18/11/2013 07:34 GMT | Updated 23/01/2014 18:58 GMT

Should We Forget About Charities as We Know Them?

William Shawcross, the chair of the Charity Commission, has questioned whether new definitions of charity are needed to highlight the differences between various types of charitable organisation.

He said: "I believe we should consider whether a single definition of charity can continue to accommodate so many wonderful, diverse models of non-governmental organisation. The commission's online register of charities could play a role in describing the different models more clearly.

"Could it, for example, distinguish between organisations that are truly voluntary, those that rely on public donations of time or money to support their work and those that achieve their charitable purpose by delivering government services?"

For a while I have thought that there are at least five different entities that are all described as charities:

  • Small, user-led organisations that exist for, and are run by the beneficiaries. These tend not to have paid staff and few, if any, assets.

  • Small charities with up to a dozen or so members of staff, delivering services to beneficiaries in a locality, again with few assets.

  • Medium-sized regional charities, more commercially-minded, with assets, employing a significant number of staff (in the case of my organisation, Brighton Housing Trust, approaching 300 people on our payroll), and delivering a combination of national and local government contracts as well as activities funded through charitable sources.

  • Large, national charities which have substantial assets or resources, multi-million pound turnover, bank borrowing and bond issues amounting to billions of pounds and which, in some cases, are charitable only in name and for tax purposes.

I am not sure whether something far more fundamental is needed, a new settlement that sets out expectations and obligations, particularly on medium and large charities.

The overwhelming majority of charities remain truly committed to their charitable objectives, even those who receive government funding. But as more of the state's work is outsourced, mainly to the private sector but also to large charities, how should we distinguish between those charities that are user-led, and others that, perhaps, compromise their independence by going into the state's pay? Perhaps such charities should have separate designations to ensure charitable activities are not remain compromised.

There is already a problem with some charities being seen as having been co-opted by government to do its work. A legitimate question for them is whether their charitable objectives are truly being delivered, or whether decisions are being driven by the wishes of government or even the banks?

The reality is that the moment to question whether some charities remain charities has long passed. With some growing to become multi-million pound businesses, and salaries of top executives inflated to match, there are those who are no longer independent, relying totally on government work.

I recently wrote on Huffington Post asking whether charities can be political without being political. In that post I tried to highlight the importance of charities being free to draw attention to the impact of public policy on their beneficiaries, but without being party political. My view is that this is a duty for charities to ensure that the voice of their beneficiaries is heard; this is not optional.

Shawcross is right to make his challenge. He said: "I don't pretend to have a firm answer to these questions, but I do think we - by which I mean the charitable world in the widest sense - need to have the debate. And I think we should have it now, while levels of public trust in charities are high and public support for charities is strong."

To answer my question, no, we shouldn't forget charities as we know them. We should be proud of what they achieve and we should safeguard their independence. The risk is that the rest of us might be overshadowed by the excesses of the few. In that scenario, those who will be disadvantaged most will be our beneficiaries.