Industry concerns raised over draft Charity Commission guidance
Melanie May | 12 April 2016 | News
The Charity Finance Group (CFG), National Council for Voluntary Organisations (NCVO), and the Association of Charitable Foundations (ACF) have expressed serious concerns over draft guidance from the Charity Commission.
The coalition of sector bodies, which is led by the ACF, fears that the guidance on the funding of non-charities risks inhibiting capacity building of social purpose organisations.
In a joint consultation response, the coalition has outlined a number of issues, with a focus on the Commission’s proposal to draw tight boundaries around how grants may be used to cover the running costs of organisations that are not charities.
The draft guidance states that an organisation must not fund the ‘core costs (or overheads) of a non-charity.’ In this present form, the coalition argues that the guidance ‘risks fettering the discretion of trustees in their ability to build the capacity of organisations that have a vital role to play in civil society such as social enterprises, start-ups and international NGOs’.
The coalition argues that it is important and appropriate that funders are able to build the core capacity of such organisations to enable them to be resilient, to respond flexibly to changing needs and to have the ability bid for other funding streams to support their activity.
The coalition also warns that many socially beneficial organisations would cease to exist without trustees having the discretion to offer flexible funding for ‘core’ essentials such as accommodation, ICT, salaries for leadership and the costs of growth and adaptation.
ACF chief executive, David Emerson CBE said:
“Charitable funders are increasingly finding themselves working in pioneering ways to deliver public benefit, often in collaboration with other and emerging sectors which may include non-charities. Funding such organisations may not be the most frequent use of a charitable grant, but it is an important tool in supporting innovation in civil society.
“We call on the Commission to take on board our concerns and ensure that trustees are enabled and informed by the guidance rather than being inhibited in delivering the vital funding which organisations may otherwise be unable to access.”
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About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.