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“Charities must read the writing on the wall”: The warning the sector should heed

UK Charity Commission Chair, Baroness Stowell, warns that charities are no longer “fulfilling their potential”

Trust in the sector has plummeted to new lows and it is up to the sector as a whole to improve their methods of attracting donors, the UK Charity Commission warned.

Speaking to the Royal Society of Arts, the Commission’s Chair, Baroness Stowell, said the future of the sector depends on changing behaviours to regain trust from donors. She warned that problems across the sector are not isolated to just scandals.

“If you are involved in a charity today, you form part of the ship that holds within it the very concept of charity. And if you fail the public, you’re chipping away at the hull of that ship, and you risk sinking more than just yourself and your organisation.”

Stowell said that charitable behaviour has the potential to bridge a divide between the organisation and its donors and said that charities are not currently “fulfilling their potential”. She said if the sector as a whole does not improve, it will decline because “there will be ever more new kinds on the philanthropic block” to take their place.

Stowell did attribute the fall in trust to scandals that have rocked the sector. In May it was revealed that the United Nations knew about the sex-for-food scandal inside the foreign aid industry for more than a decade before it came to light.

The Charity Commission also recently revealed that its whistleblowing reports were up by almost 15 per cent, with 101 reports made by employees to the regulator. This is up from the 88 reported incidents made in the previous year.

“People have seen some charities displaying uncharitable behaviour – whether that be aggressive fundraising practices, exploitation of vulnerable people, a single-minded pursuit of organisation growth – and they have become less include to trust them.

“They feel that the promise of charity has not always been kept,” Stowell said.

Due to the scandal of some charities, all charities are experiencing a lack of trust from donors. Stowell insists that for the concept of charity to survive, the sector must behave more ethically and in line with people’s expectations than it currently is.

Stowell warns that people have found other ways to do good and no longer depend on registered charities, including through technology and social change means.

“I welcome these developments, as I am sure we all do,” Stowell said.

“But they raise questions about what makes the registered charity, with the tax breaks and the legal benefits associated with it, distinctive and special? My conviction is that being a registered charity will need to amount to more than it does today if that status is to survive, let alone thrive.”

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