Dame Suzi Leather, the outgoing chair of the Charity Commission, has used her final speech in the role to voice her concerns at a "blurring of the boundaries" between charities and other social organisations.
Leather, who will leave the role at the end of July, told the Almshouse Association’s annual general meeting in London that "a plethora of new organisations" such as social enterprises, mutuals and cooperatives now existed to offer social benefit but had only "rather hazy" definitions.
She said that charities had at the same time become much more involved in service delivery and that these two developments made the charity form much less distinct, adding that "charity as a concept is not well understood" by the general public.
"What really concerns me is a less tangible, less visible and longer-term challenge to charities’ future," she said. "Namely, whether charities will continue to be able to demonstrate that they are fundamentally different from other types of organisations.
"Will charity continue to mean something special and sufficiently unique to earn the trust the public places in charities and the privileges they enjoy?"
Leather said that public benefit rules were a major reason why a difference existed between charities and other forms.
"There’s been a lot of nonsense said and written about the commission’s work on public benefit since the Charities Act 2006 was passed," she said. "You may have seen some of the more lurid headlines and newspaper articles yourself.
"Much of the reporting was distorted and, in my view, often involved wilful misrepresentation of the commission’s work."
Leather said another worry was that the commission itself would not be able to absorb any further cuts to its funding if it was to continue with its job as a regulator.
"Something would have to give," she said. "We, like you, must be realistic."
Leather also warned that financial difficulties could "bring pain for many charities and for many beneficiaries" over the next few years.
She said a recent review conducted jointly by the commission and the Institute of Chartered Accountants in England and Wales found that "future income is a major preoccupation and concern" for the sector.
"But I’ve also learned not to underestimate charities’ ingenuity for making a little go a long way," she said. "And for finding new, innovative ways of sourcing income."