Editorial: The sector's phoney war is fast coming to an end

Charities should expect the Government to be hard-headed in a failing economy, says Stephen Cook

Stephen Cook, editor, Third Sector
Stephen Cook, editor, Third Sector

While the high street is beginning to take serious hits from the advancing recession, many charities are still in a kind of phoney war. But a new survey from the Institute of Fundraising and the Charity Finance Directors' Group concludes that the real impact on the sector is likely to be felt sooner than in previous recessions (Third Sector Online, 1 December). Income is already falling and wise charities are making contingency plans.

So how will the Government help out? Last week's summit between sector leaders and third sector minister Kevin Brennan was at first glance disappointing: nothing on the ambitious wish list from chief executives body Acevo was granted. The public statements afterwards were damp squibs: constructive, useful, jam tomorrow - that was the message.

The suspicion might form that the sector is being fobbed off: you've had a good run, lads, but we've got bigger things on our minds now. The acid test will come next year, when the action plan promised by the minister is due to appear - and when more organisations will really be feeling the pinch, if the survey is to be believed.

Early noises from the Office of the Third Sector are that there won't be huge amounts of money, and charities can't expect to be bailed out just because they're short of cash or have lost money in Iceland. They're likely to have to produce solid evidence that their beneficiaries are suffering before they qualify for special help.

The OTS also professes a genuine interest in establishing a new social investment bank. It could be started by using public money while a scheme is sorted out for putting in unclaimed assets from banks, and it could play a role in helping with the kind of liquidity problems charities have in common with businesses.

But a generally hard-headed approach by the Government seems inevitable, and the more hopeful requests are unlikely to be met. Like the rest of the economy, charities are going to take a knock and will be forced to consider liquidation and mergers. Former Charity Commission chair Geraldine Peacock remarked recently that 60,000 charities were withering on the vine. Some, inevitably, will finally fall to the ground. Maybe we'll even see a halt to the seemingly unstoppable growth in the number of charities, which is currently rising at the rate of 1,000 a year. And maybe there'll be a leaner sector in a couple of years.

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