Charities are becoming big business. There are now 190,000 of them in the UK, attracting annual public donations of more than £8bn. And as the scope and the aspirations of the welfare state are scaled down, charitable giving is growing fast, although the UK still has some way to go until it reaches the levels of charitable giving found in the US. There, charitable donations account for 2.2% of the nation's GDP and although UK citizens are the most generous in Europe, the equivalent figure here is just 0.9%.
As well as benefitting from individual's largesse, charities are also increasingly becoming central to the delivery of public services. Both of the main political parties see the voluntary sector – sometimes labelled social enterprises or even the 'third sector' – as an increasingly important part of improving both local service delivery and social cohesion. To this end, the Government currently gives charities and other voluntary organisations more than £5m per year.
This has been controversial within parts of the charity world who argue that charities are losing their independence as they become reliant on the state, but one clear effect of the growing size and importance of the charitable sector is the additional scrutiny – by both regulators and the public – that charities are subjected to.
Charities come under increasing scrutiny
New legislation to regulate the activities and management of charities was passed in 2006 and although surveys usually show that people trust charities far more than government bodies or commercial companies, charities are coming under increasing scrutiny from donors, government and the general public as the voluntary sector's political and public profile reaches unprecedented heights. The role of charity leaders in maintaining the public's trust and confidence in their organisations, as well as ensuring they retain the sector's integral values of independence, accountability and transparency, has never been more crucial.
At the same time, charities are being asked to a wider range of services to a more diverse set of stakeholders, while money is getting tighter and the need to earn income is intensifying. These developments mean that those running charities need to adopt a more professional approach – and seek professional advice.
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