Donors need a strong charity regulator

 

Last week Baroness Stowell launched the Charity Commission’s new five year strategy, which places increasing trust and confidence at its heart. In an interview on the Today programme[1] Just Webb asked her whether she has to have charities on her side and ‘get on with them’. Her answer was clear, “It is my job to represent the public interest on charities, not to represent the interests of charities to the public. I’m not sure if I do have to get on with them.”

Donors will be reassured by her message. The actions of a few charities in recent years have tainted how the sector is perceived. We see this in lower than average trust figures (trust in charities fell to only 54% in the wake of the Oxfam scandal earlier this year) and an increasingly tough fundraising market. The fundamental belief that I trust you to do good with the money I give you has been shaken (certainly for any charity that isn’t your favourite charity). That is why a tough message from the Regulator can be reassuring. It reassures donors (perhaps falsely) that someone is keeping an eye on how their donations are spent. It counters the image that everything at the top of charities is too cosy and there is a revolving door between charities and government.

A tough-talking Charities Regulator has been particularly well received in Ireland. Ireland has had a number of very high profile charity scandals in recent years, much to the dismay of the public. As one donor told me in a focus group in Dublin last week, “tell them to get their act together”. John Farrelly, the Regulator, has done what the Financial Regulator failed to do at the time of the financial crisis; be seen to be independent. The Financial Regulator was seen to be far too close to the banks it was meant to be overseeing, and as a result they attracted much criticism after the crash.

Of course, the reality is that the overwhelming majority of registered UK charities are law-abiding, many go above and beyond the required standards and do fantastic work. Very few will ever come onto the Regulator’s radar, for any reason, let alone a negative one. Many charities would like to hear the Regulator saying this in public. Fewer messages like ‘charities are not living up to how the public expects them to behave’ and more ‘this country would fall apart without charities’. I certainly sympathise with this view. But for now, there is no harm in tough words. Donors need to hear them.

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