Civil Society

Baroness Tyler of Enfield Excerpts

Thursday 18th July 2013 Lords Chamber

[Baroness Tyler of Enfield]

My Lords, I, too, congratulate the noble Baroness, Lady Prosser, on securing this timely debate when the combination of public spending cuts, decreasing charitable donations from the public, and sharply falling trends in corporate giving have pushed the sector into a fragile financial state. I declare an interest as president of the National Children’s Bureau, vice-president of the charity Relate and co-chair of the parliamentary inquiry Growing Giving.

As other noble Lords have already said, civil society does not limit itself to the voluntary and charitable sectors but runs across all aspects of public life. However, it differs in one key respect from other sectors, in that it has a mission statement that is focused on the benefit of society and the collective good. Today I will be focusing my remarks on charities and the voluntary sector, concentrating particularly on three issues: the overall funding situation, the reduction in individual donations and improving the impact that the corporate sector can have.

On funding, a recent Charities Aid Foundation report on UK giving found that there had been a 20% fall in individual public giving, leaving charities £1.7 billion worse off. According to NCVO, 43% of charities’ funding is provided by individual donations—the sole largest contributor—and this has left many charities struggling to find other sources of funding. Indeed, one in six charities said recently that it is likely that their charity may have to close in the next 12 months. Other charities, as we have already heard, are having to make heavy cuts to frontline services at precisely the time when the need for the crucial services they provide is going up, particularly for the most vulnerable. The second biggest funding contributor is the state, providing 37% of charities’ income. This is a dangerous balance at a time when, as we all know, public funding is in short supply and approximately 50% of local authorities are cutting charitable grants disproportionately to the rest of their public services.

So the problem is very clear, but what are the solutions? Many charities are adapting to a new climate, and I know from my own experience that many have been doing this through mergers and collaborations, developing new business models such as social enterprises, and seeking new sources of finance, including the newly emerging social investment market. It is also important to remember that the vast majority of charities—the figure is thought to be 75%—do not receive funding from statutory sources and so look to the general public for money. However, there is a clear need for the Government to assist charities in this major change, and I look forward to hearing from the Minister what the Government are doing and what more they plan to do in this respect.

I turn to individual giving. The cross-party parliamentary inquiry, Growing Giving, chaired so ably by the right honourable David Blunkett and of which I am a co-chair, has highlighted a reliance from charities on support from older people and is looking into new innovative ways of getting younger people involved and excited about giving their time and money to charity, with a particular focus on the importance of charities providing volunteering opportunities and helping young people to get involved as youth ambassadors, young trustees and so on. The inquiry has highlighted the need for charities to be more involved in the current citizenship curriculum in secondary schools in order to highlight the issues that they tackle and to give students as much information as possible.

A key point is finding organisations that young people feel passionately about, but also trying to match that with charities that are in greatest need of support. Perhaps it is unsurprising that charities that affect children in particular were found to be the most popular among children, with some 35% of 9 to 11 year-olds selecting those as the type of charity they would most like to support. It is vital that charities can clearly demonstrate the impact of their work to children and the wider public, and I think that this is easier when their involvement is local. What are the Government doing to encourage schools to develop partnerships with local charities, to enhance not only the immediate prospects of those charities but also the long-term benefit of educating children from a young age about the impact that their money and time can make—something that can then take root and translate into more sustained giving in later life?

What is the role of the corporate sector? A recent report by the Directory of Social Change, referred to by my noble friend Lady Barker, found that companies are keen to encourage giving in the workplace by their employees, including by providing volunteering opportunities through company foundations and associations with charities, as other noble Lords have said. Simple initiatives such as Movember—the competitive growing of moustaches for donations to testicular cancer in November—have proved very popular with employees who enjoy showcasing their charitable efforts. The introduction of payroll giving, which takes place in a relatively small number of companies, has certainly helped in the giving of money to charity by providing an easy way for employees to give money every pay day. It has proved a popular scheme. However, it would seem many companies are missing a trick. A recent Charities Aid Foundation report found that one in three employees would be likely to give through payroll giving if they had a chance. That same report, however, showed that only one in 34 employees in Britain gives regularly through the payroll giving scheme, showing the huge margins by which this scheme could be expanded.

Like my noble friend Lady Barker, I was fascinated by the recent report showing the new data on corporate giving, particularly the fact that big private companies, in terms of reinvesting pre-tax profits, are nowhere near the 1% benchmark set, and that the top 420 companies are giving somewhere in the region of 0.3% in terms of cash, making up some 2% of charities’ income.

So what do I think the solution is? I think one solution would be to encourage companies to match the charitable giving of their employees. This has been suggested as one way of increasing the amount donated by companies. Matching schemes, while having the positive effect of the overall company giving, could also galvanise the workforce, giving employees the feeling that they have more power to make a difference if what they donate will be doubled. Perhaps the Government could look at ways of incentivising corporate giving, perhaps through the tax system.

It is important that we do not forget the roles of smaller businesses in the UK, which are also vital players in civil society, often at a more grass-roots level. The sponsoring of sports teams, giving to local charities and paying greater attention to the environment are all aspects that small businesses have worked on, and due to their greater geographic spread they have managed a much wider reach than some of the big corporations that are largely London-based. I conclude by also quoting from the World Economic Forum, which stated:

“Civil society should be the glue that binds public and private activity together in such a way as to strengthen the common good … based on the core values of trust, service and the collective good”.