New charities that duplicate existing ones risk wasting donations.
This is the view of the outgoing chief executive of the Charity Commission, Sam Younger, who points out that there were 6,661 applications for new charities in the 2013/2014 financial year, a 16% rise on the previous year.
One example of common duplication, says Younger, is bereaved military families who set up a charity in memory of their loved ones, when it would be wiser to appreciate that wanting passionately to be doing something to help and the reality of effectively running a registered charity are very different. Better, he says, to pause and consider working with existing organisations.
There is, however, a view that smaller charities will have lower administration costs and that a greater percentage of the donations can therefore be available for the good cause. Some also feel that the larger charities will attract staff in it for the money, rather than love of the cause. On this basis more choice for donors could be desirable.
One recent example of a large organisation with a very small charitable impact was the Cup Trust, set up to “help young children and adults” and given charitable status by the Charity Commission in 2009. This trust was controlled by one corporate trustee based in the British Virgin Islands and passionately donated £55,000 of the £176 million (0.03%) it had raised in its first two years to its stated cause. It then came out in 2013 that it had passionately allowed donors to avoid paying £46 million in tax through gift aid incentives.