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Margaret Hodge says alarm bells should have rung over Cup Trust, run by creator of Jimmy Carr's tax scheme

MPs have attacked the charity watchdog for its "astounding" failure to close down a fake charity that gave just 3p out every £100 of donations to good causes.

Margaret Hodge, chair of the influential public accounts committee (PAC), said that if the Charity Commission had "only bothered to pick up the phone" to the tax authorities it would have discovered that the Cup Trust charity was a front for a multimillion-pound tax-avoidance scheme.

The Cup Trust, the claimed objective of which was to "improve the lives of young children and adults", donated just £55,000 of its "staggering" £176m income to charitable causes. Despite its scant donations, the trust used a complex web of transactions to seek £46m in gift aid, and its "donors" claimed £55m in charitable-giving tax relief.

Hodge said it should have been obvious to the commission that the trust, which was founded with only one trustee, in the Caribbean, had been "set up as a tax-avoidance scheme by people known to be in the business of tax avoidance".

The Cup Trust was controlled by Matthew Jenner, the boss of NT Advisors, who Hodge said was "already renowned in HMRC" for setting up tax-avoidance schemes.

Other schemes set up by NT Advisors – the initials stand for "no tax" – include those used by the comedian Jimmy Carr and the TV presenter Chris Moyles. HMRC has won three successive tax-avoidance cases against the Jersey-based NT Advisors, including one case last week.

"It is so astounding," Hodge said. "It stares you in the face. Yet it didn't appear to raise any questions [with the commission] before it was registered. If only someone had bothered to pick up the phone and ask them [HMRC] about NT Advisors. Elementary checks with HMRC could have alerted the commission to the true purpose of the trust and its trustee … Its purpose was to avoid tax."

Hodge said it was remarkable that HMRC had not queried why the Cup Trust, which collected more annual "donations" than the RSPB, the British Heart Foundation or the Salvation Army, had just one trustee: Mountstar, based in the British Virgin Islands. The directors of Mountstar are also the directors of NT Advisors. "Alarm bells should have rung," she said.

A public accounts committee report said the trust operated by buying £176m of government bonds, known as gilts, which it sold on to "donors" for only £17,000.

The donors, whom Hodge described as "Jimmy Carr types", sold the gilts and donated the proceeds – which were roughly the same as the purchase price – to the charity. In doing so, they were able to try to claim £55m in charitable-giving tax relief.

The trust went on to claim £46m in gift aid from HMRC. The tax authorities have not paid the claim, vowing to stop "tax dodgers" from exploiting charitable tax relief.

If the scheme had worked, Jenner and his partner, Anthony Mehigan, could have collected 5-10% of the tax saved for their wealthy clients. Tax experts said the pair may have already collected some fees in advance.

Hodge described the exploitation of charitable status by tax avoiders as "repugnant" but warned that there were "devils in this world" who would continue to exploit well-intentioned government tax-relief measures.

The PAC report said it was "unacceptable" that the Cup Trust had ever been allowed to register as a charity, and it was shocking that the commission had failed to close it down when it investigated it, between 2010 and 2012.

"In the last 25 years, the committee and the National Audit Office have repeatedly found severe shortcomings in the commission's performance, particularly in relation to investigation and enforcement," the report said.

In the last four years, the commission has removed only one trustee, after a judge ruled that he had perjured himself, and appointed only five interim managers to run suspect charities.

Hodge said the commission appeared to have "simply failed" to implement the PAC's previous recommendations, and said her committee would now "undertake yet another" investigation into whether the regulator for charities in England and Wales is fit for purpose.

The commission said it had opened a new statutory inquiry into the Cup Trust, but not until after its chairman was hauled before the PAC, in March. It has also appointed an interim manager to run the charity, in a move that Mountstar has challenged.

A spokeswoman said the commission was "discussing better ways to share information and work together to tackle abuse of charity. We are targeting our resources on the areas of highest risk, with a particular emphasis on tackling fraud, terrorist abuse and risks to vulnerable beneficiaries."

Hodge warned that the commission's failure to act against the Cup Trust was "disastrous" for the reputation of the commission and for the charity sector in general. She also raised concern that the Cup Trust scandal may "just be the tip of the iceberg". HMRC investigates 300 incidents of fraud relating to charities every year.

• Tax and spending
• Charitable giving
• Tax
• Consumer affairs
• Jimmy Carr
• Charities
• Voluntary sector

Rupert Neate
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A register of UK lobbyists would help – but the abuse of MPs' early day motions by vested interests should also stop

Flick through the list of early day motions and parliamentary questions and the extent of the influence of lobbyists becomes apparent. They are not all sinister; some are clearly drafted by worthy medical or environmental charities, for example, with no suggestion of financial gain for the member who has lent his or her name. The question is when should those meeting with MPs on behalf of not-for-profit organisations, pressure groups or charities also be classed as lobbyists? It is absolutely core to MPs' work to meet with and to represent their constituents but should that be separately declared if they happen to work for a multinational business? The point has also been made that a statutory register of lobbyists would have prevented the undercover operations which exposed the latest alleged wrongdoings.

The apparent lack of integrity of a small minority again undermines the faith in parliamentary democracy but should we be so disheartened? In many countries this kind of behaviour is completely routine, the rewards far higher and there is no press freedom to hold the corrupt to account. In Britain it is exposed and vilified. But for how much longer? The powerful have a vested interest in making it harder to expose the ugly face of lobbying, which is why it is essential that the state should have no hand in regulating the press.

A register of paid lobbyists should be kept but it must also include the financial interests of those who provide advice to political parties, not just to government. But such a register would not solve the problem of the abuse of early day motions and parliamentary questions by vested interests. We need a clear process whereby the public can see who has helped to write these questions. This need not name individual constituents but could and should name any pressure group, union, business or even charity that asks for a question or EDM to be tabled or which contributes to its drafting.

Many EDMs come directly from MPs themselves; there are some truly toe-curling examples of MPs sucking up to celebrities, stating the obvious or just trying to make it into their local papers. The trouble is that these petitions, which only a dwindling band of MPs will sign, are very expensive to administer. We should also be outraged that the latest scandal to hit parliament was paid for by you, the taxpayer. EDMs need a serious overhaul, along with the lobbyists who abuse them to justify their own jobs at public expense.

• In the interests of transparency, Sarah Wollaston has asked us to point out that she is married to an NHS psychiatrist who provides advice on psychiatry on behalf of the Royal College of Psychiatrists to all political parties

• Lobbying
• Charities
• Voluntary sector

Sarah Wollaston
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Following the news that 92% of charities want to start trading, here are some ideas for voluntary organisations to consider when embracing social enterprise

On reading this week that 92% of charities want to start trading, my immediate response was to argue that where there may well be a high level of will, the way still poses some problems. This response is based partly on experience from a programme of work I have just finished leading at the National Council for Voluntary Youth Services (NCVYS) on behalf of the Catalyst consortium. Working with a variety of voluntary sector organisations to help them start and scale up their enterprise activities, we found many lacked the skills as well as the capital to even start trading. In addition, for those looking to their traditional commissioners to buy their services, there was still a huge knowledge and skills deficit, putting market expansion on a precarious and bumpy path.

On both sides however, the biggest hurdle was overwhelmingly the culture shift needed to get both public and voluntary sectors thinking that is really is OK to approach the "business activities" concept – well, just like a business.

So if that sounds familiar, you may want to read on for my five top tips on how to give your social enterprise startup a fighting chance.

1. Do what you know

Success is much more likely if you trade on existing skills rather than trying something completely new. There is no point having a great idea if you are not able to action it. Chances are that you will have to learn new business skills as it is; if you add learning to juggle fireballs to the mix, it will be too much. It is highly likely that you are already really good at something, so be realistic.

2. Identify who you will trade with

Take some time to identify what you can trade, how you trade it and to whom, before you even begin to look at what social issue needs addressing. You are much more likely to be successful, or at the very least self-sustaining, if you think about the business case first. Again, be realistic: do you have the evidence that there is a market for your products and/or services and are you confident you will be able to reach it? Have you really addressed why your potential customers will buy from you and not someone else?

3. How will you measure impact?

One of your answers to that question could feasibly be: your impact. You will certainly need to address the social issue at some point. This in addition to the fact that if you need a financial kick-start (highly likely), then you will need some facts and figures as well as a good story. Look at something like the Young Foundation's publcaition Noticing the Change – A Framework of Outcomes for Young People in Practice and notice how important the theory of change is to the process of demonstrating impact. You will need to build this process into the very heart of your business if you want it to be truly useful to society (and it will make collating those facts and figures a lot easier).

4. Business modelling

The Young Foundation again do a great version of the business model canvas for social entrepreneurs, but if you are still in the idea phase and not ready for their Accelerator programme yet, you would be very wise to make a start either with the Business Model Generation book or the even less expensive related website. It is an absolute must for anyone wanting to get that idea off the ground, enabling you to focus in all the right places thanks to its practical exercises for the impatient, and varied examples of success.

5. Leave legal structure until last

Forget about legal structure until you have been through that modelling process and have considered all the possibilities properly. You may even need to pilot your idea before you can put this in stone, as the development, the actual "doing", will determine what works best. When you are almost clear, invest in some independent legal and financial advice; it is worth remembering though, that you can always work a social mission into your constitution, whatever the structure.

