Day Conference Report and Abstracts

Governance and Regulation in the Voluntary Sector

• Governance and Regulation of the Voluntary Sector: Current Issues and Research Themes - Gareth G Morgan, Sheffield Hallam University
• Reforming Gift Aid: Estimating the effects for donors and charities - Kimberley Scharf, Warwick University and Sarah Smith, University of Bristol
• The impact of counter-terrorism regulation on charities and their governance - Alison Dunn, Newcastle University Law School
• Governance issues in voluntary organisations with local-national structures - Paul Robson, Age Concern and Chris Cornforth, Open University Business School
• Governance as dialogue - working across divide communities - Christina Schwabenland, London Metropolitan University
• The Compact: Power and the embedding of the Voluntary Sector in changing concepts of public governance - Mike Hemmings and Rachel Casiday, Department of Voluntary Sector Studies, University of Wales, Lampeter

Report from Gareth Morgan, event organiser

The biannual one-day VSSN seminars rotate around different UK universities and other institutions. Together with the annual NCVO/VSSN Researching the Voluntary Sector Conference, the day seminars are the main means for VSSN members to come together, hear papers, and enter into serious discussion on issues of voluntary sector research.

This was the third time on which we at the Centre for Voluntary Sector Research (CVSR) at Sheffield Hallam University (SHU) had hosted a VSSN seminar. Some 45 VSSN members and guests were registered for the day, which was on the specific theme of 'Governance and Regulation in the Voluntary Sector'.

A key feature of the day seminars is that at least 40 minutes is allowed for presentation and discussion of each paper, and all papers are presented sequentially. So unlike larger conferences, there is time for presenters to develop an argument in detail, and to get into some significant issues of debate with the audience - and there is no risk of a having to chose between papers being presented simultaneously in different rooms. This does, however, mean that it is getting more challenging to get papers accepted for a VSSN seminar: on 19 May there was one invited paper, but we had to choose from eight submissions for the remaining four slots - we would like to invite all those who submitted abstracts and hope that those whose papers were not selected this time will consider revising them for a future VSSN seminar, or perhaps for the NCVO/VSSN conference.

The morning session was chaired by my SHU CVSR colleague, Tracey Chadwick-Coule - this included two papers looking at different issues of charity regulation. I took over the chair in the afternoon for three papers linked to issues of governance.

The day began with a welcome from Professor Mike Smith, Pro-Vice Chancellor for Research and Knowledge Transfer, Sheffield Hallam University and I then presented a brief introduction to the day which I called Governance and Regulation of the Voluntary Sector: Current issues and research themes. This was followed by an invited "keynote" paper on Reforming Gift Aid: Estimating the effects for donors and charities by Kimberley Scharf from Warwick University and Sarah Smith of the University of Bristol. Sarah explained the background to this key research undertaken for HM Treasury and HM Revenue and Customs and showed how the study explored the impact of possible changes to the regulatory system around gift aid relief for higher rate tax payers. The findings revealed some interesting conclusions around donor behaviour in the different scenarios. This was one of the first papers VSSN has received from an economics discipline. (See below for the abstract and a link to the full report of this study from HM Treasury.)

The second morning paper was from Alison Dunn, Newcastle University Law School on The impact of counter-terrorism regulation on charities and their governance. Alison's paper looked at a range of unexpected consequences of counter-terrorism legislation on charities, especially those working overseas in zones of conflict, drawing on an extensive analysis of the legislation. In particular, she highlighted the enormous burdens placed on charity trustees by such legislation.

The morning concluded, as usual with a VSSN Business Meeting which was chaired by Colin Rochester (VSSN Vice-Chair) in the absence of Chris Cornforth (VSSN Chair). There were no items requiring formal decision by members, but the business meeting was used to mark two very significant events in the life of VSSN:

1. The first issue of the VSSN-supported journal, Voluntary Sector Review had now appeared - all paid-up VSSN members had received their copies a few weeks previously. The editor, Peter Halfpenny, spoke about its significance, and encouraged members and others to continue the flow of high quality papers (full research articles and/or items for the "practice" and "policy" sections).

