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Tuesday 26 October 2010
What are the key risks the sector faces?
This is an open question for discussion - What do you think are the key risks to the impact and effectiveness of the charitable sector over the next 5 years?
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1. An increase in the demand for their services as a direct result of the implementation of the Comprehensive spending review.
ReplyDelete2. A reduction in the amount of income available to trusts, etc. to disburse as grants as a result of the impact on interest rates and share values in the wake of the Banking disaster.
3. Pressure from local government on people in receipt of social services to opt for personal budgets. These are invariably more expensive when purchased from private sources thereby limiting the value of the budget and reducing the services received. Private sector services seem unable to provide properly qualified staff to perform the tasks required.
4. Dealing with the reinvigourated stigma attaching to many classes of people needing social services.
One of the deadlilest threats to our future is the entire commissioning involvement. These opportunities are generally to deliver statutory services, something which apposes our constitutional aims and objectives. I have witnessed at first hand the after effects of this, because once you have delivered a commissioned service, charitable funding organisations will not support this activity. In the long term this would appear to mean that we will eventually run out of any form of financial support to help us sustain our work. It is a dangerous and rocky road to tread.
ReplyDeleteI think that some of the major risks to the Charitable Sector as a whole are:
ReplyDelete1. the ever increasing beurocracy and legal knit picking.
2. too much involvement of "big business" with "hard line" approaches to fund raising and the hidden inefficiencies that go with big corporations.
3. "Blanket" CRB checks which can often discourage volunteer involvement in small charities.
4. Too many high paid executives in the larger charities.
The 'Income' and 'Expenses' threshold below which it is not necessary for small Charities to submit accounts has remained at £10,000 for quite a long time - I suggest you raise the figure so that you have fewer accounts to examine. Let us accept £10,000 was an appropriate figure when it was first determined - however it has not been index-linked; the figure must now be inappropriate because of the inflation that has happened over recent years. Why not raise the threshold to cover inflation and further up to some nice round number thus reducing your workload and, ultimately, your costs. Done at the stroke of a pen.
ReplyDeletePosted on behalf of AR Ellender, trustee (registered charity no 523329)
CW's Comments:
ReplyDelete1. The level of administration expenses in many charities is far too high. Serious business practices of cost reduction need to be applied.
2.Too many charities regard Gift Aid as a supplement to cover running costs. The CC must give urgent guidance in this area.
3. With the level of management ability required, running a charity would be an ideal opportunity for management development of "fast track" executives. These could be provided free by big business for say a two year period, which would provide strong links with business, potential top management, and dramatic reductions in management costs.
4. Charities must expect continued pressure in securing funding, and pro active cost reduction is essential. Leadership from the CC with business groups should be an essential target.
CCSarah's comments make a lot of sense. Is a £50,000 more appropriate? I say £50K because only voluntary organisations with incomes between £50,000 and £10 million are likely to be eligible for grants from the £100K Transition Fund.
ReplyDeleteCW Further Comment.
ReplyDeleteWith regard to the comments about the £10,000 threshold, you will find that the limit was raised to £25,000 in April 2009, which meant that although we had grown above £10,000 in the year ending Dec 2009, we were not required to file our accounts. I would agree that even £25,000 is still low and either indexation or a further rise ought to be considered.
Finding enthusiastic and committed Trustees to volunteer their time and energy. CRB checks every three years is too much. If a Trustee subsequently receives a criminal record, the system needs to be able to highlight that and notify the Charity. Loss of public support. Too many Charities doing similar work in the same 'field of operation' and chasing limited public donations. Donor fatigue. Cost of overregulation for smaller charities.
ReplyDeleteDon't think this question is a a great one. Speculation and guess work won't help the immediate decision makers, surely? Even the experts in the worldwide press can't agree on what things might look like in this sector in the next five years. That said, the papers and professional journals highlight that in tough ecconomic times, people continue to dig deep re charitable donations; the Great British public is generous indeed. So, the risks will be - reduced regulation by the Regulator (ie. the Charity Commission) will perhaps encourage (if not enable) more fraud, malconduct etc. by people who set out to exploit the charitable sector. Over five years, the Charity Commission will have to regulate more robustly - taking stronger action and circulating its results more readily. Surely if it uses the media it can get its message out there, that it is still in business and that (even with less money and staff) it can and will take action. It definately should not reduce its regulatory work. If it does, the sector will be worse off. Overall, more charities should merge. Charities should pay to register. Charities should not expect bespoke advice from the Charity Commission - it should be there on-line (as it seems to be now, anyway). These things will have an impact and make the sector more effective. As donating member of the public, I want to see a valid, vibrant Regulator first and foremost (when times are hard) - and (when times improve) a Regulator that can indulge in a more generous one-to-one way with charities. Will that time come though? The government should fund this organisation more than it ever has - not less!
ReplyDeleteKey risks to the impact and effectiveness over the next five years:
ReplyDelete1. Uncertainty of Funding - CEOs in even reasonable sized charities spend a very large proportion of their time completing funding applications rather than focussing on core objectives.
2. Lack of committed funding breeds short-termism. It makes it harder for charities to commit to staffing, equipment and premises leases etc to deliver services - I have seen less willingness from funders to commit to three years say, but a year at a time does not allow effective delivery. This comes at a time when more essential services are being outsourced to the third sector.
3. Complexity of the taxation system - VAT, especially with the impending rise to 20% is increasingly an issue for charities. The rules are so complex it is easy for charities completely miss the point of registration or reliefs available to them and if they do register most are caught by partial exemption adding administrative cost. Charities also often misunderstand the employed versus self-employed rules, gift aid reclaims have dropped with the end of transitional relief and the trading thresholds for corporation tax have not been uplifted for many years. In short the tax system for charities needs simplification, it is either an increasing drain on management time or overlooked.
4. Lack of co-ordinated PR for the good works the sector does. Most people's experience is limited to meeting chuggers in the highstreet, emotional appeals on TV, big events like Children in Need etc. and any scandal significant enough to hit the media. The UK public are v generous but I would like to see more emphasis on the invaluable work that a wider range of charities undertake, not just the very large few.
Key risks include an increased demand for voluntary services matched to fewer resources and vulnerability to poor practice (including damaging publicity) due to decrease in quality regulation.
ReplyDelete