This is not an exhaustive list and does not guarantee success. However, experience in both the commercial and social sectors, has led me to believe wholeheartedly, that "business" and "social" do not have to be mutually exclusive.

Beth Parker is a former director of service development at the National Council for Voluntary Youth Services and has since founded a collective of social initiatives and businesses under the banner Bonsai Bison

This content is brought to you by Guardian Professional. To join the Guardian Social Enterprise Network, click here.

• Social enterprise blog
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Internet giant pledged only £20,000 to Internet Watch Foundation last year, despite multibillion-dollar turnover

Google donated little more than £20,000 last year to the charity responsible for policing child abuse images online – the equivalent of 90 seconds' profit for the internet firm.

The search giant was one of a number of firms, including Facebook and Microsoft, that pledged relatively small amounts to the Internet Watch Foundation (IWF) in 2012, despite their multibillion-dollar turnovers.

Facebook made a baseline donation of around £10,000 and Microsoft's Bing search engine gave about £20,000, according to the IWF's own records.

Keith Vaz, the chairman of the home affairs select committee, said internet companies needed to ensure the IWF was properly resourced to tackle urgently the proliferation of child abuse images online following the murder of five-year-old April Jones.

"I am shocked that, despite the importance they have said they place on its role in keeping our children safe, they have donated such paltry amounts to it, which for them represent a drop in the ocean. As it stands, it is difficult to take their commitment to protecting our children seriously," Vaz said.

Google, Facebook and Microsoft insisted they had a strong relationship with the IWF and other child protection bodies. Facebook sponsored an event hosted by the IWF last year and made donations to agencies in other countries, it said.

Sir Richard Tilt, the IWF's chair of the board of trustees, said it would welcome more money from members. "There's certainly scope for increasing our number of analysts and we know if we had more analysts we could do better. If we could get more money that would enable us to do more," he said.

The scrutiny came after Mark Bridger was jailed for life for the sexually-motivated murder of April Jones, having earlier looked at child abuse images online. The biggest web companies – apart from Twitter and Amazon – are members of the IWF and block about 1,000 illegal sites at any one time.

But the IWF's five-strong team of analysts has become overwhelmed as reports of child abuse sites soared by 40% compared with last year, to 40,000, or 150 a day. The body is pushing companies to introduce new measures in the next 12 months including a "splash page", which would warn visitors to websites showing unlawful abuse images.

Tilt, a former director of the prison service, believes the setting will be a strong deterrent and potentially prevent further attacks. "Most of us who work in this area feel it will make a difference. There probably is a link that [online abuse images] make people more likely to commit dreadful offences, but the trouble is there isn't any clear evidence," he said.

Deborah Denis of the Lucy Faithful Foundation, a children's charity dedicated to preventing child sexual abuse, called on search engines to become more involved. But she said more stringent measures for those caught with indecent images would be "unacceptable and unrealistic", and instead there should be better sex and relationship education in schools.

Denis said: "If we attempted to lock up everybody who looked at indecent images of children, we simply wouldn't have enough space in prison. The police already do excellent work in this area, but it is a problem that is just too big for them to tackle alone."

Google was singled out for criticism by Liz Longhurst, whose daughter Jane was murdered by extreme pornography user Graham Coutts in 2003, prompting her to campaign for internet firms to ban such images. She said internet firms must "get their act together" and start tackling violent online imagery. "What annoys me immensely is that Google won't block these sites. They say we've got to have freedom. All I ask them is where was my daughter's freedom – tell me that."

There have been calls for Google to enforce its "safe search" option as the default setting, which would block pornographic material in search results. However, insiders insisted the move would be ineffectual as the stricter setting operates as an algorithm for legal content – and child abuse imagery is illegal, so is covered by extra blocking measures.

Scott Rubin, Google's director of communications outside America, said the company has a "zero-tolerance approach" on child abuse images and added: "The SafeSearch filter, which is designed to prevent sexually explicit material of all kinds from showing up in your search results, should not be conflated or confused with our dedication to keeping illegal abuse imagery out of our products. We don't rely simply on filtering technology to block child abuse images; we go beyond that.

"We are very proactive and work with the right people, including the National Centre for Missing and Exploited Children in the US and the IWF, to keep child abuse content off all of our sites. Any implication we aren't doing anything or we refuse to be part of removing this material is wrong."

A spokeswoman for Microsoft said: ""When we are made aware of any illegal content, we remove it from our services, including our search engine and report it to the police."

Facebook said it has technology that scans for child exploitative content and automatically flags images to law enforcement. It added: "Facebook works closely with CEOP [the Child Exploitation and Online Protection centre] in the UK to help bring offenders to justice."

• Google
• Charitable giving
• Internet
• Pornography
• Child protection
• Children
• Charities
• Voluntary sector
• ISPs

Josh HallidayAlexandra Topping
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When looking for people to fill the position, charity boards need to be clear about the different roles they want them to fulfil

The contribution made by people who are chairs of boards is increasingly being appreciated within the voluntary sector. Chairs not only keep meetings of their boards to task but are an essential part of the "top team". Chairs can also assist in projecting a positive face of the organisation to partners, commissioners and other key stakeholders. It is therefore no wonder that some third sector organisations invest considerable resources in finding their next chair. Here are some suggestions on how boards should approach the process, based on our experience of helping charities to find new chairs.

Apply a structured approach

Based on our experience of supporting trustees in selecting chairs, it seems evident that boards benefit from being active and applying a more structured approach to one of their most important tasks. Our experience is that one size does not fit all in the selection of a new chair but neither is every exercise to recruit that chair totally distinct. It is possible for voluntary sector organisations to define key attributes for the chair with confidence and in the light of changing needs. It does require an investment of time and thought by the board but as a structured process it offers the prospect of not having to settle for second best or finding that appearance did not match the reality.

Be clear about the organisation's characteristics

Different organisations do share characteristics and it can be helpful to identify those that have considerable impact on the role of the chair. These characteristics may result in different time demands on the chair, a factor that will determine the level of discretionary energies of the new chair. Our list includes:

• size of organisation (eg under £1m; over £10m)

• stage of organisational life cycle (eg startup, mature)

• nature of activity (eg policy and campaigns, service delivery)

• national, international, regional or local

• dominant income sources (eg contracting, donations)

• size of board – larger boards represent a different proposition to chair than smaller boards

Be clear about the organisation's needs

Candidates may receive a wide variety of organisational plans, policies and procedures and visit the organisation's website but how far will this show them where their energies need to be directed? These documents can be highly informative about the priorities of the chief executive but often fail to indicate where their energies will primarily be needed and what candidates will be doing if appointed. It is the board's responsibility to articulate the nature of the role and the behaviours expected of the chair, particularly since characteristics of many third sector organisations mean that there is rarely a simple read across from one to another or indeed from private to third sector boards.

Be clear about the role you want the chair to play

Having identified the organisational characteristics, it is important for trustees to clarify the focused roles they require of their chair. Many third sector organisations now have role descriptors for chairs. They tend to be highly generic in character but accomplish two things – setting minimal standards for governance, and identifying the boundaries within which the chair will operate. But is this enough?

A chair's roles may include:

• partner – with the chief executive (and senior staff) at the heart of the 'top team'

• team builder – focused on succession planning, recruiting and developing board members; handling conflict within the board and mediating where necessary

• networker – making the connections and influencing at a senior level in partner and other stakeholder organisations

• campaigner – championing and advocating for the needs and views of service users/members

• organisational – facilitating and sustaining board processes, including leading on improving on governance practice

• strategist – enabling the trustees and the executive to develop, shape or refresh its strategy

Trustees may believe that all these roles are essential

However, this view is unlikely to provide a accurate guide to potential candidates for chair. Equally significantly, it may understate the current governance work of the board and fail to identify where its efforts need to be complemented.

Once agreed, the organisational characteristics and the roles will shape the knowledge, skills and behaviours needed for the role of chair. A person specification for chair can be designed to facilitate governance and organisational performance rather than just meet legal and regulatory requirements. This specification can serve as the basis of more helpful interview questions for candidates.

Select for behaviours, not just experience

We stress the importance of behaviours as these can do so much to establish the effectiveness of the board as a team. Since individual board members may have different expectations of how a new chair should behave, these should be explored and consensus reached before recruitment begins. The ambition should be to build an interdependence that is creative and consistent not just for good times but also gives stability through more testing periods.

The role of the chief executive

It is neither appropriate nor fair for chief executives to lead the process of selecting the individual who is nearest to being their line manager. Chief executives need to be involved in the process but primarily to support and facilitate the board in making its own selection. We recognise that there is a fine line between the chief executive supporting and being over involved. This is a judgement that healthy boards need to make repeatedly in discussion among themselves and with the chief executive.

Hilary Barnard and Ruth Lesirge are the founders of HBRL Consulting.

