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Early ideas to maximise the role of charities in the Covid-19 recovery and the government’s levelling up agenda.

We believe charities are uniquely placed to rebuild our society post-covid. We also believe there are three big things the government can do to unlock this potential; namely, improving how government works with charities directly, effective infrastructure, and targeted regulation.

In this note, a version of which was submitted in response to Boris Johnson’s invitation to Danny Kruger to investigate the role of charities in the coronavirus recovery, we share how we think the government can encourage a more impactful charity sector, better equipped to help people through the covid-19 crisis, bolster the levelling up agenda and play a leading role in making Britain a stronger and fairer society.

At NPC our approach centres on improving the impact of charity, an aim which we know the government shares. Read all our recommendations below, or use the links to jump straight to the ones you’re interested in.

1. Direct government support for charities

2. Infrastructure

3. Regulation


 

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1. Direct government support for charities

Put charities at the heart of government thinking

Danny Kruger has said that ‘what’s really needed to create a bigger society is, paradoxically, political leadership’. We agree.

To start with this means creating some institutions at the heart of government to play a role in developing, researching, monitoring and championing this agenda. We propose a small powerful body, with a status similar to that of the Low Pay Commission, that includes practitioners, academics and independents. It would make evidenced recommendations on how the government could support the sector better. Its reports would be presented annually to Parliament to be debated in both Houses.

We need all government departments to be thinking about the role of charities as they develop, implement and review their policies. For this to happen, there needs to be a strong body at the centre to champion the sector and ensure that as far as possible Number 10 and HM Treasury back this approach. So instead of having the Office of Civil Society (OCS) tucked away in the Department for Digital, Culture, Media and Sport (DCMS) as we do now, it should be beefed up and placed at the heart of government, preferably in the Cabinet Office.

To be a serious unit you need a voice at the highest level and a long reach into every government department. The minister responsible for promoting the social economy, charity, philanthropy, and community activity should therefore have a Cabinet position.

Similarly, civil society and philanthropy units should be present in all mainstream departments, led by senior officials. To support this function, the minster should also enforce a new ‘civil society policy test’ via a dedicated Cabinet Committee. This would mean that at all stages we would ask:

  1. Could civil society help achieve this better than the state?
  2. What does this policy do to civil society?

Equally, such a test would put a premium on those contracting out services to really see if they can design the contracts in ways that do not almost automatically exclude the voluntary sector—especially the smaller end of it.

We would need a rolling government action plan to monitor and measure progress, with good survey data to understand what is going on. The government should set up a Task Force to advise on this. The Office of National Statistics (ONS) should do more to assess and value the voluntary sector’s contribution, alongside the OCS and the Department for Communities and Local Government (DCLG).

A public commitment to a funding level for civil society, similar to international development, would be very valuable. Exactly what should go into this number is debateable and undoubtedly contested (should it include contracts that go to the third sector as well as grants, for instance?). Regardless, the debate would be worth having and the move would help shift the policy agenda towards a charity centred approach. As a start, we propose that the OCS quantify what funding currently goes to the sector, using a variety of definitions, so that a full consultation can be held on what the appropriate target should be.

Make government data more easily available to charities

The charity sector is driven by its heart, but coronavirus has revealed what many of us already knew; we need better data and analysis to identify need and determine what’s working and what isn’t.

Locked up within Whitehall departments, reams of data exist which charities could be using to understand the impact of their services. With the right safeguards, this data should be available to charities who ask for it.

The Justice Data Lab gives us a functioning model of how this could work. Government held administrative data on offending is used to create longitudinal data sets and virtual control groups so charities can get an accurate long-term picture of the impact they are having on reoffending. The technical skills needed for charities to use it are minimal. The government should build on this success, as a matter of urgency, by setting up further Data Labs wherever administrative data is already collected, especially in employment, but also in education and health.

Similarly, when the government publishes data more generally it should give guidance to charities on how they can interpret and use it. Government departments should consider adopting an Open Impact approach, making the software, APIs, data and research they produce (or fund and support) open and available so charities can assess the impact of their work, improve their interventions, and help more people.

