William Shawcross, chair of the Charity Commission, has told a conference that the charity sector is in crisis after the outcry over the Olive Cooke case, and suggested that the regulator could be completely paid for by charging charities for its services.
In a speech in London at an event organised by the investment firm Rathbones yesterday, Shawcross said that the death of the 92-year-old poppy seller Olive Cooke had highlighted issues that had caused "great anxiety among the public".
He said that many charities relied on raising money from the public to fund their work. "But serious concerns about the extent and nature of direct fundraising risk damaging public trust and confidence in charity," he said. "I believe this is a crisis for the charity sector that is testing the strength and capacity of self-regulation."
He said the commission’s own research suggested that about two-thirds of people felt uncomfortable about some methods of fundraising. "Trustees need to keep in mind how important it is to preserve public goodwill when they are faced with the challenge of raising funds to support the work of their charity," he said.
Shawcross said the commission was revising and strengthening its guidance on fundraising and trustees’ duties and that a draft version would be published for consultation later this year.
He said the regulator continued to "operate on a financial cliff edge" and could not absorb any more cuts to its budget. The commission’s budget from central government fell from £31.7m in 2007/08 to £21.4m in 2013/14.
"So long as the commission relies on the Treasury for our funding, we will always be at risk of further cuts," he said. "This is unacceptable to me. It puts public trust in charities at risk."
Shawcross said the commission should therefore examine different ways to put its funding on a more secure footing. "As part of that, we have to explore various options, including funding in whole or in part by charities themselves," he said.
No plans were in place, he said, and he was having conversations with senior people in the charity sector to understand their point of view. "So far, the people I have spoken to have been open to the idea – charities have always acknowledged how important it is that their regulator is well funded," Shawcross said. "But of course there are those who have concerns. There are indeed very real questions to answer – including how the commission’s independence, which is so vital, would be protected under such an arrangement."
He said the commission had begun working with umbrella bodies on trialling a pre-registration service "akin to the passport-checking service".
"This would mean prospective charities could have their registration applications professionally checked by their umbrella body before submitting them to us," he said. "The aim is to help eliminate basic errors in applications, which slows down our work and causes inefficiencies for us and frustration for applicants."
Shawcross said that if the trial was successful the commission would launch the service with a limited number of umbrella bodies with a view to involving other groups in the future.