Charities must justify ‘every penny of their spending’ as donors ‘doubt’ where the money is going

Charities must be able to justify “every cent they spend” in order to maintain public confidence during the cost of living crisis, the new regulator chief has warned.

Orlando Fraser QC, chairman of the Charity Commission, said with donors forced to tighten their belts, ‘caution’ would be an ‘increasingly important watchword’.

In his first major comments since taking over as head of the commission in April, Mr Fraser said his annual report showed confidence in the sector had been “largely maintained”, but depended on charities showing that ‘they used their money for those they claimed to help. .

“Frugality and restraint”

Writing in The Telegraph, the lawyer said: ‘As we all tighten our belts, charities will need to be able to justify every penny they spend.

“The public will be even less tolerant of the financial negligence of charities in times of financial crisis. Trustees and leaders of charities must demonstrate the same skills and qualities as their donors – frugality and restraint.

It comes after a number of charity spending scandals and an investigation by this newspaper found 270 charities were paying their bosses more than the prime minister.

In its annual report on trust in charities, released on Thursday, the commission found that trust in public and private sector organizations had fallen across the board. However, charities fare better than other institutions.

Confidence fell by 0.2 points in one year to an average of 6.2 out of 10, against a drop of 0.8 for the police and ministers and respectively of 0.7 and 0.6 for deputies and parliamentarians. local communities. Ministers are the least trustworthy, scoring an average of just 3.2 out of ten.

But the regulator noted that charities had never fully regained the confidence seen in 2014, before the sector was rocked by a series of debacles, including questions about Age UK’s ties to energy companies and the Oxfam sex abuse scandal.

“A stubbornly persistent skepticism”

The annual report, seen exclusively by The Telegraph, found that the sector is “struggling to dispel lingering doubts about how it is using the funds entrusted to it”.

Worries over “ownership and management of funds” are also largely to blame for people who think charities are less important than they were a decade ago, the regulator said.

Over the past 10 years, the number of people who think organizations are “essential” or “very important” has fallen from 76% to 56%.

The regulator said among the public’s most important expectations was that charities use a ‘high proportion’ of their income for charitable activities, that they have the impact they promise and that they maintain the organization’s reputation by doing so.

There is “stubbornly persistent skepticism” about the behavior and spending of charities and “doubts” about spending on donations are constantly raised by the public, he said.

The public is more divided over whether charities should get involved in social and cultural debates – something that has been particularly prominent in recent years at big organizations such as the National Trust, which has been accused of promote an “awake agenda”.

A total of 41% thought charities should respond to social and cultural debates, compared with 31% who thought they shouldn’t get involved – with the rest ‘on the fence’, according to a survey of 4,348 members of the public.

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