Charities should embrace the social enterprise model as part of their work and not become too dependent on public funds, members of the House of Lords heard yesterday.
Speaking in a debate about charitable giving yesterday, Lord Wallace of Saltaire, a Liberal Democrat peer who speaks for the Cabinet Office, raised concerns about charities that depend too much on public funding and said the social enterprise model was "very much part of what charities should be doing".
The peer was responding to a question by Baroness Pitkeathley, a former chief executive of the National Council for Carers – now Carers UK – and founding member of Acevo, who asked whether the government would take steps to encourage giving. The question came in the light of the recent survey, UK Giving 2012, in which respondents reported giving 20 per cent less to charity.
She also pointed to the survey by the Charities Aid Foundation this week, which found one in six charities thinks it will have to close over the coming year and asked how this would impact on the government’s vision of the voluntary sector as a vital part of service delivery.
Wallace said the report suggested a worrying drop in giving, but he said it was yet to be confirmed as a trend and was a subject of debate within the sector.
"I have visited a large number of additional charities since I took over this post," he said. "I am shaken by some that I meet in Yorkshire that are almost entirely dependent on public funds. That seems unwise. I strongly approve of those that raise some of their money through their own activities. The social enterprise model is very much part of what charities should be doing."
Responding to a question from the Labour peer Baroness Uddin about the impact of the economic crisis on black and ethnic minority women’s organisations, Wallace said: "What happens to different charities depends partly on how heavily they depend on public funds and what their donor or social enterprise base is."
The wide-ranging debate touched on a variety of issues from street fundraising to volunteering.
The Liberal Democrat peer Baroness Barker called for Gift Aid to be fully digitised. Wallace said he strongly agreed. The government was also looking to improve payroll giving, he said.
Baroness Berridge, a Conservative peer, asked whether the government had assessed whether the decline in charitable giving was connected to the increase in what she called "charity mugging" and why it was not licensed by local authorities.
Wallace said Lord Hodgson dealt with face-to-face fundraising in his review of the Charities Act 2006, which was published in the summer.
The cross-bench peer Lord Best said he hoped support for volunteering would be extended beyond sporting activity. Wallace said the government’s ‘join-in scheme’ was intended to take on the spirit of the Olympics and extend it to a whole range of activities.