Accessibility A A
Search Help
Search Site
Suggest a resource
UK voluntary sector,
A report published last month in Britain has raised fears in that country that the voluntary sector’s role in the delivery of statutory services poses a serious threat to many charities’ independence, reputation and financial survival. It also provides food for thought for the sector and government in this country.
The report reveals that many charities are increasingly dependent on state funding — a dependency that could undermine the ethos and autonomy of many organisations and, as the character of the sector changes, potentially unravel public trust. But it also confirms that the rush for public service contracts is destabilising some charities, and outlines the startling extent to which they use money donated by the public to subsidise underfunded contracts with state organisations — often, it suspects, in breach of charity regulations.
The report, Stand and Deliver: The Future of Charities Delivering Public Services, is based on a survey of almost 4,000 charities, commissioned by the Charity Commission. It gives the most comprehensive and accurate picture to date of the scale and impact of public service delivery on the charity sector in England and Wales.
The survey shows the extent to which charities are delivering services for local authorities, primary care trusts and other statutory agencies. More than 60% of medium-sized and large charities are providing a range of services from crime prevention to recycling and transport. Health and social care provision tops the table for the most common type of service that charities deliver, closely followed by education and children's services. The survey also reveals how public funding has become a major income stream for charities delivering public services. One in three receive a staggering 80% or more of their income from statutory funders. This rises to two in three for the largest charities with an income above $pound;10m.
The survey paints a bleak picture of how many charities achieve full cost recovery from statutory funders. Of the charities that responded, only 12% of those delivering public services reported that they got all their costs covered in every case. Even more worrying, 43% said that they do not obtain the full costs for any of the services they deliver. The larger and best-run charities appear better at getting funders to fully cover costs than their smaller and medium-sized counterparts. Charities with an income between $pound;100,000 and $pound;1m, the survey showed, are least likely to achieve funding that matches the cost of providing the contract, making them most vulnerable to financial difficulties.
The survey's findings on independence are no less cautionary, showing that almost half the charities delivering public services admit they couldn't agree with the statement: "Our activities are determined by our mission rather than by funding opportunities." Furthermore, only 26% of these charities agree that they are "free to make decisions without pressure to conform to the wishes of funders".
Significantly, the survey flagged up marked differences between responses from charities that deliver public services and those that do not. This leads the report to suggest that charities delivering a public service are "more likely to be affected by 'mission drift' or pressure from funders and less likely to involve trustees in decisions about what activities they will undertake." It adds: "These results suggest that there may be some cause for concern regarding the impact of public service delivery upon the independence and governance of charities."
The commission survey, conducted last summer, is published at a time when government has ambitions to increase the participation of the third sector in the delivery of public services. Currently only 2% of government expenditure on public service delivery is paid to charities. That is expected to significantly increase following the establishment of the Office of the Third Sector last year, and the launch in December of the government's action plan for third sector involvement.
State of Dependence. From The Guardian, 21 February 2007: http://society.guardian.co.uk/futureforpublicservices/story/0,,2017225,00.html.
Source: NZCOSS News 02 Mar 2007.