• Law Family Commission on Civil Society publishes final report focused on Scotland
• Landmark report calls for greater collaboration between the 3 sectors
• Commission says public, private and social sectors need to be ‘firing on all cylinders’ if Scotland’s economy is to recover and grow from crises
• Report highlights 5 key areas identified by Commission research as vital
• Proposals include call for ‘Philanthropy Champion’ in Scotland to help unlock up to £300mn extra for charities each year

A groundbreaking two-year commission exploring the potential of civil society in the UK has called for bold action on the sector by Scottish government, businesses and funders to help fuel much-needed national recovery and growth.

The Law Family Commission on Civil Society, chaired by former Cabinet Secretary Lord Gus O’Donnell, has proposed a range of policy recommendations and initiatives aimed at unleashing the full potential of the charity sector over the next decade - as the UK grapples with the social and economic consequences of the Covid pandemic and the current cost of living crisis.

The Commission has outlined a raft of proposals focused on boosting collaboration between businesses, policymakers and civil society in Scotland. The report concludes that economic growth and social progress in Scotland is dependent on all three sectors – public, private and social – “firing on all cylinders and working effectively together”.

Among its various findings, the Commission concluded that there is room to significantly boost philanthropy in Scotland and across the UK. The Commission found that if the Scottish public gave a similar share of their wealth to charity as the public in New Zealand or Canada, it would provide another £300 million a year for charities in Scotland.

Reflecting on two years of research, the Commission’s final report focused on Scotland, titled Unleashing the power of civil society in Scotland, notes: “It is clear that civil society is integral to achieving both economic and social progress, and it already makes enormous contributions to both. But it is also evident that it could achieve even more.”

The Commission sets out a total of 21 recommendations, aimed at realising the full potential of the sector, around five key themes:

• Building productivity and organisational effectiveness
  The Commission recommends a “radical shift” in approach from funders away from short-term and restrictive funding and towards support for core costs and investment in people, processes and organisational development. Among this set of initiatives is a recommendation to create a new Civil Society Evidence Organisation (CSEVO) to improve the availability and spread of evidence across the sector. This could be a Scottish organisation, or a UK body carefully designed to ensure it serves Scotland effectively, according to the Commission.
  
  
• Creating timely, accessible data and robust evidence about the sector
  The Commission says the UK and Scottish governments should play “a coordination and leadership role” on social sector data, including the delivery of the civil society satellite account pledged in the Levelling Up White Paper. Funders are urged by the Commission to “encourage and support charities to collect, use and share high quality data”. The Commission says more Scottish funders, including all parts of the Scottish government, should share their own data and participate in initiatives such as 360Giving.
  
  
• Improving the scale, distribution and impact of funding for the sector
  As part of efforts to unlock the full potential of charitable giving, the Commission recommends the Scottish government appoint a full-time public official as its “Philanthropy Champion”, along with local philanthropy champions tasked with drawing funding into deprived areas, including through approaches such as match-funding schemes. It is also calling on the Financial Conduct Authority (FCA) to require financial advisors to receive training on philanthropy and impact investing, as part of its ESG and Consumer Duty responsibilities.
  
  
• Bringing businesses and civil society together
  The Commission makes four recommendations aimed at fostering greater collaboration between business and the charity sector. The Commission stresses the need for “deep and genuine partnerships between charities and businesses” but says that too often relationships between the two sectors are “not sufficiently widespread” and “do not operate optimally for either side". It is calling for the Scottish government’s Economic Development Directorate to work with the UK government’s Department for Business and Trade (DBT) to reinstate the requirement for businesses to report their contributions to charities and civil society.
  
  
• Strengthening relationships with policymakers
  The Commission calls on the Scottish government to review the membership of formal advisory structures and ensure appropriate civil society representation, as well as ensuring that initiatives such as City and Regional Growth Deals routinely build in the involvement of the social sector as they do the private sector. Policymakers and charities in Scotland are also urged to work together to drive up volunteering by policymakers and create more opportunities for both policymakers and social sector workers to undertake secondments in other sectors.

Lord Gus O’Donnell, Chair of the Law Family Commission on Civil Society (LFCCS), said:

“Charities are a key part of the solution to every challenge faced in Scotland and across the rest of the UK. Whether it is making communities safer, greener, healthier, more prosperous or more equal, charities must be at the decision-making table and operating at their optimum level if we are truly to achieve the change we need.

“As both the cost of living crisis and the pandemic have shown, charities and community groups make the difference between people eating or missing meals, being heard or left voiceless, and feeling alone or well-supported.

“The charity sector has grown to employ around 135,000 people in Scotland, but it faces real challenges in meeting the demands that are now placed upon it. There are fewer people giving regularly to charity, including the growing pool of highest earners who are earning more but giving less. Formal volunteering has stagnated. And the way that the funding system for charities works has left holes in charitable provision in some of the places that need it most, as well as disincentivising investment in skills, digital and the infrastructure that allows charities to have the greatest possible impact with the limited resources that they possess.

“The Law Family Commission on Civil Society is now calling on funders and the Scottish and UK governments to invest strategically in the productivity of the charity sector, the data available to and about it, and in the changes needed to unlock greater giving. Alongside this investment, there must be a dramatic acceleration in the partnership between civil society and business and a reset of the relationship between civil society and government. With this investment, acceleration and partnership, civil society’s full potential can be unleashed.”

Theresa Shearer, CEO of ENABLE Scotland and LFCCS Commissioner, said:

“Scotland is well-known for the scale and dedication of its charity sector and community groups and we are rightly proud as a nation of our commitment to civil society. Nevertheless, we are yet to unlock the full potential of Scotland’s social sector.

“Boosting the growth, productivity, organisational effectiveness and societal impact of civil society in Scotland, and across the UK, relies on effective collaboration and partnerships between the public, private and social sectors. Over the course of its two years, the Commission has plotted a clear road map for achieving this.

“The sector’s extraordinary contribution during the pandemic underlined the importance of its role in helping to find solutions to every challenge Scotland faces today. It is now vital we maximise the impact of civil society for the benefit of everyone in Scotland.”

Read the full report