Cathy Pharoah: Opening up public services raises the key question of accountability

The UK needs a debate about how donors and philanthropists relate to those who use the institutions they fund, says our columnist

Cathy Pharoah
Cathy Pharoah

When the Commission for the Compact was abolished in April, the sector's relationship with government was still a work in progress. Sector-government partnerships raise challenges about independence, rules of engagement, and terms and conditions. Are we prepared for the new risks lurking round the corner of the big society as the Open Public Services White Paper begins, as David Cameron put it last week, to loosen "the grip of state control"?

There is plenty of evidence that the philanthropic donors and volunteers who will now have greater opportunities to become involved in local services have agendas of their own. The vision and support of the former Saga boss, Roger De Haan, for the regeneration of Folkestone's historic town centre was met with general acclaim and local support. It has been widely recognised that the scheme's origins outside statutory local frameworks were the source of its creativity, imagination, local ownership and drive.

But philanthropic support is not in itself a guarantee of a smoother path to local involvement. Donor sponsorship of academy schools has often been controversial - for example, in Pimlico, central London, where many users wanted a school to remain a community one. On Merseyside, disagreements between the Friends of the National Museums Liverpool and the museum's board, about the value of various cultural activities, led ultimately to the disbanding of the FNML, an organisation of 1,700 members which had raised more than £800,000 for the museum and given thousands of hours of unpaid labour. Further squabbles involving volunteers, trustees, local authorities, central government and unions finally led to Liverpool pulling out of the big society vanguard programme.

There are increasing numbers of examples internationally of the uncertainties that can surround philanthropic support. This month, the Wall Street Journal wrote about a power struggle in Detroit, in the US, between the city authorities and the Kresge Foundation, which has invested millions of dollars in developments there. Progress has stalled, leaving some of the poorest US communities in limbo. The city authorities feel that they, not charitable foundations, represent and understand community need. But if they try to push ahead or steamroller projects, they may jeopardise the foundation investment they need.

The issue of donor accountability is still in its infancy in the UK, and needs much greater debate as we move into an era of policy aimed at increasing levels of philanthropic support, whether cash or in kind, and at shifting power from statutory authorities to individuals and communities. Donors and volunteers represent the mixed interests within the big society. Their lack of accountability would be enough to give any Compact commissioner sleepless nights.

Cathy Pharoah is professor of charity funding at Cass Business School

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