Involve civil society in local government and public services

We would like the social sector to be guaranteed a right to be heard at all levels. In some cases this may mean having charity representatives on decision-making boards, but we do not want to insist on one institutional mechanism. We prefer to promote variety and innovation. So, we think that all public bodies should be asked: how are you including the voices of civil society in your decision-making?

In the newer ‘devo’ areas, this should be built in right from the start. Indeed, we think greater charity involvement is one of the potential gains from this new mayor-led institution. There are though many other local arms of the state, with varying degrees of autonomy from Whitehall. These include clinical commissioning groups, academy schools and chains, prison governors, and police and crime commissioners. All of them find it difficult to interact with charities, and vice versa. We must find ways to include the voluntary sector’s voice within governance, having open data about the number of contracts (and their value) going to the sector, and having sensible data sharing protocols and systems. We propose that each public service develops and publishes an action plan for involving the voluntary sector that is scrutinised not only by the relevant subject Select Committee but by the Charities Committee of the House of Lords.

We need to preserve ‘social infrastructure’. This is the local physical and social networks that enable connections to be made, that allow social capital to grow, and that is the glue that keeps communities going. Here we mean everything from libraries and parks to sports facilities and meals on wheels. There is a case for councils to be encouraged or even funded to bring back versions of the old community development officers. We also need to reform planning policy to give due weight to creating spaces where people interact, get to know their neighbours and make new friends. In essence, we need to create spaces where ‘acts of kindness’ can take place.

We think the government should prepare a social infrastructure index, looking at what is happening to social assets at the aggregate and local level. At the very least, it will spark a debate about whether we are always cutting or investing in the right things.

Strengthen the social in the Social Value Act

The introduction of the Social Value Act in 2012 should have been a major step towards getting more government commissioned services delivered through local charities. Unfortunately, our research this year showed that 64% of charities with a government contract felt it had no influence on central government commissioning, and 59% felt the same about local government.

Social value is necessarily a broad category, but the fact that the act and guidance includes economic and environmental considerations on an even footing with social ones dilutes its power to promote specifically social outcomes. The guidance is also extremely vague about what social outcomes might be, and how to weight them.

We believe more specific guidance would give commissioners the confidence to weigh social benefits against cost considerations when making decisions. We note that the government used the Social Value Awards and case studies to bring the concept of social value to life. Unfortunately, the awards seem to have been discontinued, the case studies are aging, and many of the links to additional guidance on the .gov page are now dead.

In the short term we suggest updating these resources. Longer term, we advocate working with the charity sector to produce new guidance for commissioners on what social value is, and how to recognise and quantify it.

Use the Shared Prosperity Fund to build up communities via charities

Now Britain has left the European Union, the government has an opportunity to redesign the EU structural funding it has committed to replacing. Understandably, much of the conversation around this and the wider levelling up agenda has focused on transport and other hard infrastructure. But the stronger communities and brighter life chances created by the social sector are part of a virtuous circle with investment in transport and jobs, which leads to a happier and more prosperous society.

Of course, many regions desperately need an economic boost (from which communities should benefit), but government can and should directly invest into social infrastructure to build social capital as well. Our research has shown that the distribution of local charities varies dramatically across England, with the most deprived areas often having the least. Targeting funding to these places could create a legacy of local civil society, which improves people’s life chances in these areas and make them more resilient to future challenges.

At a minimum, if the replacement of EU funding is to be delivered by Local Enterprise Partnerships (LEPs) then they must have decent representation from civil society with guaranteed charity places on the boards. At present, charities are largely absent.

We think most money should be directed through councils (who are probably more interested in social infrastructure than LEPs) but that it would also make sense if some went through well organised local Community Foundations. Those allocating the money should publish where it goes, through platforms like 360Giving, so philanthropists can tailor their own giving around it.

We have also argued – along the lines of the Charity Tax Commission – that the government should look hard at the idea of Giving Zones or of making Gift Aid differentiated by geography.

