Gareth Morgan: Charities’ needs lost amid terror talk

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DAVID Cameron has announced that new laws are to be brought in to prevent convicted terrorists funnelling money from UK charities to extremist groups.

But is this really a major issue affecting the charity sector? Personally, I think we should be more worried about stories such as the recent one in this newspaper reporting a theft of nearly £180,000 from one of the major arts charities in this region – the Leeds Grand Theatre and Opera House.

Then there is the issue of charities being diverted from their charitable aims and the needs of their beneficiaries. Sometimes this is as a result of unscrupulous individuals, but it can also be because public sector bodies want to use charities to deliver their own agenda. That, too, represents abuse of charity.

So where should the priority be for the Charity Commission, the statutory regulator of charities in England and Wales? In recent years, the Charity Commission has faced huge financial cuts – worse than many other public sector bodies. In real terms, its funding in 2014 is only around half of what it was in 2007, and by law it cannot charge fees to charities: its funding comes solely from the Treasury.

As a result, the Commission has lost many good staff, and changes to procedures mean that it is often very hard for perfectly reputable charities to interact with them. If you want to speak by phone, they are only available for three hours a day during the week – and it will take a Google search to find their phone number or address: they don’t publish them on their main website.

One of the Charity Commission’s most important functions is not in regulating existing charities, but registering new ones. Most people agree that charities play a vital role in our society, and new charities are constantly being formed to address new issues. Last year almost 5,000 new charities were registered by the Commission. I regularly advise people setting up new charities, and the straightforward registrations are now handled fairly swiftly, but I have also had experience of one which took two-and-a-half years. Correspondence went unanswered for periods up to 11 months.

So I was encouraged this week by the Government’s announcement to allocate a further £8m of funding to the Commission. But it won’t go very far as the money is to be spread over three years, so it only amounts to around about a 10 per cent increase – nothing like enough to remedy the cuts the Commission has experienced. At the same time, a Draft Protection of Charities Bill has been published for Parliamentary scrutiny, which will enhance the Commission’s powers in a few areas where there are currently gaps.

These are sensible measures which will go a small way to redressing current problems. But I find it extraordinary that the Government can only bring itself to support such steps by dressing them up as a crackdown on the use of charities to fund terrorist organisations.

Undoubtedly there are a few occasions where funds raised by charities have ended up in the hands of terrorists or other armed groups. But this may be unavoidable. International development charities working in some of the most war-ravaged parts of the world will tell you that you cannot get aid to those most in need without co-operation from whoever controls the local area.

They may end up having to pay unsavoury militia groups for transport, for example. But they will normally do everything in their power to work through local groups to handle the aid distribution. The Charity Commission understands this and, provided the charity concerned has carefully considered the risks, there is no breach of charity law when aid is provided on this basis.

However, if I was in a group deliberately raising funds for a terrorist purpose, the last thing I would suggest would be to form a registered charity for the purpose. Would the prospect of gift aid on donations encourage us to run the operation as a charity, bearing in mind we would have to collect the names and addresses of every donor for submission to Her Majesty’s Revenue & Customs, and prepare annual accounts which would need independent scrutiny.

So, yes, let’s have a properly resourced Charity Commission to register charities and have proper oversight of charities, and to take action where abuse happens. But let’s get away from the idea that charities are common vehicles for terrorism, which does nothing to help the vast majority of reputable charities in our region.

• Professor Gareth Morgan is an expert in charities at Sheffield Hallam University.