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Engaging with supporters through online channels can augment the work of charities, but there is no magic formula

"It's horses for courses. It depends on what kind of charity you are and what your tone of voice is". This is how Vicky Browning, director of CharityComms, describes her organisation's philosophy on social media. "In general though, social media is a pretty chatty environment – it kind of says it in the name: it's social. Being open, honest, responsive and human is generally always going to be a good approach."

Social media has been around in one form or another for the best part of a decade, but seven years on from the birth of Twitter, and almost 10 years on from that of Facebook, it remains an ubiquitous but misunderstood force of communications. So where exactly does the value lie and why should a charity "do social media? Browning says: "[It] is an amazing opportunity for charities to have a conversation with their audiences. [To] talk to supporters, engage with donors, offer advice, information or sympathy to beneficiaries, influence journalists or decision-makers."

Susie Barber, digital communications manager with Oxfam, agrees. It is this capacity to connect that is the strength of social media, she says. "The main strength is bridging that gap between the supporters and the beneficiaries that work in the field." In general, Oxfam also advocates the "chatty" approach. "I think we do it on a case-by-case basis … but we prefer to play it out in public because if you don't do so it looks like you're trying to hide something. For the most part we want to be as transparent as possible."

Barber also says the ability to amplify voice and message is significant. "Recently we did a takeover on Twitter with a refugee in Syria, in which we did a whole day of tweets from him talking about his experiences." Oxfam estimates the initiative created a potential reach of 8 million people. "Social media can make this kind of thing so much more impactful," says Barber.

The ability to be more impactful is not limited to this kind of engagement alone. As noted already, social media offers the chance to connect with a variety of charitable stakeholders, from donors to decision-makers to journalists. Social media has been particularly disruptive of the last of these, with ever increasing evidence of its centrality to both the sourcing of a story and the dynamic of its dissemination.

Despite this, it still forms only a complementary part of charities' dealings with the media overall, says Browning. "Social media isn't replacing other channels of communication. Charities' websites, email and – dare I say it, press releases – are still effective. It's another channel that offers different opportunities. Susie Barber agrees. "Our Twitter account was set up for journalists to get up-to-the-minute news, but we still support this with emails, blogs and press releases."

Employing a strategic approach to social media is just as important as establishing a presence, particularly in the often resource constrained charity sector. This means knowing which platforms are important and which are not. "It goes back to communications fundamentals – audience, channel, message", says Browning. "Twitter is good for engaging journalists, celebrities or politicians. Facebook can be great for building communities and enabling supporters or beneficiaries to connect with and help each other. Pinterest or YouTube are good [for] sharing compelling visual stories which can add impact to your messages". Oxfam is present across nine social channels but "about 95% of our resources concentrate on our 'top four'", says Barber. "Those are Facebook, Twitter, Google+ and YouTube."

As with most technologies, social media can be a double-edged sword, and it is not without its challenges. Buy-in from senior management or trustees is one potential problem, says Browning. "Often they are very risk averse, and may be nervous of the power of social media, of the value of these channels."

The integration of social media across an organisation can also be an issue. "Ideally, social media should be a horizontal layer touching every part of it, from supporter acquisition to service delivery". Oxfam is in the process of just such an initiative, having recently recruited a social media manager and signed off on a cross-divisional social media strategy for the organisation.

In general, successful use of social media requires an understanding of its strengths, while acknowledging both its limitations and the need to invest sufficient time and effort. "It's just one of many communications channels. It's not the answer to everything and charities need to make sure they make the most of their owned channels, such as websites and supporter databases", says Browning. "And if they are using social media, they need to make sure they invest enough in it to make the exercise worthwhile".

Top five tips for charities' use of social media

1. Know what you're using it for. The lines between them are blurring, but different social channels are optimised for different things. Be clear on why your organisation is using each one and engage strategically.

2. Be social – social media is just that. Use it to broadcast, but don't forget to use it to listen and discuss as well. And while it's good to be prompt, it's better to be right, so always think before you tweet.

3. Be engaging. What exactly constitutes engaging content is debatable but in a media saturated world, it needs to stand out. Be careful to ensure the content is relevant to your organisation's activities so that you can both speak to it with authority and build a reputation as a credible source of that content.

4. Measure. As with traditional media and investment of any kind, measurement of social media activity is crucial. The raw numbers can never tell the whole story, but a grasp of the basics – retweets, shares or page impressions generated by them – is vital.

5. Invest fully. Social media can be cost-effective, but it's not free. It requires time and effort and that costs skilled staff and money. Be prepared to invest fully in this way to get the most out of it.

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Young volunteers doing clean-up work for National Trust have to pay for their board and lodging

Cheap labour to clean up the environment, and the work of amateurs dedicated to the same cause may have been firmly condemned by a working party report only last week but the National Trust had no lack of volunteer workers at the weekend.

The trust attracts increasing numbers of school-leavers and undergraduates because the jobs are worthwhile and fun. So a group were out on the Salcombe cliffs during the holiday, improving and sign-posting 12 miles of the South Devon Coastal Footpath. At Hardwick Hall, Derbyshire, another group, or acorn camp, as the trust calls its growing effort in this sphere, were starting work on a youth centre, to be linked to a big new country park.

The volunteers pay £3.50 a week for their board and lodging, which varies a good deal—a youth hostel near Salcombe, a large empty flat near the Elizabethan Hardwick Hall.

At the end of this week another acorn camp opens up at Longshaw, also in Derbyshire, to continue the control of bracken which has extended over the open moorland and so improve the quality of grazing for local sheep.

This group will also carry out jobs on culverts and stone walls and stay in a cottage 1,250ft up on the hills, with a large room for the men, a smaller one for the girls, oil lighting and," Elsan."

"This is a marvellous situation with somewhat Spartan conditions and should appeal to candidates for the Duke of Edinburgh's award from the Midlands and the North," this year's brochure for countryside cleaning blandly states.

Later on this summer, more groups will clear greenhouses and walled gardens in Clumber Park, Nottinghamshire, (sleeping in outbuildings and potting sheds or the village), maintain the forest in Pumpsaint, Carmarthenshire (beds in the farm and snacks from cottages on the estate as well as personal cooking), remove hawthorns from Hudswell Woods, Yorkshire (accommodation in the local field study centre), cut rhododendrons and make a footpath in Claremont Woods, Surrey (school classrooms this time) and complete the reclamation of two ornamental lakes at Sissinghurst Castle, Kent (stately rooms inside).

There will be 32 such efforts this year, compared with 25 in 1971 and one in 167, when the exercise began under Mr Eric Crofts, then a schoolmaster, now projects officer of the National Trust. The main problem at the moment, because of the rapid growth, is to get enough youth leaders to run the camps. Another is to ensure the jobs are patently worth while — for example, not to get young people clearing the undergrowth in a place where machines would be quicker and better.

More than 600 volunteers from schools and universities, as well as young trainees in jobs, are expected to pay to work this summer.

In fact, their £3.50 covers food only. They are asked to take sleeping bags, the usual mug, knife, fork, spoon, plate and bowl, strong gloves, plastic clothes bags, torch, and a coat hanger. They are asked not to bring a transistor radio.

The list reads a bit like the kit advice for a straw hut holiday with the Club Méditerranée. And bookings are good, full up for girls; not quite for the boys or young men.

• Voluntary sector
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Oxfam and Church Action Poverty call for parliamentary inquiry saying cuts and Jobcentre errors are causing destitution

Massive cuts to social safety nets have led to "destitution, hardship and hunger on a large scale" in Britain, with more than half a million people now forced to rely on food banks for sustenance, key poverty charities have warned in a report.

Welfare changes and mistakes by Jobcentre Plus staff are causing delays in benefits and errors or sanctions, which push vulnerable people into precarious situations, the report from Church Action on Poverty and Oxfam warns. The charities want an urgent parliamentary inquiry.

"The shocking reality is that hundreds of thousands of people in the UK are turning to food aid," said Mark Goldring, Oxfam's chief executive. "Cuts to social safety nets have gone too far, leading to destitution, hardship and hunger on a large scale. It is unacceptable that this is happening in the seventh wealthiest nation on the planet."

The report, Walking the Breadline, is backed by the Trussell Trust, the UK's biggest provider of food banks. It blames the increasing pressure on food banks on far-reaching changes to the benefits system, as well as on unemployment, increased underemployment, low and falling incomes and rising food and fuel prices.

Changes to the benefit system are the most common reasons for people using food banks, including delays in payments, sanctions, sickness benefit reassessments and changes to crisis loan eligibility rules, according to the report.

It outlines the case of Kay, a single parent in her 30s who was required by her Jobcentre Plus adviser to search for six jobs each fortnight. When the job club she attended lost internet connectivity one week, she only managed to inquire about one vacancy, looking at five more the following week.

At her next visit to the Jobcentre, her adviser said her search was "not good enough" because her six job searches were not spread evenly. She was sanctioned a week's money of £71 and forced to rely on her family for financial support.

The energy secretary, Ed Davey, told MPs this month it was "completely wrong to suggest there is some sort of statistical link between the benefit reforms we're making and the provision of food banks".

But the report concludes: "There is clear evidence that the benefit sanctions regime has gone too far and is leading to destitution, hardship and hunger on a large scale. There is a real risk that the benefit cuts and the introduction of universal credit … will lead to even larger numbers being forced to turn to food banks. Food banks may not have the capacity to cope with the increased level of demand."