Don’t let the Lobbying Act silence charities

Charities need the confidence speak out on causes and controversies that affect their users and they are experts in, while avoiding the danger of being overtly political. The public and policymakers need the information charities gather through their research and frontline experience. The government may say that restrictions like the Lobbying Act should not stop this, whatever the legal rights and wrongs, it has undoubtedly had a chilling effect on the sector.

Meanwhile, at the local level, small charities are wary of biting the hand that may feed them. Self-censoring creates an unhealthy situation where a key component of a pluralistic well-functioning democracy is not working. At the very least, we need a convention or charter, enforced by a new Civil Society Ombudsman, which guarantees the right for charities to speak out and blocks attempt by governments to stop this.


 

Briefing

How was the £750m spent?

Read our breakdown

 

2. Infrastructure

Understand the upswell in volunteering and mutual aid during the crisis so far, so as to sustain it.

Over half a million people signing up to be NHS Volunteer Responders and around 4,000 mutual aid groups came into being across the UK since the crisis began. Many have wondered how this admirable spirit of voluntary action can be sustained, supported and grown.

Doing so would be good for society at any time but is potentially vital if the virus is with us for a long time. Vulnerable people and the NHS will need long term support.

We know from the 2012 Olympics that surges in volunteering do not necessarily translate into sustained increases in volunteering over time. We must understand where and how to make the best use of people’s generously given time – so the work they are doing has impact.

Many organisations, including NPC, are already working hard to understand what is working in recruiting and retaining volunteers, and the impact they are having during the crisis. It is too early to know just how effective volunteering during Covid has been, how much should be kept, and what changes need to happen to enable that. We think more analysis and research is needed before any definitive conclusions are drawn, or we may be in danger of chasing down the wrong solutions.

Use digital and data to enable more volunteering where it is needed

Communities reacted to coronavirus with incredible speed and resilience in organising mutual aid groups, whilst charities made huge efforts to recruit and organise volunteers (despite often struggling financially and furloughing staff).

Early, limited research by the New Local Government Network (NLGN) suggests that much of the mutual aid organising happens online, via services like WhatsApp and Facebook. While it is obviously helpful to meet people where they are, and use platforms they are familiar with, these services were never designed with volunteering in mind and have limited functionality when it comes to matching people with organisations.

Charities, mutual aid groups, and even local government could benefit from a way to connect with potential volunteers and understand their interests and availability. Likewise, individuals should be able to easily find where they are needed and find opportunities that suit them. A digital volunteering platform with information on individuals, causes and local need is the solution.

There are already precedents in platforms like Trustees Unlimited, while the technology used to recruit and utilise NHS responders appears to have been very successful. So, the technology and cost involved is not likely to be sophisticated or high, relative to the potential benefits during the covid crisis and beyond it.

The biggest barrier is likely to be collaboration and leadership so it is in convening stakeholders, not developing the service, that central government can play a key role. National bodies will be important, but we should remember that volunteering itself usually happens in a locality, so local councils, local public services and local charities need to be fully part of the picture.

Appoint a grassroots national commission to learn from our experiences tackling the virus

Charities and communities rose to the covid crisis through grit and determination, but also through working together, adopting digital technology and changing their delivery models.

We know from our work with the Inspiring Impact programme, which (among other things) provides peer networks for smaller charities, that charities are crying out for opportunities to get together with other local charities, share their experiences and learn from each other. Inspiring Impact is organising several such events (as, no doubt, are others) but they are only able to organise one for each region of England over the next few months.

We have to scale the model. We need to take advantage of the opportunities afforded by the recent cultural shift to digital and hold sharing and learning workshops in every town in the UK. Every charity involved will benefit and with a shared framework for the discussion and means of collecting the outcomes it will be possible to take these lessons and share them around the country through a commission.

Create a Civil Society Improvement Agency to support pioneers in the sector

The charity sector is full of motivated people trying to make the world better. Sometimes they are working in large established brands, with processes and practices that they know create impact, but often they are in smaller charities or fighting for their cause alone.

That is part of the vibrancy of civil society in the UK, but charities of all sizes, and more importantly the people who need them, should be able to benefit from the skills and expertise developed in the professionalised sector and academia.

