Abstract
The UK charity sector is in a period of significant uncertainty. Sectoral changes and reforms, including the creation of new charities after the contracting out of public services, have been categorised by Bruce & Chew as a marketisation effect (2011). Whereas previously, statutory funding was delivered by way of grants, now the sector is witnessing a move toward the use of contracts and a competitive bidding process.
The work of charities in the UK is under threat from reputational damage and a crisis of public confidence (Weakley, 2016), despite explicit policy rhetoric from government (Alcock, 2010; The Conservative Party, 2009) and legislation (DCLG, 2012; Teasdale et al., 2012). There is societal demand for adequate regulation in the charity sector, not least due to the special allowances enjoyed by charities, such as tax relief and a lighter touch legal framework. The public need to have confidence that increasingly commercialised larger charities are deserving, not only of their donations, but also the significant fiscal and statutory benefits bestowed upon them.
This research study analyses and evaluates the current state of ‘marketisation’ of the UK charity sector and considers the implications for governance and legitimacy. A robust regression analysis is conducted of financial statement data, taken from a full set of the Charity Commission England & Wales database, over three years from 2011 to 2013. The total income analysed represents £151 billion and constitutes 27,424 sets of financial statements.
Clear evidence is found of marketisation as a mechanism for change, yet it is only weakly correlated with efficiency gains; fundamentally, marketisation may not be delivering required efficiencies or improvements. It is also generating unwanted side effects such as commercially aggressive stances around fundraising. To facilitate bi-directional flows of resources, including donations, talented employees, and volunteers and contract income, legitimacy needs to be restored to the model.
Robust governance practices can provide those in positions of responsibility with comfort and assurance that they are doing what is expected and required of their position, and afford them some defence if things go wrong. The concept of socio-marketisation is proposed where marketisation is guided by societal aims through various governmental ‘steering media’ including overarching principles, codes of conduct, legislation and regulation.
Keywords: Charities, Governance, Regulation, Public Policy, Socio-marketisation, Legitimacy
Alcock, P. (2010) Building the Big Society: a new policy environment for the third sector in England. Voluntary Sector Review, 1, 379-389.
Bruce, I. & Chew, C. (2011) The marketization of the voluntary sector. Public Money and Management, 31 (3) 155-157.
DCLG (2012) Public Services (Social Value) Act (2012). London: TSO.
Teasdale, S., Alcock, P. & Smith, G. (2012) Legislating for the big society? The case of the Public Services (Social V alue) Bill. Public money & management, 32, 201-208.
Weakley, K. (2016) Public trust in charities at an all-time low, reveals Charity Commission research, Civil Society, 28 June 2016 [Online].
