Charities need help to continue good work

Charities help those who are struggling but, as The Herald reveals today, many of Scotland’s 23,000 charities are struggling themselves.

According to the Office of the Scottish Charity Regulator (OSCR), 500 have failed to submit accounts on time and 360 have been removed from the register since April. Though new charities have applied for registration, the overall number is expected to fall.

In some respects, this is no bad thing. Even if much of the work is still done by volunteers, in recent years there has been a trend towards the larger charities becoming more professionally run and they have pulled away from the rest. The top 18 now account for more than one-third of all charitable giving.

Also, the establishment of the OSCR in 2006 resulted in a major shake-out of the charitable sector, with many small, dormant or moribund charities disappearing or being incorporated into larger bodies. That process is still going on.

Regulation has brought necessary transparency and scrutiny to a sector where registration carries major tax advantages. This followed several scandals in which money raised never reached the intended beneficiaries. For a charity to retain public trust, it is vital that it does what it says on the collecting tin.

Today charities stand at a crossroads and the current political situation contains both threats and opportunities. Along with the whole voluntary sector, charities are suffering from the fall-out of the credit crunch. Many of those working with local authorities have seen their budgets cut or services they provided under contract being taken back in-house. The “no redundancies” policies of councils in practice can mean outsourcing job losses to the voluntary sector. The sector is on tenterhooks in anticipation of the independent budget review on October 20.

Charities are past masters at trimming unnecessary bureaucracy and sharing back-office functions, so, unlike public sector organisations, there is little scope for economies there. Simultaneously, while public giving for specific disaster appeals has remained impressively high, unrestricted giving (to cover marketing and running costs) is under intense pressure, as are earnings from the stock market. And all at a time when more vulnerable people are more reliant on charities in the face of service cuts and rising unemployment.

Yet, those who prefer a “glass half full” perspective, rightly identify the budget review, along with David Cameron’s vision of the Big Society, as unique opportunities to apply some creative thinking to community empowerment and grassroots organisations delivering to their own needs. Cuts in public expenditure may offer opportunities to community-based programmes built around users.

If the Big Society is to be anything more than a front for cuts, and talk of involving charities more than flannel, the Coalition needs to support community-based charities to make the transition to running their own affairs. Also, it needs to ensure that the voluntary sector is embedded in the planning of services, rather than the victim of arbitrary cuts. It also must ensure that the most deprived and socially disengaged communities do not find themselves excluded from this Big Society.

Registered charities in Scotland are already involved in delivering a wide range of government policies, including the Millennium Development Goals, the green economy, retraining, grassroots sports, rehabilitation of offenders and alternatives to health and social care. In many communities, they are the stitch in time that can save nine.

Scotland is well served by its charitable sector and it provides an impressive bang for every buck. But if Scottish society is to benefit in the long term, rather than charities being forced to compete among themselves for an ever-shrinking funding pot, in the short term the entire sector requires more support from both individuals and the state.