16 Nov 2012

Is there such a thing as an independent charity?

There are certain words which in the charity world have gained a completely different meaning from the one they do in the rest of the world. Independence is one of them.

In common language, independent is used to mean 'free from all ties'. We talk about people being ‘independent’ spirits, or an ‘independent’ company, or ‘independent’ minded. In the charity sector, we have the Independence Commission, set up by the Baring Foundation, to monitor whether the sector is independent. In this context what is really meant is independent of local and central government. I would argue that independence is actually a multi-headed beast. Is a charity free from influence of any kind?

Well in reality of course, every charity is dependent on somebody: donors, funders, staff, volunteers, trustees, beneficiaries. There is no such thing as real independence of any kind for charities (or individuals). The worry is when one source of power or funds is too dominant or too controlling.

But in the charity sector we worry mainly about government and its influence, though we can’t quite make up our mind whether we want independence or we want government money. The problem is we love government money and are dependent on it (just ask NAVCA, which has seen its income drop by 43% as government and lottery grants have dropped away), we just don’t want to feel they are influencing us. We want to be independent of them. The paradox is of course that hundreds of charities bid for government contracts where government tells them exactly what they want delivered for what price. Any organisation winning one of those contracts has about as much freedom as chicken in a battery cage.

There is one final paradox of the word independence in charities. I can always tell when a charity is almost entirely funded by government. How? Its strapline will say it is an ‘independent charity’.

V, the volunteering charity, does this. Its says it is ‘an independent charity’, yet its accounts show that out of an income of £53 million, it only receives around £1 million in donations and gets over £40 million in government grants. NESTA is too new to have any accounts on the Charity Commission website because it has only just stopped being a government QUANGO, but nonetheless its website says it is an ‘independent charity’. I am not sure, but I think if I dug around I would discover that some or all of the trustees of these organisations are appointed by government. For me, describing this as ‘independence’ is Orwellian in its ability to describe black as white. Does any charity call itself ‘a dependent charity’?

Money is not the only tie that binds charities. I remember talking to one CEO of a small disability charity whose trustees were predominantly the parents of users. Her frustration was that while she wanted to move away from bricks and mortar-based education work due to its expense and low numbers of beneficiaries, her trustees had too strong a vested interest in those services to allow change.

I write all this because independence for charities is hugely important. For me, that independence is about balancing the financial and stakeholder ties that reduce organisations from being beholden to any one vested interest. Independence is about the freedom to do the right thing for beneficiaries, to speak truth to the powerful and to have the financial and strategic flexibility and dexterity to change for the better.

Joe Saxton

Are we on the money with this? Or does it depend? Leave us a comment below.

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This is truly the paradox of

This is truly the paradox of charity, Government funding and control of charity.

In New Zealand we ask where is the policy for the Charities Office to determine promotion of selected charities (events, initiatives etc) within the monthly newsletter to all registered charities.

A cornerstone of charity is that any Government of the day must not be in a position to persuade or shape charity for their own social policies.

If Government can PROMOTE, DIRECT and USE selected charities then donations made by the Public are subterfuge taxation.

Errol Anderson, Registrar, NZ Trustees Association

Joe, Your point about

Joe, Your point about contracts needs some clarification since a contract only prescribes activities within its terms - not the whole organisation which your phrasing seems to imply.

As you suggest, I think that independence is very much about the degree to which any funder or interest group can influence.

A test of independence might be to assess whether any one stakeholder relationship prevents the charity from deciding to do anything else that it might want to for its beneficiaries.

Citizens Advice is often critical of government, using clients' experience as evidence, and whilst in receipt of over £49m of government money in 2011-12.

Paul, your comments are

Paul, your comments are worthy of consideration however the question of how independent is independent is right there with George Orwell's "Animal Farm".

Independence is "Freedom from the control, influence, support, aid, or the like, of others."

There is no further qualification of "independence" needed.
You either are independent of another body or you are not.

Government / Charity contracts for services are riddled with conditions, unique reporting requirements, control, influence, stakeholder appointments to Boards, etc...

In return Government will, for their selected preferred supplying charities, promote and endorse those entities.

What is the solution? Well if a charity is promoted, directed and used by Government they are no longer independent, they have compromised their core charitable status. Therefore while they may call themselves a charity in name they should be removed from the register, and have all charitable tax concessions removed. The "charity" is now a business and should be treated as such, or at least that section of operations should be removed from the charity.

The Public should not be mislead by Government / Charity contracts, this is breaching the integrity of charity, the cornerstone of independence from Government persuasion.

Harsh but true.

Errol Anderson, Registrar, New Zealand Trustees Association

Is there such a thing as an independent charity?

Is there such a thing as an independent charity?

Joe Saxton

Are we on the money with this? Or does it depend? Leave us a comment below.

This is truly the paradox of

Joe, Your point about

Paul, your comments are

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