The Guardian reported this week that many food banks were struggling to meet the explosion in demand for food parcels.

The report says that keeping the national minimum wage and benefit levels in line with inflation will allow families "to live with dignity and … afford to feed and clothe themselves and stay warm".

Niall Cooper, chief executive of Church Action on Poverty and the report's lead author, said: "The safety net that was there to protect people is being eroded to such an extent that we are seeing a rise in hunger. Food banks are not designed to, and should not, replace the normal safety net provided by the state in the form of welfare support."

The report calls for the Commons work and pensions select committee to conduct an urgent inquiry into the relationship between benefit delay, error or sanctions, welfare reform changes and the growth of food poverty.

It also urges the Department for Work and Pensions to publish data on the number of people sanctioned, and on referrals from Jobcentre staff to local food banks.

Imran Hussain, head of policy for Child Poverty Action Group, said: "It's a national scandal that half a million British people are now having to turn to food aid. It's a problem that has quickly escalated and shows that something has gone badly wrong with the safety net that is supposed to help families in need.

"It is particularly concerning that more and more of the families seeking food aid are actually in work but on poverty pay and facing cuts to their tax credits."

Mary Creagh, Labour's shadow environment secretary, called the figures "shocking" and urged the government to change tack.

"The UK is the seventh richest country in the world, yet we face a growing epidemic of hidden hunger, with people increasingly unable to meet their family's basic needs," she said.

A DWP spokeswoman said the majority of benefits were processed on time every day. She said: "We welcome the contribution voluntary organisations and food banks, including the Trussell Trust, play in supporting local communities, beyond the safety net provided by government.

"That is why Jobcentre Plus – for the first time – is now referring people to their services. Our welfare reforms will improve the lives of some of the poorest families in our communities, with the universal credit simplifying the complex myriad of benefits and making three million households better off."

• Food banks
• Public sector cuts
• Charities
• Poverty
• Benefits
• Public services policy
• Voluntary sector

Alexandra Topping
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Impact measurement has the potential to bring about improved understanding between funders and beneficiaries

Impact investing is, according to Sir Ronald Cohen, "the new venture capital". The art of investing simultaneously for financial and social return, as Cohen recently blogged, could radically alter how social issues are tackled. From social impact bonds to social finance and payment by results, a focus on outcomes is changing the way programmes are supported and delivered.

While organisations' interest in impact practice is more often than not led by funder requirements rather than by internal drivers, a groundswell within the sector is hoping to alter how grant-makers and investors treat the issue. This will also have a knock-on effect on how their beneficiaries view the practice.

The Association of Charitable Foundations (ACF), which supports grant-making trusts and foundations, leads NPC's Inspiring Impact work with funders. The programme information stresses that "funders, commissioners and investors can provide incentives to grantees and investees to measure their impact by embedding a focus on impact in funding decisions, and building in monitoring and evaluation costs to their funding".

The programme is working towards creating a consistent understanding of impact among funders and social investors. James Magowan, who leads ACF's work on impact and funders, says: "There is momentum now… never before has there been this coalition of interest in this area, and the critical thing about that is the collaborative approach. There is a common currency in this, a common language being spoken, so funders aren't thinking of impact in one way and beneficiaries thinking in another way."

On a practical level, as the Inspiring Impact programme sets out, funders, commissioners and investors can provide those they fund with incentives to measure impact, building in monitoring and evaluation costs to funding. However, Magowan adds that the learning process involved in this work is also important: "There may be a tendency in monitoring to refer to the distance travelled, which is interesting, but [you will be less successful] if you do not know how or why you are doing it this way."

Another issue is that a funder must evaluate the impact not only in terms of the individual charities it supports, but in relation to the total impact the funder itself creates. A recent ACF report, For Good And Not For Keeps, suggests that trustees should consider the net social impact of their spending and investment policies.

Viewing the practice as much broader than just how individual beneficiaries are awarded money is one of the first steps for funders or investors embarking on or developing an impact-led approach to grant-making. Magowan adds: "It is the whole of the organisation's impact – not just how it spends money in relation to grant." He adds that the basic principles underpinning good impact practice for funders include a recognition that everyone can contribute to impact practice and a proportional, flexible and transparent approach.

As the impact playing field is being levelled for funders, there should be a more coherent vision of how the practice can be used in decision-making. Jenni Inglis, director of the SROI Network, says that while, generally, funders' use of impact obviously means looking at applicants' outcomes to decide how much to allocate where, more specific questions should also be asked: "What are the problems and where are the innovations needed? If you expect to get your money back, you might want an organisation that creates more value... understanding the difference that your solution makes should be driving the financial return as well."

What of the differing attitudes to impact between funders and funder-investors? Put bluntly, says Inglis, "Funders give money and investors want it back – their attitudes to impact may be very different… there are a huge variety of approaches and thinking within funders, but [an organisation] that says 'We are here just to give money away and want to have a nice warm feeling' rather than 'What we are doing is good, it is making a difference,' does mean they are less critical and less inclined to look for unintended consequences."

However, as Inglis adds, there are different sorts of funders. Venture philanthropists, for example, are funders but they take a more critical approach to impact. "As soon as you look to a return, it sharpens your interest in impact practice; a financial return should flow from making a good impact."

As the NPC report Making an Impact stresses, funders can do more to not only articulate why measurement is important but provide resources to help charities improve how they measure. This would help to buck the trend of charities measuring impact because it is a funding requirement rather than to improve their own delivery. Magowan says there should be positive engagement between funder and beneficiary in the focus on impact: "The funder should not impose the framework, but help design it."

Impact measurement has the potential to change relationships between funders and beneficiaries as well as make organisations more sustainable and resilient. A focus on impact, as Inglis and Magowan argue, should be part of a funder and charity's DNA, not simply an add-on or just a reporting requirement. As Magowan adds: "Investing in impact practice is about investing in the capacity of organisations."

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• Impact and effectiveness
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Saba Salman
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As food banks struggle to cope with rising demand, they - and politicians - could learn valuable lessons from volunteers in Canada about the precarious nature of charity food provision.

Curiously, this rather wonderful protest song (above) is not sung by impatient young Marxists, but wise old mainstays of the community in Sudbury, Ontario. The "big society", if you like. For years they have been volunteers at the local food banks. And they've had enough.

In fact, though they express themselves politely, they are furious. Alf Judd, the director of operations at Georgina Community Food Pantry, explained their frustration:

I began volunteering with the food bank in 1990 thinking I would do this for a couple of years; here I am 22 years later.

The Sudbury volunteers' clever adaptation of the Paul Simon song 50 Ways To Leave Your Lover, is part of a campaign - Freedom 90 - to make obsolete the charity food banks they themselves helped to create and sustain. Many are in their sixties and seventies; their explicit aim is to "retire" from food crisis volunteering before they reach the age of 90.

Its an unexpected campaign - older people, prosperous pillars of civil society, not obvious radicals - that has prompted the kind of bemused, if slightly patronising, press write-up that asks:

What if the little old ladies who run the neighborhood church food pantry rebelled?

But they are deadly serious, and have two serious demands: that social assistance and minimum wage levels are sufficient for everyone to have adequate housing and to buy their own food; and that government takes meaningful action to end poverty and make food banks unnecessary.

What they calls the "food bank scenario" is, they argue, unjust, undignified and unsustainable as a way of meeting the most basic needs of individuals and families, especially in their own, relatively wealthy province of Ontario.

They don't want to shut down food banks - at least not immediately - they just want to make them unnecessary. Food banks, they argue (from bitter experience) don't solve poverty; they don't address food insecurity (only 20% of people in poverty who need food use food banks). They are stigmatising, and inefficient. Charity does not have unlimited capacity, they have found; and as demand for emergency food grows, there are physical and emotional limits to the amount of food bank volunteering they can do:

They [food bank volunteers] are helping in one of the only ways they know how but it is a job without an end and when times are tough, the stress and burden of feeling responsible for whether or not families have enough food to survive has simply become too much for many of our volunteers to bear.

This week I wrote about food banks in the UK struggling to meet rising demand. That is an experience something Freedom 90 could tell them about. Canada has had food banks since the 1990s, (there are now thousands, and 900,000 people access them each month) and three decades on they still face the same underlying challenges.

According to Canadian academic Elaine Power, writing in Food Ethics Journal, in December 2011:

The 2010 Hunger Report, an annual report issued by the national association of food banks, Food Banks Canada, reports that 35% of food banks across the country ran out of food and 50% cut back on quantities because of rising demand - a 28% increase from 2008 to 2010 - and inadequate supply.

Power describes how the pioneer Canadian food bankers fervently believed their role was temporary, and that food banks would quickly close once the economy picked up. But even when things did pick up, food banks expanded: they invested in headquarters and equipment, hired full time staff, ran glossy marketing campaigns to publicise food drives, and accepted corporate sponsors.

