead people to question how much of their donations were reaching the causes they wanted to support.
Helen Stephenson, director of the Office for Civil Society, represented the government at the session. Responding to a question from the floor about whether trustees of large charities should be paid, she said the government’s view would be included in its response to Lord Hodgson’s review of the Charities Act, due in the coming weeks. Hodgson recommended that charities with incomes of more than £1m should be allowed to pay their trustees without permission from the Charity Commission. Stephenson said her personal view was that common sense should be applied.
"There has got to be some way to recognise different sizes and the responsibility for risk in an organisation’s structure," she said.