What role should Government have with charities?

By Paul Barry-Walsh, Founder of Fredericks Foundation

Back at the start of the Millennium I’d had no dealings with government nor did I really have a view of their capabilities.  If asked, I would have said that government should have a role to play in the charity sector  though if pressed I am not sure I could have articulated what.

However, I have now been involved in four government contracts whilst chairing  a charity I founded. EVERY one in its own way has been a disaster for the charity, though in different ways.

There are some common characteristics:-

1 Excessive monitoring  and information requirements

2 Late payment to the charity

3 Difficult to deal with changing individuals, excessive reliance on procedures, lack of common sense.

4 Very slow response to enquiries with an expectation of instant responses from the charity.

You might deduce that I have concluded that government should clearly exit the charity sector completely. However my view is more nuanced than that.

Government can be good for a charity giving stability, credibility and direction. Furthermore charities can deliver at a fraction of the cost in a more flexible way than government agencies.

How can government and charities work together more effectively?

1 We all agree that there should be bi partisan support for infrastructure projects so money does not get chopped and re-diverted with each new administration, well this is even more true of charity because each minister will have his (or her) views. Charities need continuity.

2 .Most big businesses run on a few Key Performance Indicators (KPI’s) for a very good reason  because we as humans can only concentrate on a few items, look no further than a car it has the speedometer, fuel gauge and maybe a tachometer. Government have 147 KPI’s for local authorities! I suggest that no matter what the programme, government should ask only for  3 simple KPI’s. ( In one government scheme they wanted to know the sexual orientation of those receiving loans - why?)

3.Those running government schemes should be given authority to make decisions.

4. Government can devise financial infrastructure to help charities. One of the best schemes government have done for this charity sector is a scheme called CITR ( Community Investment Tax Relief). Of course it is overly complex but the scheme itself is as great for individual investors as it is for charities giving 5% pa off the tax bill for those that lend to charities. The other great government initiative is of course gift aid which probably does more good for charities than all their other single projects helping small as well as big organisations.

Government does have a role for charities

setting infrastructure and working at the top level. The further they get involved in the nitty gritty the worse they are at delivering effectively. That is not to say they should delegate to big charities, for big charities that rely on government money  to become like an arm of government and their mission becomes perverted as government drives their agenda. To prevent that our charity resolved never to have more  than 50% of our income from government, perhaps all charities should adopt that idea. So government could do a lot but currently they are doing a great deal of harm to this vibrant sector.