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.


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

  1. Richard William Warren-Betts says:

    Thank you for your email on charities. Very interesting. Look forward to reading the whole thing. Please note that the charity I run has changed its name from Disabled Motorists Caring Association to Disabled Islanders Caring Association. This has been passed by the charities commission. Email and everything else stays the same.

  2. Anon says:

    This all sounds very encouraging but will a difference be made in time for so many small charities who are just managing to struggle on despite huge cuts to public funding? We have just had a massive cut in our council grant and are trying to avoid a merger with two other organisations which would, no doubt, see a huge loss of expertise for our client group. Councils appear to want us all to be much bigger to compete for their contracts. What happens in 2020 when there will be no government funding – or so we have been told. We need help NOW.

    • I agree completely, sadly as a local independent charity who has also now lost its funding from the public sector we will fight to survive the next few years even though we have gone through major transformation to try to be more efficient and effective because for too many years were were reliant on public sector contracts. By 2020 there will very few of us left to be part of any revolution, shame.

  3. Brian Rollason says:

    I have yet to read the full document although one thing that struck me whilst reading the summary was the idea of enforcing a limited term of office for charity trustees. I can see a problem with this straight away and may very small charities only exist with the current body of Trustees and there are no alternative volunteers that could take over. This is true for many Church Charities as often the Trustees for a Church will have many decades in the role of a Trustee.

    • Hadyn Gigg says:

      I fully concur that for small charities an enforced term of office is not realistic. It is difficult enough to find new trustees without unrealistic conditions. Do the report authors even understand how small and medium charities run and actually survive? It appears to me that these recommendations are merely looking at largerNationsl charities and trying to establish unworkable conditions on the general third sector. Experienced trustees are an essential asset for any charity and not readily available to the charity world.

      I am/have been a trustee of several different charities of varying sizes and covering varying activities and those not linked to government sponsorship have for years had to show good governance and financial acumen. The main problems appear to be with large National organisations where political influence and big salaries are evident.

    • Karl Wilding Karl Wilding says:

      Bryan, Haydn
      I’m a trustee of a small charity and have been on the board of that charity for about 8 years. We don’t operate term limits for the reasons you both set.

      I think actually the Committee were quite realistic: they’ve followed the approach taken by the forthcoming voluntary sector code of good governance, which is essentially apply this principle or explain to the world outside why you have not. There are more comments from us at NCVO on the governance aspects of the report here:

      Finally, we know that it’s difficult for small charities to recruit trustees. We’re trying to do something about that with our partners in the sector, I think we recognise we need to do more. I reckon that has got to be part of any action plan going forward.

  4. Jorge Morgadi Oliv says:

    Very very interesting and serious Document. It’ s a great happy surprise to find such a statement from the House of Lords. Here in South Europe we are suffering from ‘ideological’ prejudices in practical social Comunity field on taking care of people.I do believe in a Europe of Culture and integration of the diferencies on Caring each other as Co-Citizens, in a changing World were Europe are no more the Center of the World we have to be able to take care of one another without semingly of any kind of weaknesses or less rationality. “The heart’s reason” isn’t the only Far East’s Spiritual and Cultural heritage. Caring and support one another it’s the fundamental Law of a Changing Ethics in a Changing Population.

  5. Martin Sime says:

    Sorry, Karl but this is a report for England and Wales. Charity is devolved and the Lords wisely made no recommendations about the sector in Scotland or the Scottish Parliament or Government. Whilst I gave evidence (as did NICVA and our respective regulators)the terms of reference made it clear that were simply providing a perspective from other jurisdictions. So you ought not to refer to Britain in your introduction above……


    • Karl Wilding Karl Wilding says:

      Martyn, my sentence states that ‘this cross-party committee’s report recognise that Britain benefits greatly from our sector’. If you’d rather me put that charities benefit England and Wales, but not Scotland or Northern Ireland, I can change it… 😉

      • Martin Sime says:

        I’d rather you were more clear about jurisdiction than whoever wrote that Karl. It is important not to default to ” Britain” in the lazy way of things, as well as leaving Northern Ireland being excluded. I have a note from the Committee Clerk which makes the country focus of the Report very clear. It’s a shame in a way because the different governments in the UK could learn a lot from each other.

  6. Chris Reed says:

    Karl & NCVO, a very helpful early synopsis. I, and I’m sure colleagues as well, will look forward to your analysis of the full report over the coming weeks. At the Association of Volunteer Managers we were extremely pleased to see the much needed recognition from politicians for the need to invest in support for volunteers and in particular volunteer management, something we have campaigned for alongside NCVO for many years. Interestingly this is something that often applies across organisations regardless of size!

    • Karl Wilding Karl Wilding says:

      Good spot, Paul! These things inevitably creep in when you write a blog post in your attic over the weekend… 🙂
      I’ll get it fixed.

  7. The charity I am a Trustee of would find it very difficult if there was a limit on Trustee terms, the trustees are returned unopposed at ever AGM with a majority of the voting members in attendance, so they are happy with the status quo. If we have to ‘import’ Trustees from outside they would not have the knowledge of the charities work and operation and maybe set the charity off in a direction that the members and volunteers do not want. Also the idea of making small charities pay for their membership of the Charity Commission is a very bad move. Particularly as we were forced to become a charity by the Thatcher government in the early 90s. This is basically a tax on charities and volunteering.

  8. Daniel says:

    My interest is to know what the government sees as the role for social care charities who exist on reduced budgets and yet are a major part of the social welfare infrastructure of this country.

  9. As CEO of a medium sized charity (under £1m) I think that having terms of office for trustees is very important. Our board was moribund and totally dominated by someone who’d been Chair for 25 years. Reviewing our Articles and inserting terms of office made for better focus, greater vitality, and much better governance. Yes, it’s very sad to say goodbye to people who have contributed greatly, but we’ve managed to have excellent succession planning. Good, targeted marketing and the development of useful networks leads, in my experience, to excellent candidates coming forward. We recruit to specific skills, and retiring trustees have identified people who could succeed them with similar skill sets. It’s up to the organisation to ensure there’s excellent induction for new trustees, and candidates’ values need to align with those of the charity. There’s a danger in being too inward (and backward) looking, especially given the rapid pace of change these days.