Registered charities may not survive unless they behave with greater selflessness and stop the slide in public trust, Tina Stowell, chair of the Charity Commission is warning.

Lady Stowell, a former Conservative minister, is to set out a tougher stance over the regulation of the £74bn-a-year sector after a string of scandals, including the collapse of Kids Company in 2015, and the sexual exploitation in Haiti by a senior Oxfam worker, which emerged in 2018.

The UK’s 168,000 registered charities face censure unless they show they are “a living example of charitable purpose”, she will say on Thursday.

In a speech that also attempts to draw a line under criticism of the regulator’s own effectiveness, Stowell will warn that the “concept of charity” is under threat.

She will single out aggressive fundraising practices, the exploitation of vulnerable people, and single-minded pursuit of organisational growth at the expense of charitable objectives, as examples of bad behaviour that should cease.

The speech is likely to be seen in part as an opening salvo in a negotiation for greater government funding following several years of cuts which have weakened the commission.

Stowell will not mention cases by name but will tell charity bosses: “The public has seen questionable behaviour and concluded – you are not who you appear to be.” She will warn that charities no longer enjoy a monopoly on people’s altruistic impulses, with crowdfunding, peer-to-peer apps and social enterprises offering competition.

Last year, the regulator issued a damning report into the Presidents’ Club charity which organised men-only dinners at which staff reported sexual assault.

The number of serious incidents reported to the regulator increased 29% last year. Close to half of people polled in a recent survey for the regulator said their level of trust in charities had fallen in 2018.

Lady Stowell, Charity Commission chair. Photograph: Ben Quinton/The Guardian

“A charity, to inspire trust, must be more than an organisation with laudable aims,” Stowell will say. “It must be a living example of charitable purpose, charitable attitude and charitable behaviour.”

Peter Kellner, chair of the National Council of Voluntary Organisations, said charities should support the commission’s approach. “The great majority that maintain those standards feel betrayed when a small minority fall short. Levels of trust have seen a modest decline. It needs to be reversed. To help achieve this NCVO will soon publish a code of ethics for the charity sector … NCVO accepts the challenge to help charities do more, and do it better.”

The commission is not calling for a change in the law governing charities but wants to reinforce the existing rules and be more vocal about wrongdoing. It is expected to demand an increase in funding from ministers following years of cuts.

Stowell will say charities should avoid extravagance, be transparent and show a “relentless focus on the welfare of your beneficiaries, rather than the interests of your own organisation”. She will add: “Being a registered charity will need to amount to more than it does today if that status is to survive let alone thrive.”

She will promise to issue punishments more quickly and to speak out against conduct that does not meet with what the Charity Commission believes the public expects.

Political thinktanks which are registered as charities remain controversial. The rightwing Legatum Institute, which has the charitable aim of advancing education for the public benefit “crossed a clear line” with its report, Brexit Inflection Point, last November which failed to meet required standards of balance and neutrality.

The regulator has also opened a regulatory compliance case into the Institute of Economic Affairs, following an undercover investigation showing it told potential donors it was in the “Brexit influencing game”.

Only five years ago the regulator was branded ineffective and “too passive” by the National Audit Office, although the office said it had since improved.

Stowell’s appointment in April was opposed by MPs who suggested she lacked experience of charities so her appointment could be seen as political.

Damian Collins, chair of the Commons culture, media and sport select committee, said they were “disappointed to receive answers that were often lacking in detail or relevance”.



