Headlines: February 22nd, 2007



Charities that deliver public services are facing a mixed future according to the results of the first ever survey of all charities. More than six out of ten charities with incomes over half a million pounds a year deliver services on behalf of public authorities, but more than 40 per cent of them are not being paid enough to meet the costs involved, according to the Charity Commission.

Its report, ‘Stand and deliver: the future for charities delivering public services’ is the first comprehensive research into charities delivering public services and covers areas ranging from full-cost recovery to the length of funding agreements. The Commission believes the findings confirm some of the concerns that have been raised by charities.

Key findings show that more than two thirds of all funding agreements for public service delivery are for one year only and that only 12 per cent of charities achieve full cost recovery for all the services they deliver. Just over a quarter of charities involved in service delivery felt they were free to make decisions without pressure to conform to the wishes of funders. Some two thirds of organisations with incomes of more than 10 million pounds a year that deliver public services rely on them for more than 80 per cent of their funding. Meanwhile almost two thirds of the charities that are not currently delivering services said they would not consider doing so within the next year.

The Commission’s Chair, Dame Suzi Leather, said the report confirmed that charities delivering public services were facing hard choices: short-term funding, partial cost recovery and the danger of mission drift were realities for many organisations. She added, “With 88 per cent of charities failing to achieve full cost recovery for service delivery – statutory services or not – can we really sustain the belief that this can be in the best interests of charities, beneficiaries, or the sector as a whole?” She said the future of public service delivery by charities needed careful consideration. They could bring something unique to delivery but their independence must not be compromised by short-termism or expediency by either government or charities themselves.

Publication of the report coincides with the Commission’s new guidance for charities considering this type of work. The guidance has been added to the Commission’s website, www.charitycommission.gov.uk