Richard Smith: Save our charities from the government

The founders of some of our best-known charities would not recognise them today


Ten years ago, I set up a charity in Hereford that provides lifelong respite and care for profoundly disabled young people. I knew, from my own experience as the father of a daughter with these difficulties, that it would be a huge challenge. I knew I would meet parents and children who were on the point of despair, that I would hear many stories of extraordinary courage, and that the charity I was setting up would never be able to help all those who deserved a better chance in life.

Every week we are called by parents desperate for help. But with only 14 beds, we have limited capacity and have to turn too many young people away. But if I were starting out again today, the task would be substantially harder. Not because the needs of disabled young children have changed, but because the world of charities and the way in which the state regulates them, has changed. For the worse.

And the Charities Bill, shortly to become law, will make things still worse. The Charity Commission already imposes a one-size-fits-all regulatory framework. This can be a great burden for the 140,000 small charities that have an income of less than £100,000 a year. It cannot be right that a charity with an annual income of £50,000 has almost the same amount of regulation as one raising £1m a year.

The Charity Commission's Statement of Recommended Practice has doubled in size over the past 10 years, from 240 to 451 paragraphs. All the indications are that it will increase further; and this additional regulation can only act as a strong disincentive to people wishing to establish new charities.

There are also concerns that the public is losing confidence in our biggest charities. Now that the state is the largest paymaster of the sector - and is calling the tune to which too many of our largest charities are dancing - the founders of some of our best-known charities would not recognise them today.

Many large charities are, partly, in response to the demands of the state, developing an increasingly corporate style. When we make a donation, how many of us are aware and happy that the average top salary at a large charity is now £83,000? Take this example: the charity Scope recently appointed a firm of headhunters to find a new executive director of external affairs at a salary of £90,000 - equal to its subsidy of a horse-riding school for the disabled in Hertfordshire, which it has decided to withdraw.

The corporate style of many large charities and their reliance on government funding goes hand in hand. And as the charities become more and more dependent on the state, their independence and the voluntary nature of their work is obscured.

In the last four years for which data is available, large charities increased their fundraising and publicity expenditure by £474m a year. Yet their income from the general public over the same period increased by only £248m. In other words, it is costing large charities nearly £2 to raise an extra £1. Is this how we want charities to spend our money? Surely we want our money to be spent on the beneficiaries, not highly-paid executives and marketing campaigns.

It is getting worse. Some large charities are now facing significant pension deficits. NCH, the National Trust, the Children's Society and Barnardo's all had pension shortfalls of more than 25 per cent of their income. Some charities may have to reduce the money spent on beneficiaries to refinance their pension schemes. This will only increase public concerns over whether its generosity will benefit the charities' beneficiaries or go into employee benefits and marketing campaigns.

And it appears that, despite the public's concerns over large charities, the Charity Commission is far more active in investigating smaller rather than larger charities - larger charities take 45 per cent of all charitable revenues but attract only 1 per cent of inquiries by the commission.

The voluntary nature of much charitable work means that the impact of regulations, and of inquiries by the regulator, are likely to be severe, particularly for smaller charities. Are there really many volunteers out there who prefer to spend their time complying with endless regulations as opposed to helping the less fortunate?

The public must recapture its influence over how charities behave. Charities should accept that public scrutiny could have a positive effect on the public's willingness to give in the future. But first, we need transparency over how charities spend their money. Strict accounting rules should be set for large charities so that we can see how much each individual charity spends on itself, and how much it spends on its beneficiaries.

In addition, the direct financial link between the state and a charity should be broken, wherever possible: the intended beneficiaries - the disabled, the needy, the sick - should be given the chance to control which charity they use for a particular government-funded service.

The creative spirit that so enriches our civic society and the altruistic ambitions of our wealthiest citizens must be admired and treasured. There will always be a need for charity. So unless we want to hand over all responsibility to the state, we must defend our charities from the heavy-handed embrace of Government.

Richard Smith is co-author with Philip Whittington of 'Charity: the spectre of overregulation and state dependency', published today by the Centre for Policy Studies

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Guru Careers: Software Developer

£35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

SThree: Trainee Recruitment Consultant / Resourcer

£18000 - £23000 per annum + Commission: SThree: As a Trainee Recruitment Consu...

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Day In a Page

Read Next

Labour leadership contest: 'Moderniser' is just a vague and overused label

Steve Richards
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’  

Children's TV shows like Grange Hill used to connect us to the real world

Grace Dent
Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine