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Charities must hold on to their identity, says outgoing Commission chair

Outgoing chair of the Charity Commission Dame Suzi Leather has warned charities that they must continue to demonstrate that they are fundamentally different from other types of organisations if the sector is to retain public trust. 

Describing in her valedictory speech at the Almshouse Association’s annual general meeting in London yesterday what she called “a less tangible, less visible and longer-term challenge to charities' future”, Dam Suzi warned that there is evidence that charity as a concept is not well understood by the public.

She attributed this to the “perceived blurring of boundaries” caused by the emergence of community interest companies and social enterprises, a recent emphasis on co-operatives and mutuals, and the need for charities themselves to behave more like businesses.

Dame Suzi did not criticise these developments themselves, rather highlighted a regrettable collective consequence of their recent prevalence, posing the questions: “Will charity continue to mean something special? Sufficiently unique to earn the trust the public places in charities and the privileges they enjoy?

“The Commission's research into the factors that influence trust and confidence in charities shows that many people are already unaware of how broad the charity sector is. Not realising for instance, that museums, art galleries, universities, youth groups are more often than not, charities.”

Shadows on the horizon

Despite describing herself as “broadly optimistic” about the future of the sector, Dame Suzi warned that there were still some “shadows on the horizon” that charities, and the Commission as their regulator, must keep a close eye on – an immediate financial risk being chief of these.

She referenced recently-published research by New Philanthropy Capital – in which 90 per cent of charities with incomes over £800,000 said they face a riskier future – and the Commission’s own review project with the Institute of Chartered Accountant in England and Wales (ICAEW), which “further confirmed that money is on charities’ minds”.

“In 2011/12, charities reported cuts amounting to just over £75m,” Dame Suzi said. “And for this current financial year, charities have so far reported losing just under £2m. Some groups say they’ve suffered cuts worth hundreds of thousands of pounds.

“But I've also learnt not to underestimate charities' ingenuity for making a little go a long way. And for finding new, innovative ways of sourcing income.”

No compassion fatigue

Dame Suzi said she was pleased that the number of charities in England and Wales is more or less the same now as ten years ago (approximately 162,000 then and around the same today), but warned of changes down the line.

“The number of new charities leaving and joining the Register each year has remained relatively stable, at between four and six thousand a year. These figures give us grounds for optimism – there's no evidence that our society is suffering from any kind of compassion fatigue.

“But the sector could look very different in a few years time, and that will bring pain – for many charities and for many beneficiaries.”

The Charity Commission’s outgoing chair concluded her speech by summing up the organisation she is leaving's new approach: “A focus on compliance and accountability and a new commitment to working in partnership with the sector.”

This article was taken from www.civilsociety.co.uk – http://www.civilsociety.co.uk/governance/news/content/12595