Political instability means ‘charities must focus on the short term’

Andrew O’Brien of the Charity Finance Group tells an NPC round-table event that the sector should think in two or three-year periods

The charity sector is failing to connect with MPs and needs to adjust to a more unstable political environment with a greater focus on the short term and on Brexit, charity leaders have said.

At a round-table event hosted by the think tank New Philanthropy Capital today, attendees discussed how charities could make their case in a more polarised political landscape after last year’s EU referendum and this year’s recent general election.

Andrew O’Brien, head of policy and engagement at the Charity Finance Group, said that, given the current political instability in the country, charities should be more concerned with short-term fixes that get left behind because “we think we should be focusing on the long term”.

He said: “At the moment I don’t see any party thinking it will win a big majority. There’s not really much political stability for long-term thinking.

“We have to adjust our own time horizons and think in two to three-year periods, because MPs are probably living hand-to-mouth at the moment in terms of their political capital.”

Dan Corry, chief executive of NPC, said the charity sector needed to be “more pointed, a bit more specific” when arguing its case.

“This is a congested world at the minute, where people are very confused,” he said. “Maybe our asks are almost not radical enough at the moment, which is why we are not listened to.”

Among Corry’s proposals were a civil society representative in the Cabinet, a minimum spending commitment from government similar to the 0.7 per cent guarantee for international development, and a “civil society test” where government ideas would be put through a “civil society filter” to see if it was something the voluntary sector could carry out instead.

“I suspect that, if you’d done that, you wouldn’t have had the National Citizen Service created the way it is,” Corry said. “If the government had said it wanted all children to be doing this, and the first question was ‘can we use existing civil society to do it’, the answer would have been ‘yes’. It would probably have been more cost-effective.”

Corry said he would like to see a new civil society improvement agency introduced to free the Charity Commission to “do the day job” and focus on its regulatory role, allowing other bodies to promote the sector and to advocate on its behalf.

Stephen Hale, chief executive of Refugee Action, said he did not think that charity sector bodies, such as the National Council for Voluntary Organisations or the charity chief executives body Acevo, were doing enough work with MPs to explain the charity sector to them.

“Who is running a programme to twin new MPs with community organisations or national charities?” Hale asked. “We haven’t developed the argument, we haven’t proselytised it and we’re not working it.

“I don’t see who is doing this work. I don’t know who’s testing what phrases will work with MPs. I am sure there are loads of programmes our there now twinning new MPs with science and industry. Who is explaining the voluntary sector to them?

Hale said the sector did not have an argument that worked for the current government, “which is why they don’t pay us any attention”.

Brexit and links with government dominated the discussion, with views expressed that Brexit both dominated the political agenda at central government level and also provided opportunities to engage with MPs who were not at the heart of the debate over the UK’s future relationship with Europe.

There was also debate on whether the sector would do better by engaging with metropolitan mayors or devolved assemblies, or whether central government’s control over budgets and the economy made it more important to engage with MPs.

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Regulator must understand charities’ concerns about its levy, says Acevo chief

Vicky Browning says the Fundraising Regulator must not treat all charities in the same way when it comes to persuading them to pay for its upkeep

The Fundraising Regulator must avoid treating all charities in the same way if it hopes to persuade more of them to pay its levy, according to Vicky Browning, chief executive of the charity leaders body Acevo.

In a statement made after the Fundraising Regulator published a list showing the names of the 162 charities that have not paid the levy to contribute towards its costs, Browning warned that the regulator needed to do more to tailor its arguments to different types of charities.

She said the list published by the regulator showed that certain kinds of charities were more likely than others not to pay, primarily religious or medical charities and those in the arts.

“This demonstrates a need for the Fundraising Regulator to engage with representatives from these types of charities and understand what their concerns are,” Browning said.

“The sector is not homogeneous: the same argument isn’t going to work with everyone. Charities that have concerns about paying need to see and hear that their perspective is understood and being taken into account.”

Browning said it was up to each charity to make up its mind on whether or not to pay the levy, but Acevo’s view was that it was better to have the voluntary self-regulation offered by the Fundraising Regulator than to have government legislation imposed on the sector.

The regulator’s list included 1,570 charities, the majority of which had paid the levy, but showing the names of 162 that had not. The regulator said another 95 charities not included on the list were currently negotiating with it about making the payment.

Of the 162 that have not paid, 13 have agreed to pay the levy next year, but not this year.

At least 85 of the 162 have charitable objects relating to medicine, religion or the arts, including museums.

