Charitable Sector

Lord Wei Excerpts

Tuesday 5th October 2010 Lords Chamber

[Lord Wei]

My Lords, I start by also welcoming the forthcoming record-breaking number of maiden speeches today, which I have no doubt will enrich our timely debate. This topic is of course very dear to my heart, not least because I am personally thankful for the great work of charities today and over past centuries that has led to a more compassionate and cohesive Britain, and not just because of my own experience in developing charities and seeing their extraordinary benefits, but because, looking to the future, there are clear links between charity and the big society—a big society in which government, business and the voluntary sector help to support and empower citizens so that they no longer feel small.

I am conscious that I have only a few minutes to speak, so I shall cover three points: first, the challenge relating to cuts brought on by the need to deal with the deficit left by the previous Administration and their impact on the charitable sector; secondly, some thoughts on the role that the charitable sector has in strengthening civil society and on related dangers to guard against; and, thirdly, the challenges and opportunities for the charitable sector presented by the big society itself.

First, there is of course a real risk with cuts and with increased demand in this next period that damage may occur to individual charities—some irreversible. I am therefore angry that on occasion the previous Government led thousands of charities up the garden path, including many around me in Shoreditch, where I live, such that a good number became so dependent on state funding that they are now overexposed.

Of course, this does not mean that we should sit back. I and those I have been advising in government are working extremely hard to ensure that in the near term forbearance is shown to charities by government departments and local authorities, that philanthropy and social investment are mobilised to help to orientate charities on to a more sustainable path, and that in the medium to long term commissioning and funding will be more local and long-term so that citizens will have more say on who provides services and support to them, with funds flowing accordingly. Indeed, far from big society being a veil for cuts, which is untrue given that it originated as an approach many years before the current recession, it offers a way out and a means for getting through this difficult period together.

My second point is that charities have a clear central role alongside their many other roles in strengthening civil society. Examples are: social action—in giving a voice to and connecting local citizens across divides online and offline to tackle vested interests and solve social problems together; public, social, and private sector reform—in mobilising resources to attract and help to scale responses that empower citizens to take more control of services and tackle complex issues where they live, for example through free schools, libraries, local neighbourhood renewal and more shared ownership of former state, financial, and business assets; and neighbourhood empowerment—in helping to uncover in a personal, local and compassionate way the assets and gifts that we all have and which we can all bring in a given location, and helping to deploy these to strengthen community capacity.

However, there are also ways in which a small minority of charities can have a damaging effect on civil society, which I have witnessed during my time as a social entrepreneur. We must guard against them. One way is having a mindset of “big charity”, which is not so much about size but about how citizens are made to feel by interacting with these organisations—for example, by frustrating citizens or donors through overly competitive, bureaucratic or unresponsive behaviours. Another way is by corroding individual responsibility, rather than by helping to release people to become active citizens, independent of state or charities. A third way is by sometimes acting as non-critical arms of government, either deliberately or unwittingly, through strings that can come attached to contracts. That can mean that they focus on citizens in silos rather than within a wider societal group and context.

Therefore, charity can, and does, play a powerful role in supporting active citizens but should not itself always be presumed to be the same as the big society, for there can be instances when it works against it, whether by accident or design. Where charity does often strengthen civil society, as well as achieve its mission effectively, it must be celebrated and supported by us all.

That brings me on to the third and final area that I want to talk about today—the challenges and opportunities for the charitable sector presented by the big society. The challenge is that, while building on the best of what has gone before and recognising in many places that many are right when they say, “We are doing it already”, a good number of voluntary organisations will find that they need to undergo a huge transition, just as will business and government, because we are now entering an era in which more power and control will shift to citizens and civil society, when demographic time-bombs and lifestyle changes are increasing expectations and demand, and when funds from government will be more limited. We are entering an age that requires a new welfare settlement, anchored in Beveridge’s belief that the state,

“should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family”.

Charities will not only need to handle the dramatic changes in the fiscal environment, and diversify income and relationships away from government to more business and other local third-party sources; they will not only in some cases need to scale up without losing touch with local people and concerns where the state has ceased to be a monopoly provider; they will also need to engage with their members and the public even more than they do today, and in ways that mesh with our varied and changing lifestyles.

Citizens and other stakeholders will increasingly want more control, more transparent information and more flexibility, to be empowered to operate as groups themselves and pull down support rather than being told what to do. Technology can play a potentially supportive role, as can new models of delivery such as social franchising and the freemium approach of giving your knowledge away for free alongside paid-for value-added support, and tools such as time credits and harnessing volunteer managers can help unleash activism without overburdening staff too much relative to increases in related activity.

So, big society will be a challenge to the big charity mindset, just as it will be to organisations in the public and private sector that have the mentality by which citizens are made to feel small.

At the same time, big society will represent huge opportunities for the charities that are able to shift towards or maintain a citizen orientation. The coalition Government have already said that they want to open up access and commissioning and level the playing field for charities; to make it easier for local groups to fund and support very local charities and community services, and expand philanthropy and voluntary action as part of that; to provide wholesale financing through the big society bank and intermediaries to enable charities to scale up by accessing finance; and to use the national citizen service and the opportunity annually to celebrate, support and showcase the work of local groups and charities, and to ensure that community organisers and neighbourhood funding help build up social capital, particularly in deprived areas, enabling the charities working in them to be more effective as they harness these networks in achieving their missions and tackling inequality. All of these represent opportunities for charities in and of themselves and I believe that they will have ripple effects that will over time grow the market for charitable action, giving, and participation.

In conclusion, we have come a long way from the traditional concept of charity. In the past decade the emphasis on the third sector has established that charities and voluntary organisations are distinct from the market and government. Today, big society asserts that there is a further distinct and overlapping sphere for the citizen and civic action to which we all belong, one whose prime goal must be to pursue Rabbi Jonathan Sacks’s vision of society as,

“the home we build together”.

So we act as citizens and give of our time and resources—not primarily or always to profit in the marketplace, or to save the state money by providing services gratis that it should be paying for, or even always out of pure altruism, though these are often benefits that can accrue from civic and charitable action; but because by doing so we imbue the world around us with meaning. We leave our mark on the world and show that we are stronger when we stand together than apart. By supporting this vision, charities will undoubtedly be strengthened by, and in turn strengthen, civil society.