To be, or not to be (a registered charity) – what is the future of the third sector?

Tim Rutherford, head of charity & social enterprise at national law firm Stone King, takes a look at the big picture and asks – can the traditional charity model survive?

Tim Rutherford, Stone King

It’s a pertinent question. Can the traditional charity model that we’re all familiar with and that has been in place for hundreds of years in the UK survive in our changed and changing society?

It is built on the principle of philanthropy, following a business model that is designed to operate with caution, not taking risks, whilst being run as close to a deficit as is possible. But is this still the best way for the sector to operate, and if not, what is the alternative?    

I’m being reflective in the run up to a debate that we’re hosting on this very topic in October with an expert panel. The panel will cut to the heart of the sector to present their cases for and against the motion: ‘to be, or not to be (a registered charity), that is the question’.

So what is the alternative?

Many “traditional” for profit businesses now aim to make a positive impact, rather than just focussing on growth and increasing shareholder value. Changes in technology and society have enabled this to happen, creating a broad range of social enterprises that can have a social purpose, whilst also creating wealth. We’ve been working with all manner of entrepreneurial businesses and start-ups to bridge the gap between commercial enterprises and organisations with a social purpose and it appears this area is just getting started. There are so many more opportunities and so much more to be done.

Is this a more appropriate model for today’s world?

In a speech soon after her appointment, Baroness Stowell, Chair of the Charity Commission, said “People can find other ways to do good that do not depend on registered charities”, concluding: “We cannot assume that the concept of the registered charity remains the primary vehicle through which people express their charitable instincts into the future”.

Maybe her words sounded the beginning of the end of the charity model as we know it, or perhaps this is just the beginning of the debate about significant change across the sector as a whole and the vehicle for delivering social impact. There is certainly a lot of ground to cover.

Our speakers are considering:

  • Trustees – should they be non-executive and voluntary or executive and paid?
  • Should third sector organisations be regulated and accountable as a business or as registered charities?
  • Should the future of the sector remain dependant on a model of pure philanthropy for the public benefit? Or,
  • Should the focus shift to social enterprises that deliver impact through a sustainable business, with an element of private benefit?

The debate is taking place on 16 October in London, with more information and tickets available from Stone King’s website.

Featured photo by Viktor Talashuk on Unsplash

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