Browning said: “Charities not paying the levy on the principle that donors’ money was not intended for the Fundraising Regulator must measure the risk against the principle and consider whether the principle should itself be subsidised by the majority of the rest of the sector that is paying the levy.”

A spokeswoman for the regulator said it engaged with all charities that got in touch to express concerns about the levy, but if charities did not reply to emails and letters it was “near impossible” to discover exactly what their concerns were.

“Where charities have refused to pay, we will continue to engage with them individually, and it is helpful that some have said they will start to pay the levy in year two,” she said.

The regulator was always happy to discuss any issues, she added.

“Many arts, faith and medical research charities have paid the levy, and we are pleased that they support independent regulation,” she said.

“We are working with the Arts Council, the Institute of Fundraising, the National Council for Voluntary Organisations and others to reach out to those organisations, and will continue to do so.

“As Acevo points out, the sector is not homogeneous, so it can be difficult to do this where charities are not part of wider networks.”

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Charities in north-west England contribute £2.5bn a year to the region, report finds

But study says that those in the poorest areas are the most likely to be financially vulnerable

Charities in north-west England contribute £2.5bn a year to the region’s economy, a new study has found.

Third Sector Trends in the North West 2016, which was published last week, says voluntary sector organisations in the region have an estimated 110,000 full-time equivalent employees spread across more than 10,000 organisations.

But although the report says that most organisations are in good financial health, it adds that those in the poorest areas are twice as likely to be in financially vulnerable positions than those in the more affluent areas.

The report, which was written by Professor Tony Chapman of St Chad’s College, Durham University, is part of a three-year programme of work led by the think tank IPPR North on the state of civil society and the voluntary sector in the north of England.

Chapman’s report is based on an online survey completed last year by more than 1,400 third-sector organisations in north-west England.

Researchers found that 30 per cent of charities in the poorest areas believed they were financially vulnerable, compared with 14 per cent in the richest areas.

Organisations working with people from minority ethnic groups were the most likely to feel they were in weak financial positions, the report says, followed by those tackling concerns about gender and sexuality.

The report says the voluntary sector in the region “is very much a local sector”, with 30 per cent of organisations working solely at neighbourhood or village level and 62 per cent within the boundaries of one local authority. Only 9 per cent operate at a national or international level, it says.

It says the voluntary sector in the region is dominated by small and medium-sized third-sector organisations, representing 6,306 and 4,425 charities respectively.

There are only about 835 charities with annual incomes of more than £500,000, says the report.

Using data from across the north of England generally, the report says the figures indicates that the proportion of part-time staff in the sector has risen from 35 per cent to 45 per cent over the past eight years.

Charities in the north west of England draw upon an estimated 440,400 volunteers who contribute more than 31.7 million hours of work a year, worth at least £228m, the report says.

Jack Hunter, research fellow at IPPR North, said the data showed charities in the region were “an economic powerhouse in their own right”.

But he said the link between deprivation and a charity’s overall financial health was worrying. “Those that are arguably doing some of the most important work with the most excluded north-west communities appear to be suffering the most as a result of the government’s austerity policies,” he said.

“More attention must be paid to poorer parts of our region, where charities and other third-sector organisations are most likely to be in vulnerable financial situations.”

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More than 100 charities call on minister to reform the lobbying act

A joint letter, addressed to the charities minister Tracey Crouch, calls for revisions to make the legislation less ‘confusing and burdensome’

A letter signed by 122 charity sector bodies, including the National Council for Voluntary Organisations and the Charity Finance Group, has called for reforms to the lobbying act amid concerns that the legislation limits charities’ participation in the democratic process.

The letter, which was organised by the international development network Bond and is addressed to Tracey Crouch, the Minister for Sport and Civil Society, calls for the implementation of the Conservative peer Lord Hodgson’s proposed revisions to the lobbying act to make the legislation less “confusing and burdensome”.

The lobbying act sets spending limits and makes it a legal necessity for all organisations that spend more that £20,000 in England or £10,000 in Wales on regulated campaigning in the year prior to an election to register with the Electoral Commission.

Hodgson’s review of the lobbying act, which was commissioned by the government and published its recommendations last year, called for a number of reforms, including reducing the regulated campaign period to four months before an election and changes to the rules on joint campaigning.

But the government has yet to implement Hodgson’s recommendations. The letter says that Crouch should work with the Cabinet Office to ensure parliamentary time is set aside to discuss Hodgson’s proposals, and that the act needs to be made less “vague and confusing”.