The result, says Power, is that food banks:

...have become an integral part of our social safety net

That is precisely what is in danger of happening in the UK. Food banks are not merely proliferating, but are now co-opted into the fringes of the welfare state: following the abolition of the social fund, some local authorities give them grants in return for them playing a formal part in local welfare crisis provision. The Department for Work and Pensions issues food bank vouchers to claimants through job centres. Delays in processing benefit claims (up to eight weeks, one food banker told me this week), and increasing incidence of benefit sanctions, mean the state is leaning ever more heavily on voluntary food banks to help people who it excludes or fails.

Even the Trussell trust, an impressive UK food bank network whose operating model explicitly attempts to design out many of food banks' structural flaws, is feeling the strain. What started as a community-based ideal - local food for local people - is becoming regionalised. Some food banks collect more food than others, and surplus produce must be shipped from one bank to another. Logistics is becoming a key operational issue. Trussell's executive chairman, Chris Mould, told me he was actively talking to haulage companies about how - in an act of corporate generosity - they might help it move tonnes of donated food around its foodbank networks. It has joined forces with the supermarket giant, Tesco, for a series of heavily promoted food collection days, major events that are vital to replenish shrinking food bank stocks, especially outside the "harvest festival" Autumn period, when public donations are strongest.

Perhaps most tellingly, the self-imposed rules - a maximum of three vouchers in a 12 month period for each applicant - designed to prevent client dependency and ensure food banks remain an emergency service, are under strain. Food bankers told me this week that as welfare cuts like the bedroom tax began to hurt family incomes, they were increasingly worried that more food bank clients were not just needing a food parcel "to tide them over" but were trapped in a more permanent state of impoverishment. Food banks were simply not equipped to deal with this level of sustained poverty, but as local support and advice services were cut back to the bone, it was not always clear to which official agency they could "signpost" these clients once the three vouchers were used up.

Food bankers told me stories this week that were moving and inspirational: their spirit, generosity and ingenuity is a sign of the voluntary sector's vitality and compassion. But the UK's nascent food banks face some fundamental questions. Canada's experience tells us that food banks don't "solve" food poverty, however hard they try. At what point do they stop peddling ever faster in an attempt to fill the gap left by the welfare state? And how do they ensure that their immense, positive energies stay focused on social justice, rather than road haulage timetables?

• Public sector cuts
• Welfare
• Poverty
• Food banks
• Food poverty
• Food security
• Communities
• Voluntary sector

Patrick Butler
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Expert advice from our latest live discussion on best practice

David Hopkins, Charities Aid Foundation (CAF)

Don't underestimate the value of natural interaction: Two vehicles that work well in terms of the idea of sharing have been the physical hub model - i.e. where an organisation has created a shared space that charities can work out of, and the natural interaction that evolves through conversation and partnerships.

It's important to bring charities together to share war stories, swap ideas and hear from others about new approaches. My experience has been that the value of these events - as a grant maker and as a participant - far outstrips the impact of newsletters, guidance notes, case studies as a means of stimulating new approaches.

Marie Faulkner, NCVO

The way we work is region-specific: We have elected community reporters across the country (two or three in each region) and rely on them to share what's going on in their region and any examples of best practice. It's important that these people are engaged - all commenting on our forums and posting on Twitter - and are usually those we have met and have relationships with. We then make sure we email them every couple of months with particular asks to ensure we have some engagement.

Sometimes it's how you manage, not what you manage: Sometimes it's not to show amazing projects or campaigns, but how organisations managed it internally.

Judith Davey, ActionAid

Share your best practice between boards: I have seen some interesting examples of sharing best practice and learning in boards in the not-for-profit sector recently: where the board of one organisation meets with a board of another organisation and shares experiences of dealing with challenges and issues.

At ActionAid we always have a member of the federation on each other's Board. So for example, I'm on the board of ActionAid Uganda and the Kenya country director is on the ActionAid UK board. This is a good way of sharing best practice from our different perspectives and contexts.

Mentoring is helpful: Mentoring and co-coaching arrangements between different not-for-profit organisations can also be a good way of sharing good practice. Arrangements like this between organisations can be really helpful as they bring different perspectives to bear when addressing shared challenges. In my experience this can be just as good as an external professional coach in terms of learning, but many charities can't afford to pay expensive fees.

Think about who you're networking with: Although an obvious point, the quality of your network is crucial. I'm lucky enough to have a great network of contacts. I'm a member of lots of linkedin groups, and it's a good idea to tick the box in settings where you get a consolidated update on a weekly basis. If I'm researching something or want input or insights on a particular topic, I'll post a carefully phrased question to the relevant groups. I've done this a lot and the responses have usually been on point.

Yearly reviews give good feedback: At ActionAid, we produce an accountability document each year showing how well we've done, describing the challenges that we've faced and how we've dealt with them. Crucially, the report focuses on how we have applied learning throughout the year. The Board approves the report, and always challenges the senior leadership team on what we've changed in the light of what we've learned. This leadership from the top is important in applying best practice.

Sylwia Presley, Barcamp Nonprofits

Sharing best practice with your competitors is important: I'm a bit worried about competitiveness in regards to good ideas. At least when it comes to digital and social media the overall culture is driven by sharing and collaboration. Keeping the best ideas might benefit your organisation, but you wont gain support of public audiences with this approach.

Sharing best practice is crucial for the future of charities and social good but also for the success of particular campaigns. So I would not draw a line at all. There is a possibility to "own" the idea with good timing of execution and presentation: if your organisation has a great idea, launches it and executes it well that should be enough of a success.

Madeleine Sugden, KnowHow NonProfit

Best practice is different for different people: I don't think there's one thing that works best. What is useful best practice for you might not be for everyone. Also, I think there's a difference between generally soaking up what's happening across the sector or in your particular field and looking for inspiration on a particular bit of work.

Mike Dykes, Charity Finance Group

Having an online document library is useful for our members: Our members tend to be resource-restrained and time-poor so being able to access examples of best practice easily and without having to 're-invent the wheel' is very important. To that end we have an online document library to which members can donate examples of policies and procedures that others can download. Our members from the larger charities have relatively more fully evolved sets of such documents and this is one way of re-distributing some of that collatoral out to the smaller member charities.

Zoe Amar is a charity marketing and digital communications expert

Use LinkedIn: LinkedIn is a treasure trove of great content and insights. The best places for these are the news feed (visible on the homepage when you log onto LinkedIn). You can break your news down into particular categories which you can follow, for example stories about PR or nonprofits. The groups on LinkedIn are also useful sources of discussion and ideas. Basically I've found that time invested in LinkedIn reaps very good returns.

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• Finance
• Voluntary sector network blog
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Emily Wight
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Few initiatives change the lives of millions. So why are projects so hard to scale up? Dan Berelowitz considers the evidence

We all have a few special projects that, to us, seem exceptional. Maybe it was a project you visited and actually saw firsthand the difference it was making to a community ; or maybe it was a carefully considered piece of evaluation showing exceptional results. More likely than not, that project was helping a few hundred people or even a few thousand – but the scale of the need stretched to the hundreds of thousands, if not millions.

This problem of scale really bothers me: why do we have so much trouble capturing ideas that work and spreading them? It's a question we grapple with at the not-for-profit I founded, the International Centre for Social Franchising (ICSF), so when pharmaceutical giant, GlaxoSmithKline commissioned a review of 900 healthcare delivery initiatives in emerging economies for their potential to replicate to scale, it seemed the ideal opportunity to answer that question.

Our first challenge was data. Usually the issue in the social sector is that there isn't any, but in our case we were lucky enough to have the Center for Health Marketing Innovations database. That said, it did need a couple of weeks of work from our team of four before it could be analysed but CHMI has since committed to improve its usability following recommendations in the report. (If any of you have used it and have feedback please let us know.)

Sifting through a vast quantity of data to decide the innovations that needed a second look was the next challenge. After putting a lot of thought into the characteristics of organisations that had successfully replicated, we developed a simple five-point binary scale to bring to the fore the most exciting models:

1. Scalable: potential to radically increase number of beneficiaries.

2. Impact: scale of the impact on beneficiaries.

3. Time Horizon: potential for implementation within five years.

4. Sustainable: clear consistent revenue stream.

5. Innovative: provides a novel approach.

Of course, once we get into the detail of choosing projects more information is needed, but we found this list so helpful as an initial filter that we have used it on a couple of other quite different projects since and it holds up.

Using these five points we selected the top 50 projects and the team then visited them in India and Kenya, identified as in our research as the two greatest "hotbeds" in healthcare innovation. In each country, we used a set of more detailed questions to assess each of the projects for scalability. Getting these questions right is critical and we drew upon resources like the our replication readiness test, and similar tools from Bridgespan, the US not-for-profit consultancy, and the helpful Social Impact Exchange.

But what is sold on websites and databases as self-sustaining more often than not doesn't hold up under scrutiny. So early on we learnt to ask interviewees: "Where does the money come from?" Another revealing question was: "When did your business model last change?" Many projects are difficult to scale up because they have been pivoted more than a few times since being founded, and lacked direction.

Still, the opportunity to visit so many projects with the intention of comparing them and finding scalable models did provide lots of food for thought:

• Successful social businesses know exactly what their hyper-price sensitive customers are willing to pay and target their services accordingly. In one case a social enterprise was able to accurately project what a $0.02 increase in price would have on their market.

