Finance news: Don't be afraid to make a profit, commission chief tells charities

Charities are becoming more receptive to the idea of making money and turning a profit, according to Geraldine Peacock, chair of the Charity Commission.

She told the annual conference of the Charity Finance Directors' Group last week that "money and charity have always been uneasy bedfellows". But she asserted that attitudes towards income generation were changing.

"For too long we have been whingeing about what other people are prepared to do for us," Peacock told about 400 delegates. "But the sector has growing confidence in itself. We don't need to go cap in hand to funders - we can be self-sufficient.

"There is a growing understanding that charities need to be profitable," she said. "They also need to know what they want to do with the profit."

Speaking three weeks before she leaves the commission, the former chief executive of the Guide Dogs for the Blind Association said the move towards self-sufficiency was driven by the restrictive conditions that often accompanied grants and a realisation that traditional sources of income, such as legacies, were drying up or facing competition.

This meant charities should examine which of their assets could be exploited to generate income and should rethink the idea of providing free services.

"Charitable doesn't necessarily mean free," she said.

As a long-time advocate of social investment, in which charities make money through projects that fulfil their mission, Peacock urged larger charities to set up loan funds for their smaller counterparts and mooted the idea of support for "allied causes" - the RNLI financing air ambulances, for example.

She said the commission was eager to support income generation efforts by charities. "I have tried to change the culture at the commission," she said. "I hope we have become a more welcoming organisation. If you want to do something, it won't be us that stops you."

In another address to the conference, Pesh Framjee, special adviser to the CFDG, said charity finance directors were becoming the "deputy chief executives" of their organisations. "If the chief executive is particularly outward-facing, I see the finance director as taking a leadership role in the organisation," he told delegates. But he also warned that unless finance directors took more responsibility for "softer" performance measures in their organisations, they risked being marginalised.

FACT FILE

Geraldine Peacock, the chair of the Charity Commission, said that charities need to be profitable organisations

She made the remarks at the annual conference of the Charity Finance Directors' Group

Peacock said that the move towards self-sufficiency among charities was driven by restrictive conditions that accompanied grants and an awareness that traditional income sources were drying up

Larger charities should set up loan funds for their smaller counterparts, she said.

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