Charities with cash in the bank 'should not continue fundraising'

Call for tough action on charities with large reserves

The Charity Commission should prevent charities with large reserves from fundraising, some respondents to the Charity Commission's third stakeholder survey have suggested.

A report on the interview-based survey of 66 people drawn from the charity sector, government and law and finance, carried out by DHA Communications, says some respondents raised doubts about whether charities with large reserves should fundraise.

"Some respondents question whether cash-rich charities should be allowed to have such large reserves and still seek money from the public and other funds, especially in this economic climate," the report says. "Some want to see firm action in this area."

The report, Delivering Effective Regulation for the Sector and the Public, also reveals concerns that there are "literally thousands" of unregistered organisations above the registration income threshold of £5,000. Some respondents suggested setting up a hotline so members of the public could report charities that break the law or are not registered.

The survey showed a continued improvement in the commission's ratings across a range of indicators since the last survey in 2006. Its overall effectiveness was rated at 68 per cent, compared with 63 per cent in 2006 and 49 per cent in 2004.

Dame Suzi Leather, chair of the commission, said she was encouraged by the findings but the commission should not become complacent.

DID THE COMMISSION DO WELL?

Survey respondents said yes...

Chief executive Andrew Hind was "universally respected for having transformed the organisation", and chair Dame Suzi Leather was thought to present a "professional public face". The commission's approach was seen as less bureaucratic, and respondents felt it no longer used its powers as a "blunt instrument". They also praised the regulator's website and online register, and the quality and even-handedness of its guidance.

...but they had reservations

An "overwhelming" number of respondents worried that service levels would suffer because of the extra duties imposed by the Charities Act 2006. Some said the regulator should have made the case more powerfully for increased funding. There was a feeling that good understanding of the sector's needs at the top of the commission was not always reflected lower down, and that advice was sometimes inconsistent and too generic. Respondents thought the commission's expanded board had made "almost no external impression" and was not diverse enough.

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