Stronger Charities for a stronger society

This month, the House of Lords Select Committee on Charities published its report ‘Stronger Charities for a Stronger Society’ after a wide-ranging inquiry into the voluntary sector.

It makes 100 conclusions and recommendations around issues of charity governance, funding and sustainability and the role of local and national government in supporting the sector.

The report is a massive 156 pages long, so here are some of the key points that we think are of interest.

Charities & the way they are managed:

The report recognises the importance that charities play in society and how their role and funding has changed over time.

It says “charities play a fundamental role in our civil lives. They are often in the front line of support for the most vulnerable and are therefore in the best place to assess their needs”.

However, the report suggests that charities need to improve governance and that boards lack key skills. It recognises the need for charities to have strong governance, with robust structures, processes and good behaviours, in order to deliver effectively for their beneficiaries. To improve governance, the report recommends that charity boards should undertake greater self-reflection, examining their behaviours, processes and skills.

While the report does not recommend an increase in regulation, it does suggest that charity trustees need to be more transparent, including a recommendation that all charities have an independent evaluation of their work.

Funding and Sustainability:

The report highlights the financial challenges that charities have faced over recent years and that the social and technological environment in which charities work is dramatically changing. It recognises the economic uncertainty that the United Kingdom’s exit from the European Union brings and that the public funding landscape has altered to the detriment of some charities.

It has concluded that the move from public sector grants to contracts, which often involve complex commissioning processes, disadvantages smaller charities.  It calls for the government to provide support for voluntary sector bidding consortia and for commissioning bodies to consider impact and social value, rather than cost.

Having concluded that commissioning bodies do not always recognise the social value and innovation that charities can bring to service delivery, the report suggests that a return to grant funding could be a solution.

The Role of Government and the Charity Commission:

The role of national and local government is considered throughout the report, but specifically it calls for improvements in the way the government consults with the charity sector when developing new policies. In particular, it cites the concern that was caused by the proposed “anti-advocacy” clause in grant awards and the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014, both of which the report says threatened the vital advocacy role of charities.

Peers express deep concern about the Charity Commission’s proposal to charge charities for regulation and calls for the Commission to think very carefully about the implications of charging. It asks the Commission to be clear about how charging will benefit charities and strengthen the sector overall. It says any charging model must ensure that the burden does not fall upon small charities that are unable to afford it.

The full report can be seen here

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