Is it the beginning of the end for the charity sector?

By Dhananjayan Sriskandarajah Civil Society Futures: For people of my generation, working for a charity was a noble and realistic goal. With employment in the voluntary sector rising by a third over the last decade (to nearly 3 per cent of all UK workers), charities have offered a variety of fulfilling – and sometimes well-paid roles.

Yet, the 17^th century notion of a charity with formal and special regulatory status looks increasingly outdated in a the face of new forms of citizen action and vulnerable to wider changes in the labour market. Indeed, the ‘sector’ as we know it – with its big brands and paid staff – is set to transform so much in the coming decades that I am not sure that I would recommend the youth of today follow my career path.

 

For a start, levels of trust in NGOs are falling, with UK figures worse than global averages. Many argue that the corporatisation of large NGOs has weakened their accountability to the constituencies in which they operate. Professionalized, brand-driven and beholden to government for their multi-million contracts and big business for their ‘partnerships’, charities are seen to have become part of the very system they were set up to challenge.

 

There are certainly benefits of registered charity status but many question whether they are proportionate to the extra regulatory burdens. Not surprisingly, new forms of citizen action that neither need, nor seek, such status in order to fulfil their aims are flourishing. Social enterprises are starting up at three times the rate of traditional charities, beginning – along with other new formations – to crowd in upon the space once occupied by charities alone.

Another challenge facing charities is that so much of the growth of the sector in the UK has been driven by increases in government funding. Yet, as pressure on the public purse has intensified, so too has the competition from private sector contractors competing to provide the same services as charities with fewer resources. Not surprisingly, government funding to charities in England and Wales has shifted from being mostly grants to overwhelmingly being more restrictive contracts over the last 15 years (see https://data.ncvo.org.uk/). Taken together, this has meant that the quantity and quality of funding to charities are problematic.

The suggestion that charities in the UK may begin to dwindle, or even to die out, will be anathema to many. For hundreds of years, we have conferred a special status upon these entities as being engaged in the selfless, collective pursuit of social good, celebrating their position, role and identity in our society.

 

Yet, the quid pro quo has been that we have placed little expectation on corporate entities to pursue socially responsible behaviour. By marking out and protecting the role of charities, we have set corporations free to pursue private good almost at all costs. It is perhaps a division of responsibilities that has contributed in no small part to today’s societal ills.

 

Seen in this way, would the end of the charity sector in its current form be such a bad thing, if what we’re really contemplating is not an abandonment of charitable ideals, but a broadening of the responsibility to pursue them?

Imagine a world in which entities that seek profit alone are socially, morally – perhaps even legally – unacceptable; a world in which all organisations are held accountable for their public, environmental and social impacts. Such hybridisation of charitable and private sectors has of course already begun. Formations such as B corps and Community Interest Companies bridge traditional functional divides, pointing us towards a development future that has less to do with charity and more to do with shared responsibility.

Charities in the UK have a remarkable record in activism and social change; of this we should remain rightly proud. But if we are to continue this work, keeping pace with changing needs, new technologies and a shifting global landscape, their organisational models will need to undergo radical transformation and many more, new actors will need to buy into the pursuit of social good.

 

Dhananjayan Sriskandarajah is Secretary General and a member of the Independent Inquiry into the Future of Civil Society

---