Charity Commission proposals to add new questions to the annual return – including the controversial question of how much charities spend on campaigning – have been given a broadly negative reception by sector umbrella groups.
In June, the regulator launched an eight-week consultation on five proposed changes to the annual return, which must be filled in every year by all charities with incomes of more than £10,000 a year. This included the question of whether the proposals could feasibly be adopted for 2015 or should wait until 2016.
The campaign spend proposal was initially put forward by MPs on the Public Administration Select Committee last year. In their consultation responses, the charity leaders group Acevo, the Charity Finance Group, the local infrastructure body Navca and the National Council for Voluntary Organisations all register their firm opposition.
The NCVO response says campaign spending is "not a regulatory matter". The Acevo response says the proposal amounts to "infantilisation of the public debate" and would be impractical for charities to comply with, and Navca says that it carried a political agenda. The CFG’s response says there is "no evidence to suggest that the disclosure of this information enables the commission to act as a more effective regulator", and notes that this proposal was rejected by the committee charged with publishing the new Sorp accounting standards for charities.
Last week, the Directory of Social Change, the training and publishing charity, also came out in opposition to the proposal.
The CFG, Navca and the NCVO flatly oppose the proposal to make charities declare how much income they receive from public service delivery and private donations. Navca’s response says: "As with campaigning expenditure, these proposals are primarily politically motivated, will be unduly burdensome on small charities and will not meaningfully improve transparency."
Meanwhile, Acevo says that although it is not against the idea in principle, it opposes the proposal as it stood, saying it would not give a clear picture of charities’ income.
On whether charities should be asked if they have executive pay policies, Acevo, the CFG and the NCVO say the proposal needs modification if they are to accept it. Navca rejects it, saying it is disproportionate to burden small charities with answering the question, given that the executive pay debate involves only a relatively small number of larger charities.
On the proposal to start asking charities with incomes of between £10,000 and £500,000 to provide additional financial information on the return, all four groups say no, with the CFG and the NCVO suggesting that any changes should apply only to charities with incomes of between £250,000 and £500,000. The NCVO response says: "This proposal is where the struggle between appetite for information and ensuring the bureaucratic burden is kept to a minimum is felt most strongly."
The consultation also asked whether the annual return should ask if charities had undertaken a review of financial controls in the last year. While the NCVO accepted the proposal, Acevo and the CFG do not specifically reject it, and all three mention caveats about how useful it would be. Navca says this should be asked only of larger charities.
When asked whether the new information could feasibly be added to the annual return for 2015, or if the regulator should wait until 2016, all four organisations say they should not be adopted at all. Only Navca gives a direct response. "If they are to be introduced, we do not think that 2015 is feasible as there will be insufficient time to communicate the changes and for charities to adapt their reporting and monitoring practices," it says.
A spokeswoman for the commission said it would analyse all the consultation responses before its autumn board meeting. "We expect to publish both our analysis and the decisions regarding content for the annual return 2015 before the end of October," she said. "We will then focus on the technical development of the online annual return forms and hope that the new annual return will be available early in the New Year."