Many large charities are refusing to admit who funds them. Despite new government regulation urging charities to be transparent, the majority of Britain’s largest charities decline to comply.
In a new report Transparency Begins at Home: Why Charities Must State Who Funds Them, published by the Centre for Policy Studies on Wednesday 7 January, author William Norton reveals the extent to which charities are keeping their accounts from the public.
Norton reveals that £3.1 billion – 24% of large charities’ funding – comes from public money. However as funding is not been fully disclosed this figure may be even higher – as high as £6.5 billion (49%) due to £3.4 billion of funding being concealed by charities who are known to receive more public money than they currently disclose.
For the sake of democratic accountability, charities must not withhold the sources of their funding – as the author explains:
“Public money is provided by taxpayers, not the charities’ themselves. If charities are being supported to a considerable extent by public money, then taxpayers have a right to know that and to know it directly from the charities.”
Furthermore Norton notes two further reasons why transparency is vital:
“The health of the charitable sector. If large charities are dependent for most of their income on public funds then ultimately they are dependent upon someone having made a political decision in their favour. Political decisions can change. They are more likely to do so in an environment where the public finances are under considerable pressure. We saw in the financial crisis what happens when a sector’s accounting practices obscure the underlying robustness of its sources of income. When a charity is similarly dependent on a single source, that potential fragility should be obvious on the face of its accounts.
The role of the charitable sector. Once a private charity has undertaken services for a long time while dependent upon receiving public funds, the line between the public and private sectors begins to blur. It blurs in two ways. At some point does the organisation cease to be a private body? More fundamentally does it cease to be a charity?”
In Transparency Begins at Home, William Norton additionally provides a full list of tables detailing the amount of public funds that the top 50 UK charities each receive and the extent to which their funding is not transparent.
To view the tables and to read the full report click here.