2. The VSSN Steering Group had just completed the tendering process to find a new VSSN Executive Officer, following completion of the initial three years of service provided by the Association of University Administrators. The contract to continue the work had been won by Dr Siona Liff of the Derbyshire-based company Appleby Ltd. Sonia was present at the seminar and spoke briefly to members. (The main VSSN e-mail address info@vssn.org.uk now goes to Sonia - see contacts for the new VSSN postal address and phone number.

At lunchtime, participants moved into an adjacent room for a buffet lunch provided by SHU Catering Services and ample time for networking.

The afternoon session comprised three papers. We began with Governance issues in voluntary organisations with local-national structures by Paul Robson of Age Concern and Chris Cornforth of the Open University Business School. As mentioned, Chris was unable to attend but Paul presented some of the conflicts and dilemmas in complex organisations with group or federal structures, drawing especially on the experience of the Age Concern Federation, and the issues arising as a result of Age Concern England merging with Help the Aged to form Age UK.

The middle paper for the afternoon was Governance as dialogue - working across divide communities presented by Christina Schwabenland of London Metropolitan University. Christina's paper took governance to a new level, looking at the work voluntary organisations working across religious and communal divides in three countries: India, Israel/Palestine and Ireland. She proposed the theoretical construct of the "dialogic" organisation, which provided a means for different communities to enter into dialogue and work together though a voluntary organisation established with governance across two communities.

The final afternoon paper was presented by Rachel Casiday, of Department of Voluntary Sector Studies, University of Wales, Lampeter (co-authored with her colleague Mike Hemmings who could not be present). She presented new research on The Compact in a paper entitled The Compact: Power and the embedding of the Voluntary Sector in changing concepts of public governance. This took us beyond the governance of individual voluntary organisations into broader issues of public governance using various literature on power to explain issues in the operation of The Compact in different situations.

All five papers provoked a wide range of questions. At the end, all the speakers (apart from Sarah Smith who had had to leave early) came together for a brief final plenary. Despite the different foci of the paper, a theme began to emerge linked to Christina's dialogic model: in every case there were issues of voluntary organisations forming vital bridges where they had to steer patterns on governance between conflicting interests of donors and taxpayers, regulators and beneficiaries, local and national stakeholders, or charities and funders.

At the end of the day thanks were expressed to all participants, and to the SHU colleagues involved. Following the close of the formal session, many participants continued discussions over tea while the VSSN Steering Group adjourned for business.

This note is just a personal reflection - see below for the abstracts provided by each presenter.

Abstracts

Governance and Regulation of the Voluntary Sector: Current issues and research themes - Gareth G Morgan – Sheffield Hallam University

This brief opening presentation will highlight some of the significant themes in voluntary sector research around the issues of governance and regulation, especially in terms of changes which have impacted on the UK voluntary sector in the last decade (2000 – 2010).

It will serve as an introduction to the day and to the papers that follow.

Mention will be made of themes such as:-

• the new systems of charity law now in place with in all three UK jurisdictions (England & Wales, Scotland, Northern Ireland) especially the new emphasis on public benefit
• the significance of the charity accounting framework as a regulatory driving force and especially its enforcement in Scotland
• reforms to tax law affecting charities
• community amateur sports clubs as a quasi-charitable form of voluntary organisation
• the emergence of social enterprise and the development of a specific legal form for non-charitable social enterprises
• the increased emphasis on the roles and responsibilities of charity trustees and of board members in other third sector organisations
• the governance failures which lie at the heart of most Charity Commission investigations.

It will conclude that governance and regulatory issues are fundamental to the field of voluntary sector research.

Reforming Gift Aid: Estimating the effects for donors and charities - Kimberley Scharf, Warwick University and Sarah Smith, University of Bristol

Individual donors currently give over £4 billion to charities through the Gift Aid scheme, enabling charities to reclaim tax relief at the basic rate of tax (worth 25 pence for every £1 donated out of net-of-tax income). Higher-rate taxpayers can also reclaim an additional, higher-rate rebate, worth a further 25 pence for every £1 donated out of net-of-tax income.