• These same businesses segment their poor customers and more often than not end up targeting the richer middle- to upper-class market. In many cases this means that, rather serving the most needy, services are inaccessible to up to half of the poor.

• We thought that there would be a load of great projects needing a lot of money to scale but there weren't. Actually, there were a few really stand out projects with more funding than they could ever absorb – in this case, often from large pharma, impact investors (investors claiming to be interested in social returns as well as money) and folk just interested in making money.

• We identified six clear project types that would be useful to others who need to categorise healthcare initiatives: information and communication technology (ICT), skills training, devices and equipment, infrastructure, financing, and social marketing. Out of these we found that infrastructure and financing projects were especially interesting from a replication to scale perspective, and even more so when the two are combined together. This challenged another preconception that simple projects can be scaled up most effectively: actually, it's complex projects made simple through systemisation. This is very hard to do and deserving of its own article.

Returning to the question posed at the start, then, the truth is that we have so much trouble scaling projects because it is really hard to do. It dawned on us that even if individual organisations were absolutely brilliant, endowed with powerful leaders and financial might, they still need a whole ecosystem of innovation to develop around them to power them to success and scale. This ecosystem creation cannot be borne solely by one organisation or even by a government but requires collaboration across sectors and disciplines: joined-up thinking.

GSK listened to our recommendations and we have helped them pull together a really interesting group of people to start a conversation about practical ways to take healthcare social enterprises to scale. People around the table are as diverse as GSK's traditional competitors such as Novartis, Microsoft, the Department for International Development (DfID) and some brilliant academics. Watch this space...

Dan Berelowitz is founder and chief executive of the ICSF. He tweets as @DanICSF

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• Impact and effectiveness
• Aid
• Charities
• Voluntary sector
• GlaxoSmithKline
• Pharmaceuticals industry

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Armed forces charity says donations from EDL leader Tommy Robinson will be refunded in line with non-political stance

Forces charity Help for Heroes has announced that it will not accept any donations raised by the leader of the English Defence League Tommy Robinson.

The EDL leader started fundraising following last week's murder of soldier Lee Rigby in Woolwich, south-east London, but a spokesman for Help for Heroes said the Just Giving page set up by Robinson would be closed down and all donations would be refunded.

The charity will check for any further donations from EDL members and said they would not accept any donations from the group.

A Help for Heroes spokesman said: "He is the only one that has come to our attention but tonight we will be doing a cross-count to make sure that anyone else saying they are EDL will not be allowed to fundraise for us.

"It is the same for any political party, we do not allow political fundraising. As a charity, we are non-political."

Robinson's Just Giving page shows that the EDL leader has raised more than £3,300 so far and was aiming to raise £5,000 with a sponsored walk across London.

On the page, Robinson wrote: "On Saturday the 29th June I am going to walk from Westminster in West London to Woolwich in East London (Just over 17 miles) to lay a wreath in support of our troops (Lee Rigby RIP). I plan to raise as much money as possible for Help for Heroes.

"As you can probably tell the last time I exercised was at school, I think a 17 mile walk might be end of me! The chance of me popping my clogs due to my fitness or the likely threat I will have from the religion of peace throughout the route might even tempt David Cameron and the rest of his weak leadership to sponsor me on the off chance that this was to happen!"

Earlier on Monday, more than 1,000 far-right supporters gathered outside Downing Street, where Robinson addressed the crowd.

The EDL demonstrators chanted "Muslim killers off our streets" and "There's only one Lee Rigby" as they marched through London.

Robinson told the demonstration: "This is a day of respect for our armed forces", and "They've had their Arab spring. This is time for the English spring."

• Charities
• English Defence League
• British Army
• The far right
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Survey suggests 92% of charities want to increase business activities, but 74% don't believe enough support is available

Nine in ten charities would like to increase their income from business activity in the next three years, according to a new study. Of the 102 charities surveyed, an overwhelming majority were keen to increase trading and government contracts, indicating a desire within the voluntary sector to move away from grant-funding towards a social enterprise approach. However, 74% of charities don't believe enough support is available to charities wanting to make the transition to trading income.

The research, conducted by Social Enterprise UK (SEUK), showed that 52% of charities were 'excited' about social enterprise and 27% wanted to know more. Only 12% said they were 'confused' by social enterprise and just 7% said they were 'nervous' about the idea – findings that SEUK described as 'overwhelmingly positive'.

"Charities are generally very positive about social enterprise and keen to trade to generate income", said SEUK's chief executive Peter Holbrook. "Social enterprise is gaining real traction and is better understood by the voluntary sector. It isn't at all unusual for charities to be very business-minded now."

Holbrook's comments are supported by the fact that 45% of registered charities currently identify themselves as social enterprises – and more than half of the voluntary sector's income is earned through trading and delivering government contracts, rather than donations or grants.

But the lack of support to help charities make the transition from voluntary to trading income was a problem, in the eyes of almost three-quarters of the respondents. And 63% say more government support was needed. When asked to identify on other barriers to their charity becoming more socially enterprising, 49% chose 'lack of appropriate business skills or experience among workforce', 45% chose 'lack of access to investments/loans' and 42% chose 'lack of knowledge about social enterprise and where to start'. Almost one in five (18%) identified 'scepticism from trustees' as a problem.

Karl Wilding, director of public policy at the National Council of Voluntary Organisations (NCVO), said enterprise is "a key part of what many charities do" and that organisations such as SEUK and NCVO have a role to play in providing support and advice.

"NCVO's research shows that the proportion of income the sector as a whole earns overtook the amount it receives in donations around ten years ago, and has continued to grow since"' said Wilding. "As the Marsh review highlighted – enterprise is a skill that those in charities will increasingly need".

The survey showed that 90% of charities were concerned that voluntary and grant funding will become more difficult to secure in the coming years.

Holbrook pointed to a 'changing landscape' which is 'forcing charities to adapt'. "As public sector markets are opened up to competition, charities have to be business-savvy to bid for and win contracts, and able to prove their social impact", he said. "But the hard-won Public Services (Social Value) Act that came into force this year provides a critically important tool for charities when selling their services to commissioners."

SEUK has pointed to the London Early Years Foundation (LEYF) as an example of an organisation which has moved from a grant-dependent charity to social enterprise. When June O'Sullivan was promoted to chief executive in 2005, she decided the route to survival was through social enterprise. O'Sullivan oversaw the move from a grant-dependent charity into a sustainable business while continuing to provide a service for children and parents who couldn't afford to pay for it. In 2009, LEYF opened nurseries in other London boroughs.

"Ensuring we had a sustainable model to allow us to support London's children for decades to come was our top priority", said O'Sullivan. "The staff and management team at LEYF have been able to create a structure and culture that will enable to us to do secure the organisation's future".

Other examples of charities changing the way they operate are St Mungo's, which runs a number of social enterprises including the painting and decorating service, ReVive; Age Concern Enterprises, the social enterprise 'arm' of Age UK which offers financial products and services to over one million customers; and sexual health charity FPA which last year started selling sex toys through it's Desire and Pleasure website.

If you run a charity and would like to know how your organisation can become more entrepreneurial, click here to read a recent article from Jake Hayman, chief executive of the Social Investment Consultancy

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• Social enterprise blog
• Start up & scale up
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Joe Jervis
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Unpredictable income streams have highlighted the need among charities for realistic and effective financial forecasting

When CSV published its annual accounts last year, the sobering results reinforced the importance of financial forecasting. While a drop in income due to a loss in government funding is by no means unique, the amount by which the CSV groups fell – £10.8m, a fall of a third – was substantial.

Today's economic climate means that income streams are unpredictable, with no guarantee that grants and contracts will be renewed. It has thrown the need for realistic and effective charity forecasting into sharp focus, with finance teams aware that they must pick the most appropriate tools to boost their financial foresight.

The NCVO's latest quarterly forecast published in January revealed that over half of the charity leaders polled expect their organisation's financial situation to worsen over the next 12 months, while almost a third have plans to cut the number of paid staff in the next three months.

Recent research from PwC, CFG and the Institute of Fundraising also stressed how the persistent economic challenge is encouraging charities to adapt to difficult times, further stressing the need for effective forecasting. The research, Managing in the 'new normal': Adapting to uncertainty, showed how nine out of 10 charities surveyed were experiencing a squeeze on fundraising.

"With the economic and funding climate increasingly uncertain, forecasting is more important than ever," says Jane Tully, head of policy and public affairs at the Charity Finance Group (CFG). "In order to operate effectively it's vital that charities have a solid understanding of their financial position and can adapt as appropriate, and forecasting is an important part of this. Ultimately what charities are able to achieve will depend on income stream performance and levels of expenditure, and without a clear idea of how these are faring, planning and allocating resources effectively will be impossible."

A basic first step in forecasting, adds Tully, is to get to grips with income and costs: "Are income streams predictable or unreliable? Do you have lots of fixed costs or a flexible cost base? For income sources in particular, communication is key. Make sure you're getting the right information from the relevant teams and that they have the skills to provide a good assessment of the reliability of income sources." Tully adds that if your organisation has lots of fixed costs and one or more of your income sources could drop, you should factor this into your planning.

