Is it the beginning of the end for the charity sector?

Is it the beginning of the end for the charity sector?

For people of my generation, working for a charity was a noble and realistic goal. With employment in the voluntary sector rising by a third over the last decade (to nearly 3 per cent of all UK workers), charities have offered a variety of fulfilling – and sometimes well-paid – roles.

For a start, levels of trust in NGOs are falling, with UK figures worse than global averages. Many argue that the corporatisation of large NGOs has weakened their accountability to the constituencies in which they operate. Professionalized, brand-driven and beholden to government for their multi-million contracts and big business for their ‘partnerships’, charities are seen to have become part of the very system they were set up to challenge.

There are certainly benefits of registered charity status but many question whether they are proportionate to the extra regulatory burdens. Not surprisingly, new forms of citizen action that neither need, nor seek, such status in order to fulfil their aims are flourishing. Social enterprises are starting up at three times the rate of traditional charities, beginning – along with other new formations – to crowd in upon the space once occupied by charities alone.

Another challenge facing charities is that so much of the growth of the sector in the UK has been driven by increases in government funding. Yet, as pressure on the public purse has intensified, so too has the competition from private sector contractors competing to provide the same services as charities with fewer resources. Not surprisingly, government funding to charities in England and Wales has shifted from being mostly grants to overwhelmingly being more restrictive contracts over the last 15 years (see https://data.ncvo.org.uk/). Taken together, this has meant that the quantity and quality of funding to charities are problematic.

The suggestion that charities in the UK may begin to dwindle, or even to die out, will be anathema to many. For hundreds of years, we have conferred a special status upon these entities as being engaged in the selfless, collective pursuit of social good, celebrating their position, role and identity in our society.

Yet, the quid pro quo has been that we have placed little expectation on corporate entities to pursue socially responsible behaviour. By marking out and protecting the role of charities, we have set corporations free to pursue private good almost at all costs. It is perhaps a division of responsibilities that has contributed in no small part to today’s societal ills.

Seen in this way, would the end of the charity sector in its current form be such a bad thing, if what we’re really contemplating is not an abandonment of charitable ideals, but a broadening of the responsibility to pursue them?

Imagine a world in which entities that seek profit alone are socially, morally – perhaps even legally – unacceptable; a world in which all organisations are held accountable for their public, environmental and social impacts. Such hybridisation of charitable and private sectors has of course already begun. Formations such as B corps and Community Interest Companies bridge traditional functional divides, pointing us towards a development future that has less to do with charity and more to do with shared responsibility.

Charities in the UK have a remarkable record in activism and social change; of this we should remain rightly proud. But if we are to continue this work, keeping pace with changing needs, new technologies and a shifting global landscape, their organisational models will need to undergo radical transformation and many more, new actors will need to buy into the pursuit of social good.

4th October 2017

5 comments

  1. Ruchir says:

    Best not to conflate trends in England and wales with the UK overall. Even within the UK there are different drivers affecting trusts and support for charities.

  2. chris deaves says:

    This article has crystallises many thoughts that have been floating around in my head for a while.

    There is an implicit assumption that the ‘charity sector’ will step in (for free) where state bodies can’t (allegedly) afford to go. However, there has been no sensible dialogue with the charity sector about how they want to be part of mainstream provision, rather than the historic local gap-filling/good works; there has been a sleepwalking into this mode of operation.
    If ‘charities’ are the new vehicle for delivery in a ‘shrinking’ national and local state, then they need much better access to resources (inc. funding) than at present, with a different underlying model. You would not run a business on a one or two year assured cash flow with a cliff edge at the end; this is what the grant-funding model is. The model needs major rethinking.

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