ELECTION SPECIAL: Will ‘new politics’ deliver for the greater good?

By: 

Cheryl Chapman

Managing Editor, Philanthropy UK

A week is a long time in politics, as has been proved in the last seven days. This article seeks to summarise the response and reaction from many of the movers and shakers in the philanthropy sector. But as details of the new coalition government are still being confirmed as we go to press, we can only hope that this election round-up will not be overtaken by subsequent events. (Just in: Nick Hurd announced as charities minister)

The sector on the whole has reacted positively to the formation of a coalition between the Liberal Democrats and the Conservatives, which has been set up with the express intention of setting aside party political differences and engaging in ‘new politics’, based on collaboration and compromise, to create a Big Society and a fairer Britain.

Both parties’ pre-election manifestos spoke clearly of a commitment to build a stronger society and both parties view the third sector as a key player in delivering the services to achieve that.

Questions that now need to be addressed are whether the new government will invest sustainably in the third sector and what steps they will take to create policies that promote philanthropy. The sector feels there is an opportunity to influence this agenda and is now busy organising itself to help make that happen.

John Low, chief executive of CAF (Charities Aid Foundation) says, “The details of the agreement between the coalition partners will be more critical than the sector realises. It will be the plan against which policy is delivered,” says Low, who has experience influencing policy for the RNID under a coalition government in Scotland.

He believes a coalition government offers the sector an excellent opportunity to influence policy. “We are in territory where a few rebels voting against the government can make a real difference. If we can convince a few individuals of our aspirations we have the opportunity to exercise real power.”

Low says opportunities where individual MPs have a say on specific issues such as Question Time, Early Day Motions and Adjournment Debates will become much more important to the sector, giving them a say within parliament.

Equally important to the sector’s ability to influence is where charity sits within the government. Low would like to see it remain in the Cabinet Office, which he successfully campaigned for as chair of the  Association of Chief Executives of Voluntary Organisations (ACEVO) . He fears it could be ‘dumped, in an act of tokenism’, into a resurrected Office of the Deputy Prime Minister, which he says would be difficult to influence.

If charity remains the responsibility of a minister, Low would welcome either the Conservative MP Nick Hurd or the Liberal Democrat MP Jenny Willott in the role, both of whom were shadowing the post for their respective parties.  “Both have sector-wide experience at a strategic level. But it might be good to see someone from within the sector having an expert role, maybe as a Lord, bringing fresh thinking to the government.”  

Some continuity is expected, as the role of the Ambassador for Philanthropy - a personal appointment of Gordon Brown - is likely to survive, says Roberta d’Eustachio, chief of staff of the ambassador Dame Stephanie Shirley.

d’Eustachio says, “I have it from good sources that the new government will not only endorse the national and global activities platform of Dame Stephanie Shirley but will become more intimately involved in weaving these tangible philanthropic ideas into the foundation of The Big Society that was at the heart of the Conservative’s manifesto.

“We believe, because we've heard first hand, that the new Cameron/Clegg government is open to innovative ideas that incentivise the higher rate tax payer, and all taxpayers, with creative schemes to activate their generosity and at the same time make giving easier. It can remove obstacles and red tape that inhibit people from taking advantage of approaches used elsewhere and that have proven successful in unleashing philanthropy.”

Geoff Mulgan, now director of the Young Foundation, who previously held several roles advising on policy and strategy at number 10 under Blair, is positive about the new coalition. He says, "David Cameron’s 'Big Society' speech chimed with our work for many reasons:  it named the Young Foundation as one of the organisations he would like to see supported for finding, developing and growing social ventures, and he committed to financing the training of community organisers, something we’re doing through the Uprising programme.

"Our hope is that government support will encourage philanthropists to become more involved in these fields, and more generally government is likely to have most impact if it focuses on a small number of pressing challenges and finds ways to work in partnership with philanthropy.  We’re still assuming there will be some kind of office of civil society to coordinate efforts in government. But it will be highly focused work on issues like youth unemployment, care for the elderly, recidivism and family which will do most good."

Louise Richards, director of policy and campaigns at the Institute of Fundraising, suggests charities that are reliant on statutory income may get “a blessing in disguise”, should touted public spending cuts be held up in the parliamentary process.

She also notes that the high proportion of new MPs and a potential coalition government could allow charities more lobbying room and the opportunity to pick and choose the best parts of different party manifestoes to push for. Richards calls for civil society champions who could spearhead such campaigns.

The Institute has also called on the new government to extend transitional relief on Gift Aid due to end in April 2011 whilst talks to make Gift Aid more efficient and successful are ongoing.

“This would send an important signal of the government’s wish to support the tremendous work which charities do,” says the Institute’s spokesperson.

NCVO has called a summit 'to look at what the new government will mean for the people and communities we work with' while ACEVO will write to new Chancellor George Osborne to request a meeting about the 'big society' vision.

NCVO’s chief executive Stuart Etherington says, “It is now our responsibility to work effectively with this new coalition government. It will be imperative that our sector works together to create an environment in which voluntary organisations can thrive.”

This position differs somewhat from that expressed by Low of CAF, who believes the sector should not speak in ‘one united voice’. “We will gain advantage using the small differences, opinions and positions between the parties to pursue the specific issues that affect us in a more sensitive, malleable House of Commons.”

Reflecting on the likely impact of tackling the budget deficit, Etherington notes, “We recognise that these are difficult economic times and the government will have to make some tough decisions.

