CHTYCOMM 4: the battle is on to decide who should fund the Charity Commission

Charging charities fees for regulation is not just impractical and unlikely to achieve the result intended, but, more importantly, it’s a further raid by government on the generosity of donors – who don’t get a chance to object.  So why is such a profoundly flawed idea being entertained…

For the last few years it’s felt like the sector is almost at war with the Charity Commission over their plans to introduce fees for regulation. Their weapon of mass distraction has been the Chair, William Shawcross, typically during interviews with the press, highlighting their intention to do it very soon.  But thus far their weapon has lacked the warhead and the bomb has not gone off.

The latest shot across the bows is announcement at the Charity Commission’s annual public meeting that a consultation would be out by the end of January, which ended yesterday. So it looks as if it’s battle stations as we go to CHTYCOMM 4.

Why us – why now?

It’s not the Commission’s fault. Like most budgets provided by central government these days, theirs has been the victim of repeated slashing. £40m hacked away down to £21m to give you an idea of the severity. So charging charities fees isn’t so much a grand strategy,   rather it’s an act of desperation.

Why is it a bad idea?

I’ll spare you a recap of the multitude of arguments against it which have already been made by DSC in this paper and also by Charity Finance Group. Let’s focus on the logic of the proposal. It seems that charging charities fees for regulation is not in the Commission’s interest, never mind charities:

  • It’s a waste of money: It will be expensive to implement a scheme of calculating and collecting fees. It is far simpler, quicker and more cost effective to fund the Charity Commission from an imbursement from the Treasury.
  • Donor’s money being hijacked to underwrite government cuts: The cost of fees will have to, necessarily, come from the generous donations of charity supporters, many of whom are tax payers already funding the commission.
  • It’s not going to work: What happens when the Commission reports to the Treasury that it raised £5m from charities? Their budget will be cut again of course! So fees are in the Treasury’s best interest for sure. The only way for that to play out is for more fees to be charged in the future, donors paying even more to cover government cuts -a massive con:

What’s making them think it’s a good idea?

The Commission’s arguments so far have featured number of angles:

  • ‘The bloke in the bar’ approach: at the Commission’s annual public meeting in January William Shawcross told a baffled looking audience that on his way into the room two charity sector ‘leaders’ told him charging charities is a good idea. How is this representative of hundreds of thousands of registered charities? It isn’t. He didn’t ask our charity leader, Debra Allcock Tyler and she thinks it’s a terrible idea.
  • ‘The public’ knows best: In 2015 the Commission’s annual study into public trust and confidence found that a whopping great 69% of ‘the public’ think charities should pay for regulation. The same survey showed that only 47% of the population have ever actually heard of the Commission. Hmm…
  • Other regulators do it: Sure they do! And they tend to charge fees to people and organisations that work to make a profit. Charities exist for the public benefit, they serve the community, not the private interests of individuals. Many charities are funded by the generosity of donors who are giving to a cause, not to subsidise the Treasury’s coffers.

What’s the solution?

Simple.  The government is not doing charities a favour by footing the bill of the regulator. Charities save the taxpayer billions of pounds every year and make up for so many of the State’s failings, making it appear better than it actually is. There’s not a single person in the country who has not, is not, or will benefit from the work of a charity and it’s not asking for a lot for the Treasury to continue funding the regulator- it’s a sound investment.

At the annual public meeting Angelica Finnegan from Charity Finance Group asked if the Commission will be consulting on greater Treasury funding as an alternative to introducing fees. The answer was essentially “austerity! There’s no point”.  So if the Commission was making the case for Treasury funding, it seems to have given up.

But why is the Minister for Civil Society, Rob Wilson, not standing up for the Commission? If he is he’s keeping very quiet about it. Why is he seemingly allowing his area of responsibility to be so rightly done-over without challenging it?

We must loudly make the case to Mr. Wilson, the government, the Treasury, the public, anybody who will listen (or won’t), that State funding of the Charity Commission is hugely advantageous. You can start by signing and sending this letter. But you can tweet, email, shout, sing, draw, picket, protest, do whatever it takes to make the point loud and abundantly clear.

For the love of people and animals in need, for the sake of the lonely, the broken, the vulnerable, the poor and for the values of charitable giving – do not let the Treasury force the Charity Commission down this route.