UK: IM SOUNDING BOARD - TAKING THE STRAIN OUT OF GIVING. - New charities are being registered at the rate of one every hour every working day - 12,559 last year alone - according to the Charities Commission.

by John Naylor, Secretary and treasurer of the Carnegie UnitedKingdom Trust and Companion of the IM.
Last Updated: 31 Aug 2010

New charities are being registered at the rate of one every hour every working day - 12,559 last year alone - according to the Charities Commission.

Whether you take the view that this growth is healthy because it shows that as a nation we are becoming more concerned about our fellow citizens, or you believe it reflects the decline of the welfare state, there is no doubt that over the past 20 years the charitable sector has become more professional, skilled, experienced and businesslike.

With a turnover of around £17 billion from donations, endowments, grants and interest earnings, employing some 4% of the nation's workforce, and with combined net assets of about £30 billion, Britain's charitable sector is indeed big business. The latest annual income league table of the top 20 of the country's 170,000 registered charities is headed by the National Trust with £78 million, followed by Oxfam on £59 million, the Royal National Lifeboat Institution with £56 million and the Save the Children Fund with £53 million.

In parallel with this development, companies have increasingly recognised the value of charitable donations as a means of promoting their image both as employers and as contributors to the community. In the 1970s it was not unusual to find the company secretary responsible for charitable involvement. Sometimes it was part of the chairman's office - often with his wife having a say on where shareholders' money went. In the 1980s it became fashionable to set up community investment or corporate social responsibility units attached to the marketing or human resources departments. The aim was to give much sharper emphasis in linking donations to business objectives. This was illustrated recently by Derek Wanless, the NatWest chief executive, who announced that the bank had refocused its community investment programme to 'align long-term benefits to the community with our business objectives'.

Management techniques in the charitable sector have become more sophisticated. When I was National Secretary of the YMCA, consultants were employed to develop economic models of our mix of housing finance. Today some charities now raise funds by employing the direct tele-sales techniques more associated with consumer marketing. And businesses are now operating for profit some of the services once reserved for charities, such as providing residential care for the elderly. There is also a growing trend towards partnerships between national and local government and charities which have come to rely on the Treasury and councils for a large part of their core funding.

Yet the big charities are still growing and receiving an increasing proportion of voluntary funds. Last year the largest 200 charities saw their income rise by 4%, despite the recession. The remaining charities suffered a decline and that gap is growing.

Since the mid-1980s, total voluntary giving in real terms has been virtually static. While the top 100 UK companies donated £146 million in 1993-94 - up 9% on the previous year - one in six of the same top 100 reduced their donations. Corporate giving in the UK is only one-tenth of that in the US, giving rise to fears that money will continue to go to charities that are comparatively safe and have similar cultures.

The big charities are but one, albeit substantial, element of the voluntary sector which is a kaleidoscope of different bodies that includes small, often local, self-help groups needing very small amounts of money to enable them to grow and develop. There is a growing danger that companies will fail to discover and recognise these groups because it is quicker and easier to do business with the sophisticated fund-raisers and marketing staff engaged by the 'Big Boys'.

Foundations and trusts, such as the Carnegie United Kingdom Trust, can help companies forge links with those groups because they have built up networks and contacts through the voluntary sector and can help to ensure that donations to local groups are used effectively. The Trust, created in 1913, operates at two levels: alerting the nation's policy-makers to social trends and developments that require their attention; and grassroots grant-giving. Among its many achievements are two pieces of research: one in 1917 which led to model mother and baby clinics, the forerunner for modern pre-and post-natal care; and the other, before the second world war, which became the basis for nutritional food programmes during the war.

The current Carnegie Third Age Programme is the follow-up to research carried out by the three-year Carnegie Third Age inquiry, a study into the repercussions of one of the great social achievements of the 20th century - the fact that people are now living longer than ever before. Our concern is to secure recognition that the 14 million people aged over 50, who are active and independent, should be seen as a major resource. The Trust has also helped to establish and support local libraries, village halls and and to instal church bells. It provided the core funding for ADAPT - Access for Disabled people to Arts Premises Today - the first to focus attention on the barriers preventing over six million sharing in our cultural life.

Carnegie's policies are reviewed every five years to ensure they are relevant to present needs. It is because it is concerned with the growing power of the big charities, often at the expense of direct aid at local level to a variety of community-based groups, that it is urging the corporate sector to rethink the direction of its charitable work.

Has the time not come for small and middle-ranking companies, in particular, to recognise that community giving is not part of their core business - although it is, of course, important to it? Just as they contract out parts of the business that others can do better, they could ask a foundation or trust, which has the expertise to assess and monitor grant applications, to administer their community action programme and submit an annual or half-yearly report to the board. This would release management time and energy and more importantly, develop new ways of corporate giving which could increase the benefit to the local community.

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