What Regulation, Who Pays? Public Opinion and Charity Regulation

January 13, 2016 at 17:48

CFG has today published a new report, What Regulation, Who Pays? Public Opinion and Charity Regulation.

The research was conducted by Dr Eddy Hogg from the Centre for Philanthropy at the University of Kent.

The aim of the research was to explore in detail the public attitude to charity regulation, and who they think should foot the bill for that regulation.

Why is how the regulator funded an issue now?

The regulator is currently fully funded by government. However, over the last 8 years the Charity Commission’s budget has fallen by 48%. This has of course significantly affected the activities that it can carry out.

In the joint Autumn Statement and Spending Review in November last year, the Commission’s budget was frozen at £20 million over the Parliament. Whilst for some this was seen as a victory – it could have been worse – this represents a cut in real terms and will continue to restrict the work the Commission can carry out.

In response to the falling funding the debate around who should pay for the charity regulator has gained momentum, with one option being charities picking up the shortfall.

In the Charity Commission’s 2015, Trust and Confidence in the Charity Commission report, one of the key findings was that 69% of the public believed that charities should at least in part pay for their regulation.

This figure has been interpreted by proponents of charging charities for their regulation as support for their position.

However, this finding is at odds with the conventional wisdom – supported by existing research and sector knowledge – that people want as much of their donation to be spent on charitable activities, rather than overhead costs, as possible.

What did we do?

Large scale quantitative studies such as that used in the Trust and Confidence in the Charity Commission report is useful in providing a general picture, but it lacks the ability to draw out the complexities and nuances of people’s attitudes.

This is why we wanted to commission a qualitative piece of work that would enable us to unpick what people thought about charity regulation and how it is funded.

Dr Hogg conducted four focus groups with a representative sample of regular and non-regular donors (including non-donors). Focus groups are a particularly useful method in this kind of study as they enable the researcher to explore how public attitudes are negotiated between people from a range of backgrounds and attitudes as they discuss and lean from one another.

What did the research find?

The findings of the report confirm strong public support for charity regulation, not only to ensure that charities are toeing the line, but also to support them and consequently their beneficiaries and supporters.

However, who should fund the regulator is far less clear cut; public attitudes to charity regulation are complex and there is no one view that can be applied to the public at large. Whilst the largest number of people in the focus groups did express support for a mixture of both government and charity funding, a significant number felt that the Commission should be funded wholly through taxation and a very few felt that charities should be the sole funders.

The report demonstrates that even where participants voiced support for charities making a contribution to the cost of their regulation, this should not be to replace government funding and the benefits of this funding model would need to be transparent and tangible.

The onus is therefore on those in favour of charging charities to make a case for why it would improve the regulator and is not just a response to government funding cuts.

What does CFG believe?

CFG’s Head of Policy, Andrew O’Brien, outlined CFG’s position against charging charities for the cost of their regulation in his speech at the report’s launch.

In brief, CFG believes that charging charities for their regulation is a false economy. Charities raise tens of billions of pounds for public benefit which enables them to support people and communities across the country, underpin other public services, and deliver preventative work which saves public money.

Investing in the Charity Commission, and thereby encouraging public trust and confidence in the sector, is therefore a good use of public money.

CFG will gladly support the regulator and Ministers to make the case for why investing in the Charity Commission is the right thing to do and has public support.