Investment in social impact bonds 'will have little effect on the voluntary sector', survey shows

Research to be published next month shows 86 per cent of charity respondents said the extra £80m announced in the Spending Review will have limited or no effect

More than eight out of 10 charities believe additional government investment in social impact bonds will have no or limited impact on the charity sector, research due to be published next month will show.

Advance figures from a survey of 350 charities conducted by the Charity Finance Group, the Institute of Fundraising and the professional services firm PwC, show only 10 per cent of respondents thought the investment would have a positive or very positive impact, while 45 per cent thought it would have a limited impact and 41 per cent believed it would have none.

The research, carried out between December and January for the forthcoming annual publication Managing in the New Normal, asked charities to assess the impact of a number of government policies announced at the Spending Review on the operating environment for charities, including the extra £80m announced by the Chancellor to support social impact bonds.

The survey showed that the most popular measure from the Spending Review was the review into the Gift Aid Small Donations Scheme, which 37 per cent of respondents said would have a positive or very positive impact.

Meanwhile half of the charities surveyed said freezing the Charity Commission’s budget at £20m for the rest of the parliament would have a negative or very negative effect on charities.

Only 5 per cent said they believed the apprenticeship levy, which will take money from employers to fund apprentice training, would have a positive or very positive impact on the charity while 20 per cent were concerned its effect would be negative or very negative.

Caron Bradshaw, chief executive of the CFG, said: "This survey is a call from the charity sector for the government to focus on the bread and butter issues affecting charities.

"Social investment has its place, but maximising tax reliefs, providing support to invest in sector skills and effective regulation are core priorities. Although times are tough, the government should certainly reject any calls for more cuts to the Charity Commission."

Charities were also asked to select two policies they would like to see the government announce in today’s Budget. The most popular measure was support for greater uptake of Gift Aid, supported by 71 per cent of respondents, while 70 per cent supported investment in capacity-building and training for charities in finance, fundraising and governance.

Almost a quarter of respondents wanted more investment in the commission, while growing the social investment market was the least popular, gaining the support of just 21 per cent of respondents.

The full report is due to be published next month.

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