Sunday, November 25, 2007

Charities: time for an inspector to call?

Last Wednesday’s Guardian carried a challenging article by Martin Brookes of New Philanthropy Capital. (A full version of the lecture is available too.) The article addressed what he sees as charities’ lack of accountability for the funds they receive:

This lack of scrutiny is not healthy, and is not fair to the taxpayer or donor either. A total of £1.3bn of subsidy on tax-efficient giving was provided to charities in the last financial year. This is money that could go into schools and hospitals. No one sits in judgment over the value for money provided by this. And private donors - that is you and I - give almost £9bn, the impact of which is not adequately recorded or monitored.

He could have added that increasingly third sector organisations are delivering public services rather than supplementing or critiquing them.

Martin Brookes believes that scrutiny would improve performance with better informed donors picking better charities and weak charities lose funding.

Its hard to argue with any of that. However, he recommends a new institution alongside the Charity Commission. This quango would be concerned with assessing and improving the performance of charities. It would be under the wing of the Cabinet Office and report to a House of Commons select committee.

I do like the idea of reports assessing how well charities are managed and governed, how they involve beneficiaries in shaping services, how they address issues of equality and diversity, etc. But I have some concerns.

Given the scale of red tape that small charities are wrapped in, like any other small business, I am wary of anything that adds to the regularity burden in the wider sense. Moreover, across the public sector there is so often a tick-box mentality where things are only done superficially and ritualistically in the expectation that an inspector will call.

Perhaps it would be better if the charities themselves stepped forward and took up the challenge of measuring and improving their own performance. Self-regulation is not always appropriate (as I’ve argued on this blog in connection with housing associations) but it would be a step forward for charities. They could help define the standards for the sector and design the framework for applying assessment.

1 comment:

Louisville real estate said...

Yeah, that makes no sense that it's not regulated more.