CAF report suggests alternatives to Charity Commission levy plan
Melanie May | 22 January 2018 | News
Charities Aid Foundation has released a report putting forward a number of alternatives to the Charity Commission’s plans to introduce a levy for all registered charities.
CAF has issued four counter-proposals, including the charities regulator raising income from fining charities that file their accounts late, rather than charging a registration fee.
The Commission is expected to launch a consultation on introducing a mandatory charge, with the Commission’s Chief Executive seeking to raise £7 million per year from charities.
CAF has warned however that forcing charities to divert some of their donations to fund the regulator may damage public trust, compromise the Commission’s independence, and deter some people from donating because they do not want to see their money used to pay for additional overheads. It also fears that the introduction of even a nominal charge could set a dangerous precedent, and would likely result in costs for charities increasing over time.
In a paper published last week, CAF argues that there is a need for the Commission to be better funded if it is to adequately carry out its regulatory responsibilities, but that donations made to support important causes should not be used to pay for the work of a statutory regulator.
It also argues that introducing a charge for charities that miss deadlines for filing their accounts instead would encourage better governance and reduce costs for the Commission if it encouraged more charities to file accounts on time. An average fine of £250 for the 10,000 charities that missed deadlines for filing accounts or annual returns with the Commission this year would generate £5 million, it says.
Other alternatives suggested by CAF include encouraging the Commission and Government to consider include charging for specific advice or additional services for charities which request them, funding charity regulation through Libor fines or providing additional Treasury funding, as part of a new settlement aimed to bringing communities together.
CAF Chief Executive Sir John Low said:
“It is crucial that the regulation of charities is adequately resourced. Significant cuts in funding from the Treasury in recent years mean there is now a clear need for additional money if the Commission is to be able to do its important job properly.
“However the idea of a levy on charities to fund the Commission does throw up problems – millions of generous people who give to charity will not want the money they donate to a their favourite cause diverted to a regulator instead of the front line.
“We believe there are a number of better ways to solve the problem of funding an effective charity regulator. With the issue of charging firmly on the agenda, and governance changes at the Commission, we believe now is the time to look at all the alternatives.”
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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.