Two charities withdraw Cage funding | BeatBullying breached own financial policies | Osborne urged to announce £40m charity fund in Budget

Plus: Public sector contracting 'leads to mission drift' | Charities pay tribute to Terry Pratchett | Founder of The Kiltwalk resigns over concerns about how much money goes to good causes

The Joseph Rowntree Charitable Trust and the Roddick Foundation have confirmed that they will no longer provide funding to the advocacy group Cage, after pressure from the Charity Commission. The regulator issued a statement on Monday confirming that it had operational compliance cases open into the two charities over their funding of Cage, which is not a charity, after Cage appeared to say that the UK security services played a part in radicalising the terrorist known as "Jihadi John".

The defunct charity BeatBullying did not comply with its own reserves policy before going into liquidation last year, a Charity Commission report has concluded. However, the regulator’s report on its operational compliance case into the anti-bullying charity found no evidence that its demise was due to financial mismanagement.

Acevo and the National Council for Voluntary Organisations have urged George Osborne, the Chancellor of the Exchequer, to use next week’s Budget statement to announce the formation of a £40m sustainability fund for charities. The fund was first announced by former charities minister Nick Hurd more than a year ago in an interview with Third Sector, and the Cabinet Office opened a consultation on its design in May last year.

New forms of contracting between local government and the voluntary sector could be stifling entrepreneurial creativity and giving rise to "mission drift" among charities, according to a report from the Joseph Rowntree Charitable Foundation. The Cost of the Cuts: The Impact on Local Government and Poorer Communities examines the effects of the government’s austerity measures at a local level and is partly based on interviews with voluntary sector staff.

Charities have paid tribute to the author Sir Terry Pratchett, who has died aged 66. Alzheimer’s Research UK, of which Pratchett was a patron, said the legacy he left to dementia research was huge.

Carey McEvoy, the founder and chief executive of the charity The Kiltwalk, has resigned and the organisation is undergoing a restructure amid concerns about the amount of funds that it passes on to good causes. Of the £1.6m income The Kiltwalk had in 2013, £776,406 went to participating charities.

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