Peter Stanford: Taking government cash is no simple win-win

For those organisations with charitable status, there is nervousness about criticising what is going on

Peter Stanford
Peter Stanford

Whether or not their charity should take government money is one of those decisions that trustees must weigh carefully.

Don’t just nod it through, because it is not a simple win-win. In the days of the Blair and Brown governments, when the chat was all about a partnership or "compact" between government and the third sector, it was part of the five-year plan of every self-respecting charity to access Whitehall funding. But the times they are a-changin’.

We have, of late, witnessed far too many fundamentally good and necessary organisations learning to their cost that what government gives it can also take away, and often at short notice. In comes a new minister – and they seem to come and go ever faster – proclaiming a "new approach", and overnight everything that has gone before is cleared off the funding table.

No matter that, in the jettisoned organisations, the turning on of the Whitehall tap has been accompanied by vast expansion that is not sustainable when the tap is turned off. For many it simply means collapse and closure.

Trustees have to be aware of those risks and think about them very carefully before being swept up by the new ministerial broom keen to add them to his or her retinue. And there is another challenge for them to consider when it comes to official funding. The Shaw Trust was recently named as one of 22 charities subject to gagging clauses in the contracts they signed with the Department for Work and Pensions to provide back-to-work schemes.

The exact impact of the clause in question has been disputed, but the suggestion is it means that the trust cannot publicly and freely criticise the DWP or the Secretary of State, Esther McVey, and so is hampered in saying what it believes about the controversial rollout of universal credit.

This claim of a thin skin in Whitehall rings bells. I was a trustee of a charity that was in receipt of money from the Ministry of Justice to run its programmes. Part of the deal was that if anyone from the charity wanted to speak about its work to the media, they should first of all alert the MoJ press office. Since the work in question was sensitive and covered ex-offenders, you might think such a request was fair enough.

But what it meant in practice was that every invitation to discuss a related issue in the news had to be declined.

Most news outlets are interested only in those stories that are trending that day, so they tend to approach experts for comment at short notice. Government press offices, for whatever reason, work at a snail’s pace.

So if you alert them, it takes three or four days for them to come back to you, by which stage the news agenda has moved on and your opportunity to shine a spotlight on official policy has been missed. And you don’t complain too loudly for fear of losing your funding.

Clever ploy or bureaucratic bungle? I’ve never quite fathomed it, but it leads to a bigger legal question. As charity law stands at present, out-and-out campaigning organisations cannot have charitable status, and the various tax breaks that go with it, because they are perceived to be too "political" and therefore not sufficiently "charitable".

And for those organisations with charitable status, often working on the front line, there is always a nervousness about criticising what is going on for fear that it might not only affect the government funding they receive, but also their charitable status.

The distinction between campaigning and charitable has never been that clear, in my experience. I sometimes wonder if the opaqueness is deliberate – just one more restriction on the sort of open, honest fact-based debate we all need so badly now.

Peter Stanford is a writer and broadcaster, and was a charity chair for more than 20 years

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