We believe a Civil Society Improvement Agency, run by and for the sector, could be the answer. With a remit and resourcing that is additional and distinct from the existing charity regulators, the emphasis would be best practice, good governance, better use of data, and promoting greater collaboration amongst charities and funders.

We set out our thoughts more fully in our 2017 paper The ‘Shared Society’ needs a strong civil society, but the main tasks for any such social sector improvement agency might include:

  • Support for improvement at individual organisation level with a focus on achieving mission and making an impact, including good governance, appropriate risk-taking, sensible financial management, and worthwhile use of theories of change and user involvement practice.
  • Support for improvement at sector level with a focus on mapping the infrastructural needs of then sector across different geographies and subject areas, and promoting greater collaboration amongst charities and funders, such as using common approaches to metrics; sharing knowledge and evaluation findings etc.
  • Promotion of a more coherent sector with a focus on providing advice and support to encourage more rational decisions with regards to, for example, setting up new charities, charities working together, and mergers.
  • Supporting charities of all sizes and resources with their access the data and digital skills so they can deliver effectively in the modern context and build on the rapid progress in digital and data competency that many charities made during the crisis.

 

Debate

The case for a civil society improvement agency.

Read more

 

3. Regulation

Enable better use of Charity Commission data

Charity Commission data needs to be much better used and made available in a far timelier manner than at present. It is very hard currently to use charity commission data to understand how many charities are doing what, where. The categories that charities are put into, the way they describe the groups they serve, and their area of operations all need to be looked at urgently so we can do better analysis. The Charity Commission should be properly resourced to do this.

Encourage more transparency from grant makers

The government should require grant-making trusts to be more transparent and publish both their payout ratio and the reasoning behind it each year. Foundations generally achieve their charitable objectives by making grants to other people, so how much money they are giving away as a percentage of their assets—their payout ratio—goes right to the heart of their mission.

It is right that the balance between preserving capital versus providing grants remains a matter for foundation boards, rather than a fixed payout ratio as adopted in the United States. But a more transparent system would encourage trustees to have a conversation about whether they are paying out the right amount.

Going further, greater transparency with regards to where grants are going would undoubtedly help other philanthropists to tailor their giving in a joined up way. We think the government should back the 360Giving initiative. The government could also consider requiring grant makers to publish their giving data as a condition of tax breaks. In addition, the government must publish where its grants go on the 360Giving platform.

Require charity trustees to report publicly on mission and impact

The Charity Commission’s trustee obligations should be re-written to focus on mission and the impact achieved for the beneficiaries the charity serves. Charity trustees should be required to report each year on the impact their charity is achieving in relation to its core mission and how it plans to improve, with the reporting requirement being proportionate to size. This will ensure a focus on improving impact is embedded in the approach of all charity boards. The regulators should have the right to revoke the charitable status of organisations who are repeatedly unable to demonstrate any impact related to their core mission.

The Charity Commission should give anyone wanting to start a new charity a list of charities with similar aims in their area, along with financial information about them over the last four or five years so that the potential founder can decide if a new charity is really needed, or if they should support an existing one instead. This is intended as a nudge to think about duplication, not a block on starting new charities.

To help charities embrace this impact agenda, the government should ensure support for continuing the Inspiring Impact programme (a joint effort between NPC, NCVO and others) that has already helped many smaller charities assess their impact and adjust their strategies accordingly.

Make it simpler for charities to pay trustees

Charities are currently only permitted to pay trustees for their work as a trustee in specific circumstances and with the permission of the Charity Commission. We do not have data on the proportion of charities that take up this option, but we expect the number to be very low. Due to the complexity of the rules we would expect the charities that do exercise their option to be the larger and better resourced ones, and there seems to be some evidence to support this.

All charities should have easier access to this option. Paying trustees will increase the range of professional skills available in charity governance and is likely to increase the diversity of backgrounds that people enter the world of trusteeship from. We therefore call for the Charity Commission to drop the requirement that charities must seek permission before paying trustees.

(Edit – 24 July 2020: We recognise that paying trustees would not be the right option for every charity, but we think that those who do want to explore this option should be able to do so without a complex process which favours those with greater resources.)

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