Richard Smith: Save our charities from the government

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

Share

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

Clinical Negligence Solicitor

Highly Competitive Salary: Austen Lloyd: HAMPSHIRE MARKET TOWN - A highly attr...

Network Engineer (CCNP, CCNA, Linux, OSPF, BGP, Multicast, WAN)

£35000 per annum: Harrington Starr: Network Engineer (CCNP, CCNA, Linux, OSPF,...

Commercial Property Solicitor - Bristol

Highly Attractive Package: Austen Lloyd: A VERY HIGH QUALITY FIRM A high qual...

DevOps Engineer (Systems Administration, Linux, Shell, Bash)

£50000 per annum: Harrington Starr: DevOps Engineer (Systems Administration, L...

Day In a Page

Read Next
 

The power of anonymity lies in the freedom it grants

Boyd Tonkin
Rebel fighters walk in front of damaged buildings in Karam al-Jabal neighbourhood of Aleppo on August 26, 2014.  

The Isis threat must be confronted with clarity and determination

Ed Miliband
Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone