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Charity sector update
The government plans to change its relationship with civil society, so what might this mean for charities?
STRATEGY
Sarah Loader
Consultant, Campbell Tickell
Radojka Miljevic
Partner, Campbell Tickell
Issue 77 | April 2025
The Government has signalled that it wants to ‘reset the relationship with civil society’. Towards the end of 2024, it consulted on a Civil Society Covenant, which aims to set out the terms of the relationship. This should be published some time in Spring 2025. The ambition is for an equal partnership with civil society, where it is valued and heard. Without some concrete investment in financial terms though, will this make a significant difference to charities?
There is change at the top of the Charity Commission with the recent appointment of Mark Simms, a current board member, as interim Chair. Mark will take on the role until a permanent replacement for former Chair, Orlando Fraser, is appointed. Given the pressures on regulators like the Charity Commission in terms of funding and staffing levels, it will be interesting to see in what direction the new permanent Chair, once in place, will take the Commission and how this will fit with the approach set out in the Civil Society Covenant.
Economic environment
Charities are already contending with the ‘triple whammy’ of the increase in Employer’s National Insurance contributions, the lowering of the threshold at which employers pay and the increase in the National Living Wage. They are likely to face tough, ongoing financial pressures.
“Charities are likely to face tough, ongoing, financial pressures.”
More mergers?
We have already seen a number of major charities either putting recruitment on hold or looking to make redundancies. Charities cutting back on services and staff due to financial constraints is likely to continue through 2025. We can expect increased interest in service sharing arrangements and mergers.
We know some charities are looking to ‘work smarter’, by revisiting how they provide their services, and the allocation of resources needed to do this. While motivations might include financial pressures, this can also provide an opportunity to re-evaluate how the charity operates and whether it is continuing to meet its purposes in the most effective way.
Charity Governance Code
A new version of the Charity Governance Code is due to be published this year, with an emphasis on this being more accessible to smaller charities. There will now be one code for all charities (as opposed to two previously, one for larger and one for smaller charities) and while the principles will broadly stay the same, there will be a stronger emphasis on behaviours.
“There will now be one code for all charities.”
Investment principles
In mid-January, the Charity Investment Governance Principles (CIGPs) were launched to help charity trustees, staff, and committee members make decisions on their investments. The principles reflect the Butler-Sloss v Charity Commission legal case that gave some clarity on charities adopting a responsible investment approach.
The principles were developed by a steering group that included the Charity Finance Group, Association of Charitable Foundations, National Council for Voluntary Organisations, Wales Council for Voluntary Action and the Secretariat of the Charities Responsible Investment Network. The Charity Commission was an independent observer.
