Earlier this month, a National Audit Office report for the Public Administration Select Committee laid out the scope of the charity sector in the UK. It revealed, basically, that charity regulation is all over the place.
There are almost 350,000 charities in the UK, with a total income of more than £120bn. Less than half of these – around 163,000 charities, with a combined income of £55bn – are registered with the Charity Commission.
Of the rest, around 2,500 are housing associations and educational establishments. With a combined income of £62bn, these organisations make up most of the missing income.
Most of the rest of that missing income belongs to a motley crew of anomalies known as exempt charities, including – but certainly are not limited to – charitable non-departmental public bodies, foundation schools, friendly societies, community benefit societies, charitable investment funds, and Kew Gardens, which the NAO puts in a category all by itself and is regulated on a one-to-one basis by the Secretary of State for the Environment, Food and Rural Affairs.
The NAO has managed to ascertain only that there are more than 1,000 exempt charities, and that their income is not known. Some have a regulator; others do not. Some are supposed to be moving to the regulation of the commission, but have been delayed because the commission itself has its doubts about whether they are charities at all.
This leaves around 180,000 organisations that are not registered with anyone.
The majority of these have incomes under £5,000 a year and are not required to register. Most of the rest – around 80,000 – are churches and chapels belonging to 19 religious denominations.
In 1993, a law was passed requiring 14 of these denominations to register with the commission in 1996. In 1996, this deadline was extended to 2001. It’s since been extended to 2002, then 2007, then 2012. A week or so ago it was extended again until 2014.
Five other denominations, including such well-known groups as the Church of the Nazarene, the Independent Methodists and the Wesleyan Reformed Union, were forgotten under the 1993 act, lost their exemption, and should have registered yonks ago. But according to the commission’s official guidance, the commission and the Office of Civil Society have decided not to register them anyway.
In 2006, the exemptions were partly superseded by another law that says excepted charities with incomes over £100,000 should register with the commission.
However since the commission doesn’t have a good handle on who they are, and since they don’t necessarily know that they’re supposed to register, a number of those who are supposed to have registered appear not to have done so.
The commission clearly doesn’t have the resources to register 80,000 charities –registering 2,000 academies was a huge strain on its resources, even before its budgets were pared back to clean white bone – and churches are in no hurry to sign up; so it’s likely they’ll remain excepted for a fair few years yet.
Currently, the closest thing to a regulator for these organisations is HM Revenue & Customs, which at least requires them to fill out a fit and proper persons form before they can claim Gift Aid on the contents of the collection plate.
HMRC may well regulate more charities than the Charity Commission, although several recent announcements, including a fiasco in which HMRC demanded charities submit accounts online without giving them a form capable of doing so, suggest charities are not top of its agenda. The two regulators do not appear to speak too often.
The likelihood, then, is that despite several attempts to unify charity regulation in recent years, we will continue to rumble on with a fragmented sector, subject to conflicting regulation by a dozen different bodies, with no effective oversight of the whole.