The letter says: “Charities and non-partisan campaign groups have spent significant time attempting to understand the legislation and how to comply. However, many of the rules are vague and confusing, especially for smaller organisations.

“While some organisations have sought legal advice to help them interpret the legislation, this can be expensive and is simply not an option for many. The rules on joint campaigning are also a concern for smaller charities and have made organisations more hesitant to collaborate.”

The letter says that the law might be excluding some charities from public debate.

“While we recognise that regulation is necessary to ensure that no one individual or organisation can exert undue influence at an election, the lobbying act has had a disproportionate impact on civil society campaigning,” the letter says.

“We are concerned that it caused many organisations not to engage in the run-up to the recent general election, and resulted in some important voices being lost from public debate.”

The chief executives of the charity chief executives body Acevo and the infrastructure body Navca have signed the letter, as well as major charities and campaigning organisations including Action for Children, the Charities Aid Foundation, WWF, Save the Children, Leonard Cheshire Disability, Greenpeace and the RSPB. 

Today’s letter comes after a similar missive in June organised by Friends of the Earth and and signed by more than 50 charities, which called for the lobbying act to be repealed.

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No serious regulatory issues at Plymouth Brethren charities, commission concludes

But the Charity Commission says it has provided advice in areas such as collections from congregations

The Charity Commission has not identified any serious regulatory issues relating to charities set up as part of the Plymouth Brethren Christian Church, a new report from the regulator says.

In a case report based on monitoring work of a sample of 24 of the more than 100 gospel hall trusts registered as charities in recent years, the commission says it has seen enough evidence to suggest there is sufficient engagement with the wider community to demonstrate public benefit.

The Charity Commission had been in a dispute with the Plymouth Brethren since February 2009, when the Preston Down Trust, a Devon-based Plymouth Brethren congregation, applied for charitable status.

The commission rejected the initial application from the trust in June 2012 because the regulator was not satisfied that the trust had been established for the advancement of religion for public benefit. The regulator cited at the time the Plymouth Brethren’s doctrine of separation from the rest of society as one reason it did not accept the application. 

The charity appealed to the charity tribunal in July 2012, but the case was later dropped and the brethren’s charitable status was accepted by the commission in 2014.

At the time, the Preston Down Trust agreed to amend its trust documents by entering into a deed of variation, which sets out the church’s core religious doctrines and practices in a way that is binding on trustees. The commission agreed that after 12 months it would review the charity’s compliance with the deed of variation.

In its latest report, the commission says its monitoring work included speaking to people concerned at the treatment of former members of the brethren, and says it accepts that trustees of the gospel hall trusts are not responsible for the behaviour of individual members.

But the commission’s report says it expects trustees at the charities to ensure their deeds of variation are readily available to members and to have regular discussions with members about the deeds’ provisions.

The commission also provided regulatory advice about the trusts’ collections from its congregation to ensure the charities have sufficient control over their charitable income.

Michelle Russell, director of investigations, monitoring and enforcement at the Charity Commission, said: “In this case, our review is able to provide public reassurance that the trustees of gospel hall trusts are taking steps to embed the principles of the deed of variation in the running of their charities. We have provided regulatory guidance to some individual trusts and expect them to follow that advice consistently.”

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Charities in £340k legacy dispute

Four charities, including the Dogs Trust, are involved in a dispute over a will by Tracey Leaning, who died from cancer in 2015

– This story was corrected on 22 August 2017; please see final paragraph

Four charities, including the Dogs Trust, are involved in a dispute over a £340,000 will after the charities were cut out of the final estate, according to media reports.

The Daily Telegraph newspaper has reported today that Dogs Trust, World Animal Protection, Friends of the Animals and Heart Research UK are involved in a dispute over a will by Tracey Leaning, who died from cancer in 2015.

The newspaper says that Leaning had written a will in 2007 that left her property and money to the charities, worth an estimated £340,000.

But following her diagnosis in 2014, Leaning wrote another will, which was handwritten and witnessed by a neighbour, that left her house, belongings and savings to her partner, Richard Guest, the newspaper says.

The newspaper reports that Guest met Leaning between the completion of the first and second wills, and has offered the charities £60,000 and the house in trust to settle the case.

The Dogs Trust was unable to provide a comment before Third Sector’s deadline.

– The story originally said the charities were challenging the will at the High Court but no proceedings have been issued

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‘Unprofessional’ charities have ignored levy payment requests, says Lord Grade

The chair of the Fundraising Regulator says 138 charities have not responded to requests for payment of the fundraising levy

Lord Michael Grade, chair of the Fundraising Regulator, has reiterated calls for large fundraising charities to pay the fundraising levy and said it was “unacceptable and unprofessional” that 138 had ignored letters requesting payment.

In a blog on the Fundraising Regulator’s website about his first meeting with Amanda Bringans, chair of the Institute of Fundraising, Grade said more than 1,400 charities had paid or promised to pay the levy to fund the regulator.

“Those charities that haven’t paid are effectively being subsidised by those who have, which is hardly a fair situation,” said Grade.

“All of these charities have the ability to pay the levy. It is unacceptable and unprofessional that 138 charities have still not even responded to our several communications about the levy. If a charity feels that it should not pay the levy, we need to know why.”

Almost 1,800 charities that spend more than £100,000 a year on fundraising are eligible to pay the levy.

The regulator is due to announce by the end of the month the names of all the charities that fall within the scope of the levy and whether or not they have paid.

Bringans wrote in a blog post about their meeting last month that Grade had agreed to speak more positively about fundraisers after he was criticised by sector umbrella bodies for saying too many charities were “proving to be laggards” in terms of reforming their fundraising practices.

In his post published yesterday, Grade said that some of his words about the sector “have been emphasised by the media”, which had focused on his “criticism of the few”.

He said: “Yes, we have been firm and will continue to be firm in calling out bad practice.

“However, we have also consistently acknowledged the outstanding work undertaken by charities and fundraisers. Sadly, we don’t have the power to write our own headlines but, whenever the opportunity arises, we will speak positively about the charitable sector and its excellent work.”

Grade said in his blog that most larger and many smaller charities were redefining their relationships with donors so the changes so the changes in regulation were an opportunity rather than a threat.

“There are many in business who could learn from this,” he said.

“This reflects how fundraisers have been committed to operating to an increasingly high standard.

“It is clear that the public is appreciative when fundraisers interact in a sensitive, considerate manner, understanding the precious trust the public holds in charities and how vital that trust is to ensuring that charities continue to be supported.”

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Charities to challenge £340k legacy in High Court

Four charities are contesting a will by Tracey Leaning, who died from cancer in 2015

Four charities, including the Dogs Trust, are challenging a £340,000 will at the High Court after the charities were cut out of the final estate, according to media reports.

The Daily Telegraph newspaper has reported today that Dogs Trust, World Animal Protection, Friends of the Animals and Heart Research UK are challenging a will by Tracey Leaning, who died of cancer in 2015.

The newspaper says that Leaning had written a will in 2007 that left her property and money to the charities, worth an estimated £340,000.

But following her diagnosis in 2014, Leaning wrote another will, which was handwritten and witnessed by a neighbour, that left her house, belongings and savings to her partner, Richard Guest, the newspaper says.

The newspaper reports that Guest met Leaning between the completion of the first and second wills, and has offered the charities £60,000 and the house in trust to settle the case.

The Dogs Trust was unable to provide a comment before Third Sector’s deadline.

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Amount paid in audit fees by top 5,000 charities rises by more than £2m

A new report from the data firm Charity Financials also shows Crowe Clark Whitehill earned the most in fees in the past year

The overall amount paid out in audit fees by the top 5,000 charities has increased by 4.4 per cent, according to a new report.

The data provider Charity Financials’ Charity Audit Spotlight for 2017, which is based on scrutiny of the latest accounts for the 5,000 largest UK charities, shows that audit fees cost them a total of £69.4m.

In comparison, last year’s Charity Audit Spotlight showed that the UK’s largest charities paid more than £67m in audit fees, which was itself a 2.5 per cent increase on the previous year. 

The report found that the audit firm Crowe Clark Whitehill has the largest market share, earning £5.7m in fees and accounting for 8.2 per cent of the market.

PricewaterhouseCoopers earned more than £4.6m in fees from charities and BDO earned almost £4.5m, the report says.

But rival audit firm haysmacintyre had the most charity clients in the top 5,000 with 263, followed by CCW with 240 and RSM with 236.

Haysmacintyre also gained the most new clients for the second year running, the report shows, with 30 charities appointing the firm and paying fees worth a combined £449,000.

The report says that while 328 charities changed auditor in their latest set of accounts, 27 per cent of the top 5,000 charities have not changed their auditor in the past decade.

The largest charity to change auditor was the Wellcome Trust – which is the UK’s richest charity – which paid Deloitte £300,000 to audit its latest set of accounts, the report says.

PwC audits the largest amount of charity income, the report shows, with £5.65bn scrutinised by the firm this year.

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