Speech

William Shawcross speech at commission’s public meeting in Southampton

William Shawcross asks charities to pull together to demonstrate they are worthy of the privileged place they hold in our society.

Good morning and thank you for joining us here for a public meeting of the Charity Commission. These events are more important than ever. Charities have been in the news a great deal over the last year and as the regulator it is important we are visible.

That is why it is exciting that today, for the first time, this event is being broadcast over the internet. Anyone with access to a computer can watch our proceedings here, see the slides and interact via Twitter.

This development is part of our ongoing efforts to transform the commission into a modern, robust and nimble regulator. Let us just hope the gods of technology are with us!

If you will indulge me for a few moments, I am going to reflect upon the context in which we meet here today. I will then outline what we have been doing at the commission and what we expect from trustees.

But firstly, let us acknowledge the remarkable work of charities. They run schools, care for older people, enhance the lives of many. From cutting edge medical research to the preservation of the nation’s heritage, charities and philanthropists make our world a better place. They soften the state and as Labour MP Frank Field said at our last public meeting ‘the independence and growth of charities is crucial for a free society.’

The British, in particular, are a very generous and charitable people. We give more than our neighbours and some of our oldest charities have been helping people over many centuries. Recently, however, clouds have gathered over the charitable sector and as yet remain undissipated.

Five months ago I stood at a similar meeting to this in London. It was after the tragic case of Olive Cooke and the awful spectacle that was the collapse of Kids Company. The media spotlight became fixed upon charities and this is still with us.

After the scandals of last summer, the headlines have continued. Charity in this country is a huge endeavour. We have 165,000 charities on the register, with nearly one million trustees presiding over a sector worth £69 billion. In such a vast group, it is not surprising that as the gaze has turned upon charities, we have discovered examples of practice which fit ill with people’s expectations.

We must always stress that these are the few. They are the bad eggs and the vast majority conduct the fine work I mentioned earlier. But even without specific scandals, there has been a feeling that the practice in some charities has strayed from their guiding values.

Now some have blamed the media but this is to miss the point. The impact of revelations of the last year have been felt so strongly because they struck a chord with the public. The stories found a receptive audience who thought in recent years that perhaps some charities had allowed their values to become obscured as they adopted the sharp practices of industry.

The impact of all this has been to knock public trust and confidence, as we saw in a YouGov poll last week. Trustees must take heed of the Alert the commission has sent out today. They should review their commercial arrangements and operations and ask themselves ‘does this fit with the public expectation’.

Charities benefit hugely from their status and public generosity. Not only through donations, but over £1 billion in Gift Aid and other tax breaks. This largesse cannot be taken for granted.

Now work is ongoing and charities have begun to move past those two high-profile events of last summer. Michael Grade is establishing a new Fundraising Regulator – this is the last chance for charities to regulate their own fundraising practice. It is not the job of the commission, Parliament has not asked this of us, but if they do we will of course be ready to serve. Therefore I would urge charities to cooperate fully with the establishment of the new Regulator. The public will not look kindly on any backsliding.

In this same time, the commission has also issued new guidance to trustees. We have set out more clearly than ever what trustees must do to ensure their fundraising practice fits with the values which accompany charitable status. Simply put, it cannot be right for vulnerable people, older people, generous people, to be hounded, on the telephone, through the letter box or in the street.

We will play our part too. A well-regulated sector is one which assures the public and enables people to give with confidence.

Early on in my time as chairman, I identified that the commission needed new powers. I was therefore very pleased to see the new Charities Bill pass through the House of Commons last month, enjoying strong cross-party support. It will give us powers we need to regulate firmly but nimbly, by issuing formal warnings if charities do not follow our guidance and barring unsuitable people from being trustees, including those with serious criminal convictions.

We have been vested by Parliament, on behalf of the people, with the new powers and we will use them responsibly.

The commission has also been transforming the way it works. We are over one year into a three year process and at the end, we will be able to identify and resolve more effectively high-risk cases. Importantly, users of our services should also notice improvements from registering and updating their charities’ details.

We are, however, only 300 people - a reduction from nearer 600. The commission’s budget has been reduced by 50% in recent years. This naturally limits what we can do when regulating those million trustees and their undertaking of nearly £70 billion.

Adequate and stable funding of the commission is, I believe, the only way we can achieve an appropriate level of resource to regulate effectively. We will be, therefore, consulting on the concept of asking charities to contribute to their regulator. This is common in other sectors, such as energy or the media.

Any moves must of course not hit small charities and we would only seek contribution from larger charities. I call all of you here, and all beyond this place, to engage with the consultation and help us design a sound and fair system.

I know this will meet with some resistance but I am confident that charities will understand that they will only continue to enjoy public support if the public has confidence that charities are well regulated.

Ultimately, however, we are just the regulator. It must be for charities themselves to demonstrate to the world that they are worthy of their privileged place in our society. The vast majority of charities all do. Now is the time for them to pull together, ensuring all charities live up to this ideal.

The word philanthropy means two things: helping those less fortunate than oneself and love of mankind. Charities at their finest embody those values and they should be placed at the heart of the restoration of public trust and confidence.

Thank you for coming today and I look forward to our discussions.