The House of Lords report on charities: what you need to know

Introduction: charities are vital in a changing world

The House of Lords select committee on charities has now published its report, entitled Stronger Charities for a Stronger Society (PDF, 1.7 MB). This is a substantial, wide-ranging and important piece of work that should and will shape our sector going forward. The analysis and recommendations of this cross-party committee’s report recognise that Britain benefits greatly from our sector. But that for that to continue, charities, and those who support them, need to adapt so that they can better make an impact in the changing world around them.

A report with much to say about small and medium-sized charities

This is not an ideological or party political report. It is ultimately about getting things done, about changing for the better, and supporting charities to make a bigger difference. Its concerns are mainly, though not exclusively, about small and medium-sized charities, but ultimately the content is relevant for the whole sector.

There are strong messages for those working with charities too. There’s very much a call to action to membership bodies like NCVO and ACEVO that we need to collaborate more to support charities in a changing world. We are absolutely up for that and we will be responding to the report with our own action plan.

A wide-ranging report that addresses many important issues

The report is wide ranging: there are 100 conclusions including 42 recommendations across 150 pages. The Douglas Adams fans among you might consider those 42 recommendations to be the answer to life, the universe and everything when it comes to charities. They cover governance, finance and funding (including grant funding and core costs), public service delivery and contracting, digital, volunteering, campaigning and advocacy, and regulation. The latter includes comments on the Charity Commission charging charities for regulation. The committee really has put all the pieces of the puzzle together in the report.

If you don’t have time to read the report, we’ve put the recommendations together for you in one document (PDF, 130KB).

Some of the recommendations have a very clear and specific audience: for example, government has been asked to address concerns over public sector commissioning and to help smaller charities bid for contracts. In the field of governance, individual charities have been challenged to regularly undertake skills audits of their trustee boards. All but the smallest charities have been told they should have a website or Facebook page. In other words, there are tangible actions for government, regulators, membership bodies and individual charities. We all have a stake in this.

Other recommendations, such as a call to develop more robust and meaningful partnerships between charities, business and government are longstanding, probably more aspirational in nature, and in need of ownership if we are to take them forward. In that sense, the report is extremely useful in pulling together a wide range of issues that individually we are aware of, but rarely have been brought together.

But the report is not a roadmap to utopia for realists. It is going to need an action plan for implementation, with a detailed gap analysis of existing support and provision. My sense is that a lot of what the Committee want to see in terms of support for small and medium charities is out there. Indeed, I know NCVO, ACEVO, DSC, CFG, SCC and others are providing some of it. But we’re clearly not getting through to enough charities that this support is available and that they should use it. So, at NCVO, we’re going to take a fair bit of time in the coming weeks and months to work with charities to take forward the recommendations in the report.

Governance, governance, governance

One of the main issues covered by the report is how to support trustees and strengthen charity governance. Kids Company still casts a long shadow over charities, but the mood here is carrot rather than stick. The report has lots to say about trustees: diversity, term limits, on-boarding, ongoing training and development, adoption of the Code of Good Governance and time off from work for trustees (an NCVO recommendation).

There is now a body of thinking, support and action taking place across the sector that is getting real momentum. This is a good thing. I believe that in a 18 months’ time we will be able to look back at these recommendations and show real progress. But it might also be the case that excuses for poor or weak governance may be less justifiable in future.

Charging charities for regulation: matters of principle

We are fast approaching a public consultation and debate on charging charities for regulation by the Charity Commission. The committee has rightly highlighted that before any consultation takes place, there are matters of principle that government needs to address, not least of which is whether any payments will simply replace grant funding from the Treasury. The committee says it has ‘grave concerns’ at this point in time. For NCVO’s part, among other things we would also want to see greater transparency and accountability measures so charities could know that fees were being used effectively. We’ll be talking to our members and establishing our own view to coincide with the formal consultation, which the Charity Commission said earlier this month that they plan to launch shortly.

NCVO will provide separate short briefs on the main themes in the report

Rather than try and cover all aspects of the report in this blog post, our expert policy and sector support specialists will blog over the coming week on each topic, covering the take-away issues and what charities can do in response. We’ll highlight what we think are the best available resources to help you if you want to take action. So, over the next week look out for further briefings on:

1. Governance
2. Funding and finance
3. Regulation
4. Public services and contracting
5. Impact
6. Campaigning and advocacy
7. Digital
8. Public trust and confidence
9. Volunteering
10. Next steps for infrastructure: An action plan for implementing the report

Conclusion: the world is changed by charity

A cross-party committee of peers are clearly hugely enthused and impressed by modern charities, if this report is anything to go by. They are determined to help charities navigate a world that is changing everywhere we look, and changing quickly. But it would be a mistake to presume that that admiration and enthusiasm is any way naive or blind to the weaknesses and failures of modern charities: the warning implicit in this report is adapt or die.

The message of adapt or die is also one clearly aimed at those in government, business trusts and foundations, and membership bodies who work with front line charities. There are some reasonably strong warnings in here: good words and appreciation for small and medium charities in particular will not lead to their survival in an age where it is no longer just outdated or inefficient organisations falling by the wayside. They also need to adapt their approach and recognise that weak communities cannot be helped by weak voluntary organisations.

This is a very welcome report. We should thank the Lords Committee for it. It sets out much that we can do to strengthen charities on the front line. It will take hard work to implement, but we must face that task and respond to the calls for action throughout the report. Charities and society truly will be stronger for it.