Make charities report on impact and able to pay trustees without permission, think tank urges

Charities should be required to report on the impact they have made and should be able to pay their trustees without seeking the permission of the Charity Commission, according to the think tank NPC. 

In a letter to Oliver Dowden, the culture secretary, Dan Corry, chief executive of NPC, says the upcoming appointment of a new chair of the regulator presents an opportunity to rethink the commission’s priorities. 

Baroness Stowell announced last year that she would not seek a second term of office and would step down in February after three years in post. 

Corry says in his letter that the regulator has had a focus on public trust and expectation, whereas he believes it should be directed towards the difference charities make. 

“We think it would be better if the regulator’s role was also about the impact of charities, not merely public expectation, and the approaches that work, regardless of whether the public would expect them or not,” he says. 

Corry goes on to say that charity trustees should be required to report publicly on their mission and impact. 

“The Charity Commission’s trustee obligations should be rewritten to focus on mission and the impact achieved for the beneficiaries the charity serves,” he says. 

“Charity trustees should be required to report each year on the impact their charity is achieving in relation to its core mission and how it plans to improve, with the reporting requirement being proportionate to size. 

“This will ensure a focus on improving impact is embedded in the approach of all charity boards.”

He says charity regulators should be able to remove the charitable status of organisations that are “repeatedly unable to demonstrate any impact related to their core mission”. 

Corry’s letter also says the requirement for charities to seek permission from the regulator before paying their trustees should be removed. 

The complexity of the rules make it harder for smaller charities to do this, he says, and argues that all charities should have easier access to the option. 

“Paying trustees will increase the range of professional skills available in charity governance and is likely to increase the diversity of backgrounds that people enter the world of trusteeship from,” he says. 

“We recognise that paying trustees would not be the right option for every charity, but we think those who do want to explore this option should be able to do so without a complex process which favours those with greater resources.”

The letter also urges grant-making trusts to be more transparent by publishing both their payout ratio and the reasoning behind it each year.

Third Sector revealed this week that the government expects to appoint an interim chair of the Charity Commission when Stowell steps down.

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