One of the aims of giving tax relief, such as Gift Aid, is to encourage individual donations to charity. But is the current regulatory framework for Gift Aid the best way of maximising the amount of money that charities receive?

We used a survey-based approach to look at how donors would respond to possible changes to the way tax relief was delivered through Gift Aid. Our findings indicate that the amount of money going to charities could increase if tax relief were all directed at the charity rather than being split between the charity and higher-rate taxpayers.

The reasons for this are quite simple:

First, most higher-rate taxpayers do not reclaim the rebate, although bigger donors typically do and higher-rate relief is reclaimed on 80% of donations made by higher-rate taxpayers.

Second, most donors do not adjust their donations out of net-of-tax income to take account of tax relief. So, charities benefit fully from tax relief directed at them, and not at all from tax relief directed at taxpayers.

These findings need qualifying in a number of ways. First, some charities could lose out if Gift Aid legislation were reformed to redirect the higher rate rebate to charities, even if the sector as a whole were to gain, since the rebate is important to some higher-rate donors. Secondly, there are a number of issues around how to implement a scheme to increase tax relief directed at charities that our research did not consider and that will be important in practice - not least how charities themselves respond to the change.

Full Paper: this presentation is based on a detailed research report prepared for HM Treasury and HM Revenue and Customs.  The full report entitled "Gift Aid donor research: Exploring options for reforming higher-rate relief" (same authors) is available at www.hm-treasury.gov.uk/d/gift_aid_reseach_report_091208.pdf.

The Impact of Counter-Terrorism Regulation on Charities and their Governance - Alison Dunn, Newcastle Law School, Newcastle University

This decade has seen a sharper regulatory focus upon anti-terrorism law and policy.  Controversial legal developments have included new criminal offences and wider state and police powers.  For their part, charities and other voluntary organisations have, to a degree, been caught in the regulatory cross fire; often becoming the unwitting victims of emergent policies framed for the sector but not developed from a sector perspective.

This paper will examine the development in anti-terrorism regulation from the Treasury and Home Office's proposals to protect charities from terrorist abuse to the implementation of the Charity Commission's anti-terrorism strategy.  The paper will also consider the themes evident in the new policies, the regulatory misunderstandings of the charity sector and the lack of proportionality in governance expectations placed upon charity trustees.

Governance Issues in Voluntary Organisations with Local-National Structures - Paul Robson, Age Concern and Chris Cornforth, Open University Business School

There are a variety of local-national (or peripheral-central) relationships and structures in use in voluntary organisations nationally and internationally. There are federations, confederations, networks, corporates and franchises (Oster, 1992; Young et al, 1996; Taylor and Lansley, 2000; Brown et al, 2007). The inter-relationships of the component parts of these structures have implications for the governance of both these groups of organisations as a whole and the individual components (Widmer and Houchin, 1999).

Achieving the proper governance of all the constituent parts of a federated charitable organisation can be more complex than in a single, unified organisation with one board of trustees. Each local autonomous charity will have a board of trustees with a duty to fulfil all the legally required functions including responsiveness to local stakeholders. However, local members of a federation also have a supra-governance structure, which will often make decisions on policy and practice that members are expected to comply with, such as various operating standards. This raises a series of interesting questions, for example: How do different levels of governance relate to each other and manage different interests? What is the impact on governance of having multiple stakeholders and accountabilities at each level? What do participants in these structures do to manage the complexity and inevitable tensions?

Sadly, research on the governance of these more complex organisations with group or federal structures has been relatively neglected (Cornforth, 2010). Interestingly though recent Charity Commission interest has resulted in contact with 60 charities with ‘group structures’ and drafting of new guidance to promote good governance.

This paper sets out an initial step to help begin fill this gap in research. It will report on a preliminary review of the relevant literature to identify key concepts and develop an agenda of issues and questions for future research. It will also identify the distinctive features of different local-national structures as a starting point for defining the parameters of future research.

