Fears of the Leviathan
The Guardian, 9th March 2005
This is a golden age for charities, but the future is not so clear, says
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Have voluntary organisations and community groups reached a heyday? In the
last decade, the number of charities has risen from 98,000 to 166,000,
backed up by 200,000 community and neighbourhood groups. The number of
professional staff employed has grown to 1.5 million, while the number of
volunteers is estimated to be 6 million. In a typical year, 6,000 new
charities are born. Expenditure on services, advocacy and campaigning has
almost doubled to £20bn and assets now total £70bn.
A decade ago, the independent commission on the future of the voluntary
sector was launched and, in 1996, set out an agenda and 60 proposals, most
of which are now in operation or in the pipeline. These include tax
changes adding £400m to income; the biggest change to charity law in 400
years winding its way through parliament; new standards by which charities
can be judged; and a compact signed by ministers that protects charities
in receipt of large sums for delivering public services from restrictions
on their right to campaign.
Yet just as the sector is pausing for breath, two big umbrella groups -the
National Council of Voluntary Organisations (NCVO) and the Association of
Chief Executives of Voluntary Organisations (Acevo) - have launched a
three-month consultation on what the sector should look like in 10 years.
It is well-timed because further changes look inevitable.
It was the prime minister, in an address to the NCVO annual convention in
1999, who neatly divided the 20th century into two. In the first half, the
country learned it could not achieve its aims without the help of
government; in the second, that government could not achieve the nation's
aims without the help of the voluntary movement.
So what does the 21st century offer? Ministers have made it plain they
want to see a widening involvement of charities in service delivery. They
already provide about 40 percent of personal social care - childcare, and
support for elderly and disabled people - as well as widened
responsibilities. The Royal National Institute for Deaf People negotiated
the new NHS digital hearing aid contract with the suppliers, cutting the
price from several thousand pounds to £60.
Indeed, in the last financial year the state became the biggest funder of
charities, accounting for 37 percent of their income through its contracts
for service delivery. This raises the question posed to the 1995
commission: are charities in danger of being devoured by the state by
"swimming into the mouth of the leviathan".
Nicholas Deakin, chair of the commission, responds in an excellent new
report from NCVO - Voluntary Action: Meeting the Challenge of the 21st
Century - accompanying the consultation document. He rightly notes that
the government is not "a single marine monster but a shoal of smaller
beasts, some of whom have no ambitions to devour smaller voluntary
Even so, he warns of two other developments. First, are services by
charities likely to become indistinguishable from the State's as the
government becomes more involved in capacity building, setting minimum
standards and targets? Or second, will they become more like private
providers with whom they are competing for contracts?
In earlier reports, Acevo has made it clear there can be little expansion
before the current faults in current contracts are corrected - unrealistic
short-term funding, sudden death contracts, and unnecessary bureaucracy.
Still forced to subsidise full contract costs from charitable funds, they
want to compete with the private sector on equal terms.
But only a minority of charities provide services. The vast majority are
too small and have no wish to bid. Statistics set out the stark
differences: 1.6 percent of charities receive 68 percent of total income;
60 percent collectively get only 1.4 percent. While most big groups are
flourishing, the medium-sized and small community groups are hurting.
There are 19,000 community buildings providing urgently needed
accommodation for small community groups, but where they are owned by
local authorities, many groups are finding it difficult to meet rising
rents. Councils are currently required to seek "best value" use of their
assets, with many believing they cannot take into account group
contributions to civic society.
An equally serious problem for many is dwindling volunteers.
Traditionally, for every £1 in cash, there was £2 in voluntary effort.
There are no precise figures, but the belief in dwindling numbers in a
time-pressured society is widespread. Even sport, which claims to recruit
26 percent of volunteers, reports problems.
And then there is corporate stinginess. The annual Guardian survey found
corporate donations accounted for only 4.3 percent of charitable income.
Individuals give eight times as much. UK companies give just 0.2 percent
of pre-tax profits. The top 34 FTSE companies are in the 1 percent club;
the bottom 14 give only 0.1 percent or less. Here is a cause that could
unite all charities: a joint campaign to embarrass business into being
Malcolm Dean is the Guardian's leader writer on social affairs.
© The Guardian 2005 www.guardian.co.uk