19 June 2015 ACO Annual Conference 2015 View from the Charity Commission Paula Sussex, Chief Executive 1

Scale of charitable sector 164,000 – registered charities 4,648 – new registrations in million – regular volunteers 1m – charity trustees 900,000 – charity workers £64bn – annual income of registered charities £54bn – annual charitable expenditure £3bn – funds invested by ACO members

Reach of charitable sector NCVO Civil Society Almanac 2015: £12bn – gross value added (GVA) by voluntary groups (£8bn – GVA of agricultural industry) £18.8 billion – funds donated to voluntary organisations by individuals (46% of their income) Research on public trust & confidence in charity 2014: 40% of people know they, or close friend or family member has benefited from charity (up from 9% in 2005)

There are more charities than…

What is charities’ secret? Continuity and change (in almost equal measure) 5

Continuity Holding on to core values: voluntarism (vast majority of trustees are volunteers) public benefit (concept continues to be at the heart of definition of charity) independence (closely linked to good trustee decision making) accountability (public expectations are growing…) 6

Change Adapting to changing needs: existing charities evolve their services (benevolent societies at forefront of this) new charities emerge to address changing needs (see phenomenal rise of street pastor movement) moribund charities decline (c. 4,800 were removed from the register last year) 7

Public trust and confidence By retaining core values while adapting to change, charities have retained public trust and confidence Charities remain among top three most trusted groups in society But charities cannot take public trust for granted (trends show public is more demanding) 8

Role of regulation Commission as part of narrative of continuity and change: we have pedigree – regulation dates back to 1601 Statute of Elizabeth we change and improve continuously – reflecting changes in charities and in public expectations our explicit role is increasing public trust & confidence 9

Our strategic approach “The best way for the Commission to promote public trust and confidence in charities […] is to concentrate on promoting compliance by charity trustees; enhancing the rigour with which we hold charities accountable, and upholding the definition of charity”

Our key priorities Protecting charities from abuse or mismanagement Enabling trustees to run their charities effectively Encouraging greater transparency and accountability by charities Operating as an efficient, expert regulator with sustainable funding = supported by technology enabled change = more detail in a moment 11

Context when I joined CC Changing public expectations of charity Demands for greater accountability Evidence of public giving charities less ‘benefit of doubt’ Media focus on charities (e.g. pay, investments) Significant cuts to CC funding CC budget £21.4m CC budget £31.7m = = c. 50% real terms cut since Increased external scrutiny of Commission National Audit Office review of CC’s work Public Accounts Committee hearings Debates in Parliament

Context today Public expectations of charity continue to increase = see current debates about fundraising CC funding continues on a knife edge = we need to find more sustainable funding base … but, external recognition of changes we are making = NAO has since given our change programme its vote of confidence = we are improving what is within our control to improve

NAO has recognised our progress 14 “Developed a credible change programme” “Good early progress being made” “Aims to create capacity through automation” “Hard work and challenge lies ahead” “Updating approach to assessing risk”

Protecting charities from abuse or mismanagement CC has been strengthening approach to tackling abuse & mismanagement – this will continue to be one of our strategic priorities. > 100 new inquiries opened in (compared to 15 in ) Used our powers over 1,000 times in (compared to 216 in ) Looking ahead: improving our ability to assess and respond to risk

Need for stronger powers Charities (Protection and Social Investment) Bill addressing loopholes and weaknesses in our powers ensuring we can become more effective and efficient regulator second reading confirmed considerable cross- party consensus on the need for these powers.

Enabling trustees to run their charities effectively Look out for new version of The Essential Trustee (coming very soon!) New guidance relevant to grant makers in development (working with ACF on this) Do you receive and read CC News = the source of regulatory updates and guidance from the Commission

Enabling trustees to run their charities effectively We are developing new or improved online services that will provide easier and more efficient way for charities to interact with CC, and allow us to capture their data more efficiently 18

Encouraging greater transparency and accountability New charity search tool to make sure people can find the information about charities that we know drives public trust. Reviewing annual return regularly to ensure we gather the information we need to ensure accountability. 19

There is still a lot of hard work to do… Need to carry through our change programme: using data to assess and respond to risk = prioritising highest risk case work streamlining and automating lower risk work = faster, more efficient service for charities becoming employer of choice within the Civil Service = attracting the best and brightest talent

Need for sustainable funding Continued reduction in CC funding would impact our ability to regulate effectively We need sustainable, stable funding base Should/could charities fund their regulator? = CC Chairman is having conversations with charities = so far, positive responses from many charities = no plans in place, very early days…

19 June 2015 Thank you 22