Charities Bill [HL]

moved Amendment No. 14:"Page 6, line 4, after ““promote”” insert ““and increase””" The noble Baroness said: I begin with an apology because the amendment is worded rather awkwardly. What was intended by it was that the charitable resources objective should be to promote the effective use of charitable resources, and to increase them—to increase the amount of resources, as well as their effective use. With the leave of the Committee, I hope that I may be permitted to speak to the spirit of the amendment rather than the actual wording. This is a short but potentially significant amendment that I tabled because of the response that I received when I said, at Second Reading, that the Bill had not taken sufficient opportunity to encourage giving—to promote philanthropy. As I pointed out, in this country we have a long way to go in philanthropy compared with, for example, the United States. The Minister was kind enough to say in his response that my comments were helpful, and I have since received further encouragement from the noble Lords who have added their names to the amendment; I am grateful to them. The amendment would commit the Charity Commission not only to promoting the effective use of charitable resources, but to taking opportunities to increase them. As Members of the Committee will know, the voluntary sector gets approximately 30 per cent of its income from individuals and grant-making charities. Increasing charitable resources in the form of philanthropy and income from individuals would, in turn, increase the capacity of the sector. What is important about that form of income is not only that it gives the voluntary sector greater capacity overall, but that it may come with fewer strings attached. It so enables charities to address issues and situations that may not be possible with other forms of income, such as those that they get from government sources or business. Philanthropic income gives the potential for charities to be creative, flexible, and sometimes unorthodox or risky in the use of their funds. It allows them to innovate, often with benefits that may emerge only over the long term and are difficult to quantify or   may be unfashionable. All those are important elements in a healthy and mature society. There is value in encouraging the supply of such income and, notably, in providing a supportive environment for individuals who wish to give substantially or to create grant-making trusts. At present, that is not necessarily the situation. That is because all charities broadly have the same regulation, whether they raise money in the street and provide services, have an endowment or a single sum donated by a philanthropist, or provide grants for other people or institutions. The purpose of the regulation of charities is primarily to safeguard the interests of those who entrust resources to charities, or the interests of recipients of services. In the case of grant makers, however, there is rarely any solicitation of funding from either the public or the Government. Nor are services directly provided to the public. Leaving grant makers to fulfil regulations and reporting criteria that are focused on operating charities and do not fit them well is a burden and a disincentive for individuals to give further. The research study by the Association of Charitable Foundations among people of substantial means found that,"““a fifth of those who had set up grant-making charities had serious reservations about one or more aspects of doing so, the majority of which were related to the burden of bureaucratic regulation””." General regulation may have adverse effects on the charitable sector as a whole. The report by the joint scrutiny committee on the original draft Charities Bill recognised the vital role of grant makers to the sector, and saw appropriate regulation as imperative to ensure that,"““the regulatory burden on grant makers does not discourage philanthropy””." While I am certain that the present leadership of the Charity Commission is aware of this, it would still be helpful to give the commission a specific direction to be conscious of developing philanthropy. Therefore, I am proposing this strengthened objective to increase charitable resources. This would be an incentive for the commission to be more supportive of regulation that would encourage philanthropy and facilitate the work of grant-making trusts. That would in turn increase the funds coming into the charitable sector and enable more good work to be achieved by the sector as a whole. I beg to move.