“However, it is important that spending plans recognise the role that voluntary and community organisations play across many policy areas and that they are properly supported to play those roles, not because of who they are, but because of the real difference they make to the lives of individuals and communities.”

On the subject of the severity of cuts that will inevitably hit the sector, Low is sanguine, “There is no money. We will have to work smarter.”

But Low hopes money and a commitment to philanthropy will be delivered by the government to the sector through a social investment bank and continued tax incentives. “I hope a social investment bank, to which both parties have committed in their manifestos, will receive substantial funding, initially around £200m, and will continue to be fed from the ‘unclaimed assets’ pot.

“Incentives such as payroll giving, gifting of shares and Gift Aid form a significant part of tax planning for the very wealthy. It would be disappointing and damaging to giving if the Liberal Democrats’ vision of a 23% composite Gift Aid rate was introduced.” He says the Conservatives’ streamlining approach to Gift Aid reform would be ‘more robust’ in the long term.

Nat Sloane of Impetus Trust also calls on the new government to fund the sector in a sustainable way. “It would be a worry if this was seen as an opportunity to deliver services on the cheap. Organisations need to cover their costs and to be sustainable and government needs to address that.”

Sloane is optimistic that the coalition’s collaborative approach will differ from the ‘Punch and Judy politics’ of opposition parties, that for now seem to be in the past. He hopes this new style of government will facilitate the delivery of meaningful policies that will address the ‘knotty problems’ the sector tackles.

As well as hoping for greater investment in social enterprises and organisations, Sloane strongly supports the creation of a Social Innovation Fund (SIF) as introduced in the USA by President Obama.

He believes that this sort of initiative “could identify high-impact organisations and enterprises and invest with matched funding from the government to scale them up. This would increase the potential to deliver the innovative solutions that we see in the charity sector.

“An ongoing fund would also recognise and address the issue of funding as something that needs to happen over a longer period than the life of one parliament.”

Cathy Pharoah, co-director of the Centre for Charitable Giving and Philanthropy at Cass Business School, also believes evidence-based research is now vital to show the impact the third sector can have in tackling society’s problems.

“We don’t need to tell the government what can be achieved, we need to show them,” she says.

Pharoah believes that mirroring the collaborative behaviour of coalition government will help the sector find a clearer voice, adding, “We need to find common ground and collaborate through debate and take a less polarised, more consensual position.

“We have an opportunity to look at our own policies and come to some agreement about what our priorities are. Civil society is about democratic values and we may need to compromise in some areas to deliver for society as a whole,” says Pharoah.

A less enthusiastic view of the new coalition is held by Malcolm Hayday, chief executive of Charity Bank Limited, who voices concern over whether a hung parliament can really deliver. “A hung parliament may not deliver the fundamental action necessary to restore financial balance and a more cohesive society. Whilst we all have to share the pain, actions that may limit wealth creation will knock on in time to the amount of money people feel they are able to give away. The Government may also consider reforms to Gift Aid, tax reliefs for social investment, and the like as marginal, capable of being deferred to another time, particularly where there is no consensus between the parties.

“Given the importance of the public purse to charities and social enterprises, it is vital that work begins quickly on the comprehensive spending review so that organisations can enter 2011 knowing how much public income they can receive.”

Mathieu Mori, policy advisor at the Charity Tax Group voiced concerns over a mooted rise in VAT which he says would leave a big hole in charity budgets.

He says, "Hundreds of millions of pounds would be lost by the sector if the VAT rate were raised but also if, as some are predicting, the base of VAT was widened (i.e. the charity sector could lose some of its  zero- rates. We hope that the new government will think carefully about the unfair position of charities when it comes to VAT before taking any steps that would make the situation even worse."

Mori also calls for action on the introduction of new substantial donors’ legislation, which has been the subject of negotiation over the past year, a review of the guidance on the new rules surrounding cross-border giving,  and simplification of the Gift Aid regime with more supporting measures to increase take-up of Gift Aid.

The Charity Finance Director’s Group (CFDG) while welcoming the coalition urges it “to consider, with recognition of the fact that the recession has had a belated impact on charities, how to best facilitate this sector in maximising available resources and in maintaining current high quality services.”

Megan McInally, CFDG policy manager adds that working groups which are already in progress, in areas such as the simplification of Gift Aid, remain high on the agenda.  McInally adds, “These issues are likely to become more pressing as public service spending cuts and other losses of income take their toll on the sector.”         

So the sector is optimistic it has a strong future role to play, yet realistic about the challenges it faces with inevitable budgetary cuts. There is a pressing need for charities to communicate the value they can deliver to society through government to gain donor backing, and it needs to be supported by evidence-based research. The government must be shown why it should invest in the third sector and why it should incentivise donors to do likewise.

Both government and the sector are using the same language; words such as 'duty', 'responsibility', 'civil society', 'sustainability', 'collaboration' and 'compromise' are being used by all leaders; however whether the language of ‘new politics’ will translate into ‘new action’ towards philanthropic funding remains to be seen.

ELECTION SPECIAL: Latestnews/ELECTIONSPECIALNPCsTrisLumleyonwhythesectorneedsameasuredresponsetonewgovernment" target="_self">NPC's Tris Lumley on why the sector needs a measured response to new government

JUST IN: Nick Hurd announced as charities minister

Useful links
Civil Society: More sector reaction

Third Sector: NCVO calls for Summit

Third Sector: Ballot box casualties and victors

Third Sector: Defeated Conservative charity leader Shaun Bailey says 'big society' idea must be handled with care

CFDG: Election Watch