One obvious but important issue, she adds, is keeping track of wider economic trends and known legislative changes. This could include considering if your income and delivery will be affected by welfare changes or the spending review.

As for practical tools to help assess the financial future, these range from spreadsheets to sophisticated accounting software. However, Tully says, charities must not forget the financial evidence in their own backyard before turning to external system and resources. She says: "Look back at previous years' performance – charities have lots of their own data they can use to see how income sources have fared previously and what the impact of any unusual events or fundraising or marketing campaigns have been."

The Cass Centre for Charity Effectiveness (Cass CCE) report Tools for Success was published in 2008 but its suggestions are still relevant. It outlines key questions to consider during financial planning, such as if organisations are satisfied with budgeting processes and other financial planning and what objectives the financial management systems are designed to meet.

CCE director professor Paul Palmer emphasises the importance of cash flow as a useful basic tool in forecasting. "About 80% of all new small businesses collapse in the first two years – not because they don't have a business idea but because they run out of cash … forecasting is about being able to have a degree of certainty or evidence base that gives certainty as to how to make a decision."

Palmer says that while a "technical battery of business school management techniques" exist, not all organisations will be comfortable using such systems and organisations must not forget simpler resources such as Excel spreadsheets. "An Excel forecasting package tool [means that] voluntary organisations do not have to spend a lot of money doing forecasting." It is worth noting that NCVO describes cash flow forecasting as "a powerful management tool to help identify future deficits or surpluses in liquidity" and has published some useful basics on its website.

The CCE report describes some useful resources, such as the Income Spectrum Tool developed by Mission, Models, Money that offers a template to factor in what is needed in order to generate different types of income. The NCVO's resources include the sustainable funding project launched to help organisations develop and implement a sustainable income strategy.

Meaningful and effective forecasting, adds Tully, involves recognising that forecasting "is a process that is actively managed and that it's not just a box ticking exercise once a year to keep trustees happy". This means carrying out regular reviews to assess if income and costs match up to what is expected and ensuring you reforecast as appropriate.

She explains: "It is important to think ahead – always consider how things will look in the next 12 months irrespective of how far along the financial year you are … make sure you actively forecast at all times – not just if things aren't going so well. A mistake some charities make is to only properly engage in the forecasting process when something goes wrong. Planning is so important when things are going well, not just for times of trouble."

Other important general considerations that underpin a focus on forecasting include an awareness of your mission, attitudes to risk and – a key issue – how effective your trustees are. As the CCE's Palmer says: "A board is not just about technical skills but about intelligence and influencing skills." Having a wider understanding of new trends and policies and how they might work for the organisation – social investment bonds, for example – is also part of effective forecasting.

Failure to forecast effectively, adds Palmer, confines organisations to being stuck "in a time warp". He explains: "At the end of the day, forecasting for the voluntary sector is all about understanding your external environment … We shouldn't be in Christopher Columbus territory, but should have a rough idea of where we're going and make adjustments if we're blown off course."

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Saba Salman
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Military support charity inundated with calls and web traffic over soldier killed while wearing Help for Heroes top

Help for Heroes has been swamped with donations, leading to its website crashing, after Drummer Lee Rigby was murdered while wearing one of the charity's tops.

Supporters of the military charity took to social networks in an attempt to boost its coffers after the 25-year-old was killed in Woolwich, south-east London, on Wednesday.

The former England cricket captain Michael Vaughan was among the sports stars, actors, broadcasters and politicians who spoke out in support of the charity, urging the public to give money.

David Cameron tweeted his support and a photograph of him wearing a Help for Heroes wristband. He wrote: "Proud to support @HelpforHeroes in tmrw's @TheSunNewspaper in memory of Drummer Lee Rigby £H4H".

The Oscar-winning actor Dame Helen Mirren donned a Help for Heroes polo shirt. The Labour leader, Ed Miliband, and London's mayor, Boris Johnson, also gave their backing.

Help for Heroes offered its thanks for the "extraordinary demonstration of support", which it said had taken it by surprise.

In a statement on its website, the charity said: "Since the sad news emerged that a serving soldier had been murdered in Woolwich, Help for Heroes has been overwhelmed with people spontaneously showing their support for the armed forces.

"Our website is struggling to cope with this overwhelming reaction from the British public, some of whom are choosing to buy T-shirts and hoodies."

It added: "This sudden surge of interest in the work we're doing to help the wounded and their families has taken us completely by surprise. We just want to help, and all funds we receive will be used to provide direct, practical support to those affected by their service to our country.

"We ask all our volunteers, fundraisers and donors to remember Lee Rigby's family, colleagues and friends."

The charity said: "Thousands of people have visited our website wishing to donate or to buy H4H T-shirts in an extraordinary demonstration of support and defiance of terrorism. We are working hard to respond to this level of activity."

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Persuading trustees and key supporters that a charity needs to rebrand may be a challenge, but it is perfectly achievable

Charities have got to respond to increased competition and fast-paced developments in the way people consume information, while remaining buoyant enough to flourish in straightened times. However, instigating and managing strategic change, particularly in well established charities that have a strong history and a longstanding and loyal supporter base, can be extremely difficult.

I became chief executive of The Lullaby Trust, formerly the Foundation for the Study of Infant Deaths (FSID), in April 2011. I was recruited following the retirement of the charity's former director, who had been in post for 20 years.

I have just spent the last two years persuading trustees, bereaved parents and key supporters that we needed to relaunch, change our name and set a goal for reducing Sudden Infant Death Syndrome (SIDS).

When I arrived, FSID was in good shape financially and was hugely respected in the healthcare world. In the early 90s, we had been in the forefront of spectacularly successful public health campaigns to persuade parents to place babies on their backs to sleep. This led to a 70% reduction in SIDS. However, the impact of our campaigning and the dramatic decline in the numbers of newly bereaved parents also meant a decrease in the charity's profile. Yet, 20 years on, SIDS is still claiming the lives of five babies every week.

Before I took the job on, I asked medical colleagues whether it was possible to reduce SIDS and how we compared with other developed countries. I was told that our SIDS rate was one of the highest in the world and that it was possible to halve the number of deaths if all parents practiced safe sleep.

On being appointed, my questions to the trustees were: if it was possible to reduce deaths still further, where is the plan to make this happen, and why aren't we doing it? No commercial business would carry on for 40 years without a review, but this was not something FSID had ever seriously attempted before.

The charity had started life as a body to raise funds for medical research, with a network of local support groups run solely by bereaved parent volunteers, often from their own homes. These parents had put their hearts and souls into FSID and had helped the charity to achieve great things. However, past success convinced some influential trustees that nothing needed fixing. I was lucky to have the support of the chair of the board, but it was clear from the outset that if I we were to effectively manage the change process we needed to:

• Adopt a sensitive approach, acknowledging the emotional attachment trustees had to the old identity and FSID's historical achievements.

• Put a strong business case for change.

• Develop a three-year plan.

• Set a target, to halve SIDS deaths by 2020.

• Undertake a communications audit.

Over the last decade, the landscape has changed and 74% of infant deaths happen in the poorest communities. SIDS has become a health inequality issue. Mothers under 20 are now five times more likely to experience the tragedy of SIDS than those over 30. Research also shows that people are increasingly looking online for medical advice, with the under 25's primarily using smartphones to get information.

Online content has to be constantly refreshed and responded to, which requires full-time staff. The communications audit demonstrated that our lifesaving messages needed to be packaged appropriately for an organisation manned by 21 volunteers. Relying on printed information was no longer sustainable and we needed to persuade key internal doubters that this was the case.

After the audit, we commissioned market research to encourage those most resistant to change to view the charity through other people's eyes, especially those of our target audiences: young and first-time parents. We were able to conduct this research relatively cheaply, which greatly reassured trustees focused on costs. Feedback from these sessions revealed that, rather than conveying a supportive, reassuring image, parents found our name clinical and offputting. Although the findings were only one factor influencing the trustees' final decision, this research was crucial to persuading them that we needed to find a new name and visual identity.

FSID successfully relaunched as The Lullaby Trust in April. The rebrand has been enthusiastically received by parents, professionals and community fundraisers, who have described our new name as "calm and accessible", "poignant and persuasive". We have also had a 57% increase in visitors to our new website and our Twitter following has grown by 48%.

Some bereaved parents, who were supported by the charity in the early days, have found modernisation difficult. This might be because we helped them through their darkest times as FSID and the name change has brought back painful memories. Our response to those parents was to reassure them that the organisation's ethos had not changed. Our core purpose is the same but we have set our ambition higher – we want the UK to become a country with one of the lowest SIDS rates in the world.

Saving babies' lives and preventing heartbreak for families motivates our trustees, staff, volunteers and supporters. Ensuring we were always mindful of deep emotional attachments, emphasising the vital need for change, through insights from market research and by focusing on a target that everyone would support – halving deaths by 2020 – were the keys to success.

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The new universal credits and the personal independence payments could place greater demands on the voluntary sector

The welfare reforms being introduced by this year, including universal credit and the personal independence payment (PIP), will place a heavy burden on charities.

