Lottery merger may pose threat to independent charity funding

Mathew Little and Annie Kelly

A potential new threat to the funding of charities which are critical of national and local government policies emerged at last week's CharityFair 2003 in London.

Lady Brittan, chair of the Community Fund, told delegates that the proposed new merged lottery distributor will develop programmes which "complement" policies and strategies from other funders, including local and national government.

The Community Fund faces abolition in plans to create a new lottery distributor from a merger with the New Opportunities Fund. Brittan was presenting details of the joint strategy for the new fund from the two existing bodies.

But the Directory of Social Change, the organiser of CharityFair, warned that such co-ordination of policy could threaten the independence of some charities.

Researcher Luke FitzHerbert said that many charities were openly critical of central and local government policies and might find themselves out in the cold. "The work of many charities is deliberately outside such strategies and plans, or parts of them, and such independent action now appears to be at risk," he said.

Ben Hughes, chief executive of community sector umbrella body Bassac, said that the sector was in danger of being "mainstreamed".

"A new lottery distributor should continue to fund work that is independent and may directly oppose mainstream strategies," he said.

But Brittan said the Community Fund was insistent that a "significant strand" of funding by any new distributor should be for "open access programmes" that do not follow government policies.

I Up to 115,000 charities with an income of under £10,000 could lose their charitable status under the Government's reform of charity law, according to John Stoker, chief charity commissioner.

He told delegates at CharityFair that the future of smaller charities was the "biggest one to watch" as the Government moves towards publishing a draft bill on the reform of charity law.

Proposals for the bill, based on last year's Public Benefit, Private Action report from the Government's strategy unit, include recommendations that charities with an income of less than £10,000 would no longer be obliged to register with the commission.

I Charities which don't generate income from legacies are ignoring a highly lucrative revenue stream, Maggie Taylor, principle trainer with fundraising consultant Projects Company, told delegates.

"I've never come across an organisation that couldn't find a way of persuading supporters to remember the organisation in their will," she said. "Legacy income is still a vital source of revenue and is the most cost-effective form of fundraising."

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