Environmental, social, governance (ESG) Governance, legal and compliance

The time for ‘rational optimism’ – A response to Matt Ridley

Another week and another article from a national newspaper calling for a ‘radical’ rethink about the charity sector (or a ‘radical cleansing’) as Viscount Ridley put it. It’s certainly been a tough few months for charities which have seen considerable scrutiny about how they operate. Although it can be uncomfortable at times, we should always welcome public debate into how charities work and the activities that they undertake. However, while we should welcome scrutiny, we should not be afraid to combat misconceptions about the sector. Public understanding and trust in charities will not be enhanced if we do not correct them. Ridley is an intelligent journalist, but his recent article in The Times on charities being in crisis, was an uncharacteristic example of a lack of understanding or research on his subject matter. Here is a response to some of the points he raised:

Charities are operating in tough financial times

Ridley’s assertion that the financial difficulties for a few organisations are the consequence of a crisis in the charity sector is hyperbole. A recent cross-sector study, led by NCVO and supported by Charity Finance Group and others, has shown that the charity sector is still effectively in recession after several years of falls in income. So we shouldn’t be surprised, therefore, if some charities find it difficult to adapt to this new environment. When the economy goes into recession, we expect businesses to close. The sad truth is that charities are not immune the wider financial environment. Of course, we can always look back at individual cases and state how they could have been avoided. But we also shouldn’t pretend that significant drops in government income to the sector, for example, will not lead to charities closing. Although we should always seek to make sure that these are as orderly as possible.

Demand for charity services is driving fundraising competition

Ridley’s article gives the impression that charities are fundraising for the sake of fundraising and now they are now living with the consequences of ‘overfishing’ for donations. This is patently not the case. Charities are trying to raise more resources from the public: partly to offset falls in government income, but also to meet rising demand for their services. The consequence of this is increased competition between charities for scarce resources. We need to tackle the issues at the heart of this, such as investing in prevention to reduce acute demand for services; reforming the commissioning of public services and expanding the donor base through promoting charitable giving. The alternative is a smaller sector, able to do less and failing to meet the needs of beneficiaries.

Nothing to see here…

Ridley also finds time to take a pot shot at the RSPCA and its Scottish cousin in his article. He makes the idea that the RSPCA and Scottish SPCA having access to the police national computer sound troubling and sinister.  However, both these societies have a long history of prosecuting individuals for breaking animal welfare laws. This is at the heart of their charitable objectives, not some PR stunt. Without the work of the RSPCA and Scottish SPCA, it is unlikely that laws would be effectively enforced, given the scale of animal ownership in the UK and the stretch on resources that the police are currently facing. These aren’t the only charities which fill a need that would otherwise go unmet. We should be proud of the efforts of charities to provide these public benefits.

If you don’t agree, you don’t have to support

Surprisingly, for an author that has often written about the importance of freedom of speech, Ridley seems to have a problem with charities that do not agree with his views. However, if a donor or supporter doesn’t agree with a charity they can always choose not to support it or they can choose to work with others to change its views. Charities from time to time have to hold unpopular views, and this is one of the reasons that we have a strong democracy. Charities campaigning activities should not be framed in a way to avoid controversy. The privilege to speak out and campaign on a range of issues must always be defended.

Charities must always be vigilant

Another criticism from Ridley is that charities have been subject to entryism on terrorism. Charities work across communities in the UK, reaching parts of society that other organisations cannot. Like all sectors, we need to be vigilant against individuals seeking to divert and undermine the work of charities in the cause of terrorism. However, this is not an issue which is limited to charities. There is no evidence to suggest that charities are more likely to be used for these purposes than businesses or other forms of organisation. We also should not forget the role that charities are playing to combat extremism.

Sock puppets?

Some readers will probably remember a report by Institute of Economic Affairs about so called charity ‘sock puppets’ (charities that receive government money and ‘lobby’ for favourable policies) – a report which has been roundly criticised for its many inaccuracies. However the notion that there are ‘sock puppet’ organisations is simply a misconception. As has been highlighted by Karl Wilding, Director of Public Policy, NCVO, and others, the amount of grants that charities receive from government has been falling over recent years. Moreover, the Compact agreement, which sets out the relationship between the state and the voluntary sector, states that the government should: Respect and uphold the independence of civil society organisations to deliver their mission, including their right to campaign, regardless of any relationship, financial or otherwise, which may exist. [emphasis added]”

The time for rational optimism

Of course, the sector has seen a few months of bad headlines in the media and, more importantly, charities are likely to see continuing financial pressures over the coming years as government spending cuts continue to bite. But we should also be optimistic. Charities keep finding innovative ways to serve the needs of their beneficiaries and deliver positive impact. The sector continues to become more effective as learning is shared and collaborations between charities grow. The British public continues to be incredibly generous and motivated to support good causes. There are challenges that we need to meet as a sector, but given our track record over the past few hundred years, we can be confident that we’ll overcome them. We must never be complacent but we also shouldn’t be downcast. Now is the time for, to borrow a phrase from Ridley, “rational optimism”. And despite all the attention, charities must keep their focus on the needs of their beneficiaries and how they can best achieve their charitable objectives.

This post was last reviewed on 28 November 2018 at 16:10
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