The Charity Commission is “wildly under-gunned to regulate large charities and does not have the skills and expertise to do it with any credibility”, according to Simon Gillespie, chief executive of the British Heart Foundation.
Gillespie first raised his concerns about the Charity Commission this month at an All Party Parliamentary Group on Civil Society and Volunteering meeting organised by NCVO, where the topic was looking to the future for charities.
In a speech at the event, Gillespie said the regulation of the sector was not fit for purpose, arguing that a sector-wide approach to regulating charities was needed, rather than an individual approach which “did not encourage collaboration”.
Speaking after the event to Civil Society News, Gillespie, who was director of operations at the Charity Commission from 2000 to 2004, elaborated on his concerns about the regulator, warning it was not flexible enough to regulate large and small charities and had a detrimental approach to regulation which did not support beneficiaries.
“The Charity Commission has barely grappled with promoting the requirement of charity trustees to identify whether there is a need for the charity to exist or if it would better fulfil its mission with joint working or dissolution and transfer of assets to another organisation.”
He said the language of the Charity Commission suggested that trustees’ responsibilities were to the charity, not to its beneficiaries.
“It puts trustees off working with others as they become very conservative.”
He continued that the Charity Commission’s approach was to regulate individual organisations, rather than the sector as a whole. “It is missing a trick if it doesn’t recognise its key leadership role.
“It is legitimate for the Charity Commission to encourage trustees to consider their beneficiaries, not the individual organisation.”
Large charity more in common with FTSE organisation
Gillespie also argued that the Charity Commission needed to look at the charity sector by type, focusing especially on size, rather than looking at it as an amorphous whole.
“A top-ten charity has a lot more in common with a FTSE organisation than a small charity,” he said.
He continued: “The Charity Commission is wildly under-gunned to regulate large charities. It does not have the skills and expertise to do it with any credibility.”
He said there were a small number of large charities which claimed the bulk of charity sector income and this had not shifted much over a number of years.
“There is something in there about the Charity Commission regulating in this framework for large organisations. Is it responsible and flexible enough that large organisations are regulated well?”
Commission lacks flexibility
He added that the Commission was not currently flexible enough for small charities, and small civil society organisations were starting to seek alternative models like social enterprises.
“They see the benefits of being a charity, such as trust and confidence, outweighed by the unsophisticated framework for regulation.”
Gillespie also warned that charities wanting to get involved in public service delivery were seen as “second-class citizens” by the public sector.
British Heart Foundation does not deliver many public contracts, but it does try to work with the public sector through demonstrating its research.
Gillespie said it was very difficult to have a conversation with the public sector, especially the NHS.
“Charities are not often fully appreciated by the NHS when quite often they know a lot, have done lots of research and want to use it to improve outcomes in care.
“The charity approach is often dismissed as ‘special pleading’,” he said, although he added that many charities appreciated that services needed to be cost-effective along with delivering a better service.
“There is a culture in the public service that only public bodies should be delivering them,” he warned. “This attitude and culture needs to change.”
British Heart Foundation is at number nine of the Charity 100 Index with an average income of £249m over three years.
