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The charity universe; do numbers matter?

June 25, 2014

Am I getting old? Am I alone in being bored with ‘experts’ telling the sector what it should do. I’m a subscriber to Third Sector Magazine, a great publication, but prone to hosting guest contributors whose principal purpose seems to be to gain business for their organisations through hectoring readers. I’ve alternately been amused and irritated by some of these articles, fully understanding that life is difficult and that they need to earn in order to eat.

But having displayed blogging silence for quite a time a recent article in Third Sector magazine: ”Housing Associations should build partnerships with the voluntary sector” (13 May 2014) has inspired me to action.

The most interesting point in this otherwise facile article was that housing associations “have had an uneasy relationship with the voluntary sector, despite being not-for-profit organisations and in some cases, even registered as charities” (see Third Sector magazine 13 May 2014). Yes dear reader, the core purpose of housing associations is to build and maintain social housing. And why not?

Several assumptions underpin this and other commentaries. Firstly, that there is such a thing as a coherent sector. Secondly, that society will be better off if organisations within the ‘sector’ work together.

But what is the ‘sector’. Even the NCVO has difficulty describing it. In their latest Civil Society Almanac NCVO describes Housing Associations as part of Civil Society, although not part of the voluntary sector. Why therefore should housing associations “take the shackles off and unlock their ambitions for being more than house-builders”. Surely increasing the stock of social housing is a huge public benefit in itself?

Indeed, some academics argue that there is no such thing as a sector; that it is a construct – whether by politicians or policymakers, wishing to find something coherent to negotiate with. It’s easier to find a neat counterparty than to take on board diversity of purpose, size and mission.

On the other hand there are those who wish to represent the sector. But even NCVO (an organisation for which I have a great respect) with its 10,000 members cannot ‘represent the sector’ in its full diversity. There are, after all, over 160,000 charities in England and Wales, let alone the plethora of other loosely associated civil society organisations. The other major umbrella body which often ‘speaks truth to power’, Acevo, declared a membership of only 1,520 in 2013, a major decline from its 2,017 members in 2009.

But there is also an urge to rationalisation. Recently, Lesley-Anne Alexander, CEO of RNIB, a strong proponent of charity mergers, pointed out that there are 733 UK charities that have blindness or sight loss in their objects which raised unnecessary competition for grant funding or public service contracts and indeed could confuse their beneficiaries. RNIB is doing its bit to simplify this space by merging with 14 in previous years. Fair enough.

But she also felt (supporting recent comments by the outgoing Charity Commission CEO) that barriers to entry should be raised. Those seeking to establish a new charity should be told by the Charity Commission to spend six months researching other charities in the sector to see if they can achieve their objectives through working with existing organisations.

My choice definition of what is a charity is the one in the 2011 Charities Act. This defines a charity as “an institution which is established for charitable purposes only [and] falls to be subject to the control of the High Court in the exercise of its jurisdiction with respect to charities.” Charities are bounded by historic definitions and purposes albeit updated by modern tinkering, and hemmed in by tax law. By their very history and definitions charities cannot be neatly restricted; furthermore, why should they rationalise to become lean, mean service delivery machines?

I don’t hear too many calls to make it more difficult to set up a private sector business, or form a limited company; indeed we are in an era of light touch regulation. So why such dirigisme when we look at charities? Although it may not be a perfect market, there is nevertheless a life cycle to all organisations, including charities. Many naturally fall by the wayside or are absorbed when their founder moves on. Why place artificial barriers around the expression of values, volunteering and social purpose?

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