The National Council for Voluntary Organisations has said that the reforms will lead to greater demands being placed on the sector by benefit claimants who need "advice, support with going online, and emergency relief". The changes will also mean charities need to provide additional training for staff to assist benefit claimants, according to the council.

In addition, the umbrella body has also claimed the introduction of universal credit – which combines a range of existing benefits, including income support, child tax credits and housing benefit – will result in charities that provide specialist support in one area (such as housing) having to team up with other specialist charities (such as those helping people into employment) to meet the needs of benefit claimants. So how can charities ensure they are adequately prepared to meet these challenges?

A spokesman for the Careers Development Group (CDG), one of only two charities appointed as prime contractors under the government's Work Programme, says the organisation has set up a working group to help its staff get accustomed to the changes.

The working group is getting staff up to speed with the aid of a number of Department for Work and Pensions toolkits, including the universal credit toolkit for partner organisations and the PIP toolkit. The universal credit toolkit gives tips on how to help claimants manage their money as well as information on what services are available to help claimants find employment. The PIP toolkit provides examples of how voluntary organisations can present information about the payment to claimants in an easily digestible way.

The careers group is advising charities to sign up to the department's monthly stakeholder bulletin, an email newsletter aimed at chief executives in stakeholder organisations. The group acknowledges that the onus will often be placed on charities to help claimants adapt to the new welfare system. A spokesman says: "It is natural for those affected to turn to charities for support and information – even more so if they have an existing relationship, and of course charities cannot say no as providing support is the very essence of what we are set up to do."

Jane Alltimes, senior policy officer at Mencap, says her organisation is staging know-your-rights events because the so–called bedroom tax – which will reduce the housing element of universal credit for claimants under-occupying social housing – is worrying many people. She adds that the welfare reforms have led to an increase in calls to the Mencap helpline, but employing extra staff to meet the increased demand may not be feasible.

"More people are using advisory services, but resources are tight so getting additional staff may not be an option," Alltimes says. To address this issue, Mencap has been in discussions with the National Autistic Society about the possibility of jointly recruiting a welfare rights officer and sharing the cost. The charity is also exploring the possibility of providing links on its website to welfare information provided by other charities to avoid duplicating resources.

The fact that the reforms place a greater expectation on claimants to manage their own money – universal credit, for example, will be paid once a month into a bank account – creates new challenges for charities, according to Alice Evans, head of policy at Homeless Link .

"Financial inclusion has not been such a central element before," she says. Evans adds that a lot of homeless people have only post office accounts, which do not allow account holders to set up direct debits. Another issue for homeless charities is that claimants will be increasingly reliant on having internet access as a result of the welfare reforms, because universal credit applications will be submitted online. Evans says a lot of day centres are concerned about whether claimants will have the skills to use the internet or even have online access, and that some are considering limiting the time people are able to use computers in day centres to ensure as many people as possible get the opportunity to go online.

"This is causing a lot of apprehension and concern among agencies," Evans says. She urges homeless charities that are concerned to consult the health check documents on the Homeless Link website for guidance. For example, the health check for accommodation services highlights the need for staff to have skills related to financial inclusion and for them to check that contingency planning for debt management has been undertaken.

An Action for Blind People spokesman says many blind and partially sighted people are "frightened and confused" about welfare reform. Consequently, the charity's welfare advisers have experienced an increase in enquiries. He adds: "We're able to cope with demand at the moment, but we are concerned that if reform is ongoing, there will be even greater uncertainty, leading to more enquiries and requests for assistance. We've not increased our numbers of staff, but will monitor demand and move our limited resource around if demand is greater."

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"Who do you think you are, Donald Woods?" his wife, Wendy – played by Penelope Wilton in Richard Attenborough's brilliant film Cry Freedom – exclaims at the news that she and their five young children will have to be uprooted suddenly from their beloved South Africa for a dramatic escape into exile late in 1977. Donald's transformation from respected editor of the Daily Dispatch in East London, in the Eastern Cape, into subversive friend of militant activist Steve Biko had turned the family upside down.

Wendy, who has died aged 73, was in fact stoical and selfless, qualities that enabled the Woods family to get through the many trials of harassment and, eventually, exile.

Born in Mthatha, Eastern Cape, Wendy excelled at school and became a music teacher. She married Donald in 1962 and, over the following decade, was active in the white women's group, Black Sash, campaigning against the imprisonment of political detainees. But by the 1970s, Donald's anti-apartheid stance brought increased security police intimidation, including death threats.

On one occasion, two local workers ran into their house, and Wendy hid them in an upstairs bathroom with her. When the security police knocked on the door, Wendy replied: "I'm in here," and the two policemen immediately withdrew, unable to imagine that a white woman could possibly be in a bathroom with two black men.

The security police wired the Woods' house with surveillance microphones and recorded all telephone calls. Twice its officers fired bullets into the home.

Following Biko's murder by the security police, and with Donald now banned, Wendy arranged to attend the 13-day Biko inquest in Pretoria. While she was away, their five-year old daughter, Mary, was sent a T-shirt which the security police had laced with acid-powder, burning her face and arms. Now there was no alternative but painful exile.

While living under apartheid brought constant challenges and fear, after Biko was killed Wendy's outlook moved past fear and turned into defiance and anger. Exile was especially traumatic for her. With Donald caught up in high-profile campaigning across the world, she looked after their children, who were also finding it difficult to adjust to cold, grey England. She still managed to work for the International Broadcasting Trust, as well as providing film script analysis for Marble Arch Productions, and as a journalist, not least for the Guardian. In addition, she collected thousands of books for the University of Fort Hare, where Nelson Mandela had been a student.

Wendy worked in charities, notably as trustee and director of the Lincoln Charitable Trust. She was chair of Age Concern, Kingston, and of Amnesty International, Esher. From 2003, she was founder and chair of the Donald Woods Foundation, doing vital work in the poverty-stricken Transkei region of the Eastern Cape – Mandela's homeland.

A decent, kind and selfless person, who showed great courage and sacrificed much, Wendy never fully recognised herself as the quietly inspirational figure she was to many people.

Donald died in 2001. Wendy is survived by her children, Jane, Dillon, Duncan, Gavin and Mary, and nine grandchildren. Her son Lindsay died in infancy.

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Peter Hain
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Getting paid to work in a field you're passionate about is wonderful, but you still have to have be well organised

The culture of green transport campaigning is changing as the issue moves up the political agenda. Many groups that started as fringe organisations, run by volunteers with a passion but little power, have now become more professional: they organise themselves in order to influence policy makers.

According to the sustainable transport group Sustrans, the shift from the fringes to the mainstream also means that lobbying organisations like themselves are now recruiting supporters from a much wider audience. Joe Williams, media and policy adviser to Sustrans, says: "I think this shift is probably a reflection of green politics as well its becoming more mainstream ... although the stereotype of local activists still remains, organisations now have a much broader voice than they once had."

Attracting, and maintaining, a wider range of supporters requires more professional organisational skills, creating new jobs in the sector. Last year the London Cycling Campaign (LCC) charity launched its Love London, Go Dutch campaign – a drive to persuade London's next mayor to make the streets of the capital as cycle-friendly as any town in Holland. The campaign, it says, was instrumental in persuading Mayor Boris Johnson to announce in April that he was inviting four outer London boroughs to bid for a share of £100m to transform their districts into "Mini Hollands" and make them as cycle-friendly as the Netherlands.

After that success, LCC, which claims to be the largest urban cycling campaign in the world, has created a new role of activism co-ordinator to make sure that local politicians deliver, not only on the specific promises, but also on the wider cycling agenda. The co-ordinator's main responsibility will be to support and manage the campaign's 33 London borough volunteer groups which lobby their local council as well as promoting the benefits of cycling to their local community.

The activism co-ordinator was also created because the organisation wants to reach a wider audience in order to bring about change, according to Dr Ashok Sinha, the campaign's chief executive. He says: "We are now in that position where it's about delivering on the ground ... as opposed to making rhetorical comments – to make it work we need strong local groups. For those groups to be effective they need a co-ordinator."

Such a person does not necessarily need campaigning experience, Sinha says. "We are looking more for somebody who understands how to engage with activists, who can motivate that volunteer workforce. It's also about identifying a group's strengths and weaknesses and developing them."

The co-ordinator will also have links with campaign's project team which tries to encourage businesses and others to promote cycling and to establish bicycle user groups baded in the workplace. "The person will have a recruiter role, suggesting for example that these groups become affiliated to us," he says.

Like any campaign organisation, LCC expects its activism co-ordinator to support the cause. "The person would have to be committed to the aims of our organisation: we would expect them this to show as part of the application process: for example, if they have done something as a volunteer in another organisation to promote cycling."

However, it is equally crucial that the co-ordinator is not active in party politics. "It's important that they are seen to be politically impartial. I think it would be difficult if the person was a councillor, for example, or somebody who was a well-known local political activist."

The new activism co-ordinator role has the potential to bring significant job satisfaction because it creates a career opportunity for a keen cyclist to apply his or her passion to bring about tangible change. Sustran's Williams admits to feeling "very fortunate" to be paid for doing something to support a cause he believes in. He says: "I know that the level of job satisfaction I get doesn't apply to everybody I meet socially."

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Debbie Andalo
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