NPC has urged the Charity Commission to make it easier for voluntary organisations to pay trustees to increase diversity on boards.
The think tank’s request came in response to the charity regulator’s consultation on its annual return process, which ran from 9 June to 1 September, and received 460 responses.
It called for charities to be required to report on the diversity of their trustee boards as well as evidence of the impact they have made over the past year.
Meanwhile, Charity Finance Group called for any new requirements to “avoid unnecessary and unreasonable regulatory burden”.
NCVO urged the Commission to “listen to feedback from charities and sector bodies”.
‘Wide range of responses’
Helen Stephenson, chief executive of the Charity Commission said: “I am pleased that a wide range of charities and interested parties have engaged positively with our consultation on the annual return, and would like to thank all those who made time to have their say.
“The annual return is a vital tool, which helps us gather the data we need to regulate effectively, and which serves to widen public understanding of charities.”
The regulator is now reviewing the responses, and intends to publish an analysis of the consultation, along with the new annual return questions, later this year.
It revealed the general tone of engagement was positive, and that early analysis of the feedback indicates areas of focus will be on how the Commission gathers data in a way that is straightforward, and relevant to charities regardless of their purpose and the type of work they do.
NPC: Impact reporting and diversity of trustee board
NPC called on the Commission to require all charities to report on whether they have tried to measure their impact in the past year.
The think tank recommends the regulator ask every charity: “In the last financial year, have you measured or tried to understand the impact of your work?” and suggests charities upload an impact report or other evidence of their impact, such as an evaluation or their theory of change.
NPC also said charities should have to report on the diversity of their trustee boards.
Theo Clay, policy manager at NPC, said: “Charities are here to make an impact. It’s not enough to just say what we spend if we can’t show that the money is being spent well.”
He said asking for charities to report on impact “will encourage more charities to think about impact in all they do”.
Clay also said that not everyone can afford to give their time for free so, if the sector want to be inclusive, the Commission should not create the impression that paying trustees is wrong.
“As a sector we need to be more representative of the people we serve. Reporting on the diversity of trustee boards and making it easier and acceptable to pay trustees, rather than inadvertently discouraging it, would encourage greater social and ethnic diversity,” he said.
CFG: ‘Relevance, simplicity, accuracy and proportionality’
Richard Sagar, head of policy at Charity Finance Group, said: “It’s pleasing to see that this important consultation on annual return has had a healthy response from the sector.
“This is an important piece of work, and we support the Commission’s aim to gather the data it needs to regulate effectively and widen the public’s understanding of charities.
“Our consultation response set out four key principles to underpin any future changes: relevance, simplicity, accuracy and proportionality.
“To avoid unnecessary and unreasonable regulatory burden, the rationale of any new and additional reporting requirements must be clearly articulated. And it must be possible for charities to accurately collect and verify the data sought.
“We also urge the Commission to produce clear, simple guidance to accompany the return.”
DSC: New questions should only be added 'if there is a clear benefit'
A blog by Jay Kennedy, director of policy and research at DSC, said: “In general, we support more flexibility with the caveat that the cost-benefit of additional questions should be justified, and new questions only added if there is a clear benefit and proportionate burden on preparers.”
Another DSC recommendation includes removing the ‘Political Activities Policy and Procedures’ from the list of options, or explaining “what this means and why it is being asked, with links to relevant guidance such as CC9.”
On proposed changes to the annual return regarding location of charity operations, the blog reads: “Whilst having this data could be very useful, there are significant methodological and data integrity problems with designing related questions in a way that will gather robust data without being overly burdensome. Further, there may be safeguarding risks to publishing some data.”
DSC has also published its full response to the consultation.
Rebecca Young, policy and influencing lead at NCVO, said: “We hope the Commission will listen to feedback from charities and sector bodies. We look forward to working with the Commission to ensure proportionate and effective regulation of the sector.”
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