References

Brown, L. D., Batliwala, S., Ebrahim, A. and Honan, J. (2007) ‘Governing International Advocacy NGOs and Networks: Architecture, Advocacy Performance and Accountability’, a paper presented at the ARNOVA Conference, 2008, Philadelphia, PA.

Cornforth, C. (2010) Challenges and Future Directions for Third Sector Governance Research, A paper to be presented at the 10th EURAM Conference, Rome, May, 2010.

Oster S. (1992) ‘Nonprofit organizations as franchise operations’ Nonprofit management and leadership, 2, 3.

Taylor M. and Lansley J. (2000) ‘Relating the central and the local, options for organizational structure’ Nonprofit management and leadership, 10, 4.

Widmer C. and Houchin S. (1999) ‘Governance of national federated organizations’ Aspen Institute.

Young D., Bania N. and Bailey D. (1996) ‘Structure and accountability, a study of national nonprofit associations’ Nonprofit management and leadership, 6, 4.

Governance as Dialogue: Working across divided communities - Christina Schwabenland, London Metropolitan University

This paper will describe some preliminary analysis of a pilot study of voluntary organisations working across religious and communal divides in three countries; India, Israel / Palestine and Ireland. The purpose of the study is to explore the ways in which voluntary organisations have constructed institutional responses to the challenges facing their societies and to identify any shared learning.

Tensions between communities of identity, whether the main focus is on a religious, cultural or ethnic affiliation, are a significant, and in many areas a growing element in contemporary societies and understanding of how to manage these tensions is limited. Voluntary organisations may represent a particularly fruitful focus for pursuing such understanding because of their expertise in developing forms of organising that embody their values.  Many of these organisations are founded out of a feeling that traditional forms of organising and political activity are insufficient or even detrimental to the ongoing need to promote dialogue and shared understanding across divided communities.

This paper will concentrate particularly on how the organisations studied in this pilot have responded to the governance issues that are presented by working in areas where conflicts in values are at the heart of their mission.  I will also draw on work by Cockburn (1998) and Payes (2005) to identify some of the underlying difficulties presented in working in areas where the organisations may find their own conceptualisation of governance issues to be in conflict with those of the political regimes of the nations in which they are based.

References

Cockburn, C. (1998) The Space Between Us: Negotiating Gender and National Identities in Conflict London: Zed Books.

Payes, S. (2005) Palestinian NGOs in Israel: The Politics of Civil Society London: Tauris Academic Studies.

Note: this paper will be a preliminary draft of a paper to be presented at ISTR in July 2010.

The Compact: Power and the embedding of the Voluntary Sector in changing concepts of public governance - Mike Hemmings & Rachel Casiday, Department of Voluntary Sector Studies, University of Wales, Lampeter

This paper discusses the Compact in relation to theories of power, governance and regulation and the embedding of the Voluntary Sector in changing concepts of public governance. Based on a wide range of documentary sources, an extensive literature review, and material drawn from the diverse experience of students in Voluntary Sector Studies and our voluntary sector engagements, we critically explore the Compact, the experience of manipulation and power and the closing of genuine and participative avenues for community control.

While the Compact has been praised for clarifying the responsibilities of government and the third sector, it can also be read as reinforcing government power by shaping voluntary organisations’ expectations and monitoring practices, thus exemplifying Lukes’s ideological power and Foucault’s subjectification.  This may be, in part, a response to the fragmentation of public service, reduced state control over policy implementation, and reduced leverage over agencies to implement state policy. 

In contrast to the stated aims of the Compact, New Public Management has focused on intra- rather than inter-organisational relationships, and emphasised management by target setting and results measurement which acts against relationships based on trust. This has resulted in the embedding of the voluntary sector in restrictive concepts of public governance and the expansion of regulatory and managerial control. Governance and regulation provide a double edged sword, offering opportunities and risks for the voluntary sector. We conclude by considering the ways that increasing regulatory pressures resulting from global economic crises, will erode the prospects for voluntary organisations’ autonomy and community power.