Charity Inspectorate Not Needed, Says Minister

The government has dismissed calls for a new charity inspectorate to scrutinise the performance and effectiveness of charities.

{mosimage}The call came from Martin Brookes, the director of research at New Philanthropy Capital (NPC), which advises wealthy donors on which causes to support.

He said charities are failing to “adequately record and monitor” the impact of donations. The effect, Brookes said earlier this week, was that millions of pounds a year in public donations to good causes may be going to waste.

What is needed, he said, is a new body running in parallel with the Charity Commission, to produce performance data and rank charities by the value for money they deliver from donations.

But a spokesman for Phil Hope, the cabinet office minister responsible for charities, said the proposal would result in “unacceptable red tape” and insisted that efficiency and effectiveness is already being sufficiently studied by the Charity Commission.

“The government doesn’t believe that a new institution to assess and improve the performance of charities is neccesary or the right way forward,” the Cabinet Office spokesman said.

“Charities are already subject to multi-layered accountability and such a body would burden them with unacceptable red tape and could undermine their independence. The Charity Commission has a remit to increase the efficiency and effectiveness of charities in England and Wales.”

Private donations to charity are worth almost £9bn a year and the government provides £1.3bn in annual subsidies on tax-efficient giving.

Brookes said informed donors would be more likely to pick better charities. “The average pound donated would then have more impact. Relatively weak charities would lose funding and that would be right.”

NPC’s idea has won the support of Oxfam, whose director of corporate communications, Julie Wood, said measures to ensure that donations are reaching their targets should be welcomed.

But other charity leaders attacked the proposal. Lindsay Boswell, the director of the Institute of Fundraising, said an inspectorate’s findings could make fundraising for less popular charities far more difficult.

“For example, charities which benefit asylum seekers have to invest more in fundraising because their cause appeals to a small part of the population,” he said. “There’s a danger that if such a charity were identifiied as being inefficient because of that people would stop giving and it would go out of business.

“The big charities would get bigger and the small charities would struggle.”