Are charity closures undermining Cameron's Big Society?

"David Cameron's Big Society plans were ridiculed yesterday as it emerged more than 7,000 charities went under last year"

Daily Mirror, 17 August 2012

As 70,000 Olympic Gamers Makers return to normal life this week, the media has published a number of stories on the growth of volunteering in the UK. The Telegraph, for example, reported that 100,000 people had signed up to 'Keep the Flame Alive'.  

So is Mr Cameron's Big Society in full swing? Not if you read today's Daily Mirror, which reports that 'some 7,394 charities were wound up in 2011 — up from 6,398 the year before'; questioning the realty of the Big Society paradigm.    

So could there be more to this story than the figures would first suggest?

Analysis

The origin of the Mirror's figures can be traced to this factsheet from the Charity Commission which gives details on the number of registered charities in England and Wales.

A quick glance at the figures reveals that 7364 charities were removed from the register in 2011 and 6378 in 2010.

Putting aside the slight difference in the figures for 2011 as a probable typo, the Mirror has at least got its numbers right on this occasion but what do the numbers tell us?

A big blow to the Big Society?

Before we draw too many conclusions on the wider implications of these figures, it is important to make a few points.

First of all, the figures alone do nothing to contextualise the closures.

A spokesperson from the Charity Commission informed us that 'charities wind-up for a variety of reasons', not just because they are short of money or volunteers. For example, a charity which was set up for a very specific purpose may close because it has fulfilled its charitable objectives or a charity may be removed from the register if it merges with another organisation to make more efficient use of resources.

Moreover, in recent years the Charity Commission has made a special effort the clear the register of dormant charities which helps to explain why so many were removed in 2009.   

Finally, a fairer assessment of the state of the Big Society needs to consider the number of new charities as well as the number of closures. In 2011, 5589 charities were added to the register; a fall of 672 on the figure for 2010 which helps to explain why the total number of registered charities fell between these two years.

The Cabinet Office were themselves quoted by the Mirror pointing out that the total number of registered charities had actually increased in the past three years. According to the figures, this is right; as there were 160,515 registered charities in 2009 compared to 161,649 now:

However this is only correct if you compare the most recent figures with 2009 - before the General Election. The total number of charities has fallen since 2010, although it's not possible to tell whether these were before or after the election specifically. In any case, it's probably too early to draw conclusions from 2011 data alone.

Conclusion

Ignoring a minor typo, the Mirror's figures are correct for the number of charity closures in 2011. Leaving aside 2009 as an outlier (when dormant charities were being removed) it is certainly the highest annual closure figure in recent years.

Whether this is at all useful for drawing conclusions about the Big Society is another matter. Without knowing the context behind the closures, it isn't possible to say whether the charities have actually gone under financially or whether they have merely merged with others, or even closed having fulfilled their short term objectives.

Combined with not accounting for the thousands of charities opening as well makes for a limited analysis on the part of the Mirror.