Donors will become increasingly sceptical over the next 10 years that investing in charities is the best way to solve social and economic problems, according to the president of a specialist charity law firm.
Speaking at a European Association for Philanthropy and Giving event in London yesterday, Blake Bromley, president of the Benefic Group, an international law firm based in Canada, predicted that donors would start to question whether charities, because of the legal framework they worked in, were the best vehicle to cure society's ills.
"The problem is that too often charity law allows donors to ameliorate social problems rather than solve their root causes." he said.
He gave the example of social housing, where registered charities had to provide housing exclusively to the economically needy: "The result is that charity law only allows you to build a ghetto for poor people...Charity law does not allow mixed income housing which will achieve better demographics and social policy."
Bromley, speaking about what philanthropy would be like in 2021, said funders would look at whether a social enterprise or corporation could produce more sustained impact than charities.
"We have allowed the short-term benefits of using tax incentives to attract money into the charitable sector to dissuade us from critically examining whether the charitable sector is necessarily the most effective and efficient place to achieve long-term social good," he said.
He also predicted that the philanthropic sector would no longer include religion in 10 years. He pointed to the Charities Act 2006, which made it a statutory requirement that religious charities must be able to show that they provide public benefit.
"In secular courts, regulators will gradually begin to hold that religious organisations do not meet the public benefit test of being charities," he said.
"My crystal ball does not provide a pretty landscape for charities in 2021," he concluded.