OPINION: Update public view of charity

LISA HARKER, deputy director of the Institute for Public Policy Research

Spotting the difference between a charity, a voluntary organisation and a social enterprise is a bit like trying to distinguish between the surnames of the South Korean national football team.

No doubt the clever brains of those in the Government's Performance and Innovation Unit have cracked it. We await the answer in the outcome of their review of the laws and regulations governing the charity sector.

But will the unit succeed in its mission to find a definition of charitable status that is "broadly in step with the public's concept of charity"?

It's difficult to see how. A quick straw poll of my nearest and dearest elicits the view that charities are not-for-profit organisations run by volunteers on a shoestring. Nothing wrong with that: many of them are.

But how do you reconcile that image with reports that British charities lost a staggering £3 billion on the stock market last year?

Such is the breadth of the organisations that fall within the charitable sector umbrella that arguably the differences within the sector almost eclipse the charitable/non-charitable divide. Nowadays a charity is as likely to be a multinational entity with professional staff managing a portfolio of investments, as a strapped-for-cash outfit reliant on the efforts of volunteers. The UK charity sector has assets totalling more than £65 billion. The future for the rich kids on the block - the 150 or so charities whose annual incomes exceed £10 million - is becoming more dependent on the kinds of stock market investment skills normally associated with the for-profit sector.

Such diversity now characteristic of the charitable sector is a welcome indication of its flourishing health. But the Performance and Innovation Unit is right to be concerned about whether the public's view is in keeping with reality. It is tempting for charities to encourage public perceptions of the sector as having a hand-to-mouth existence. But if public perceptions do not keep up with reality, charities are in danger of losing the levels of integrity and trust that have come to be seen as enduring characteristics of the sector.

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