Regulators may position charities as trusted institutions with the government’s seal of approval (the black box model) or as organizations that need to be transparent in a caveat emptor or “buyer beware” marketplace (the glass house model).
The aim of regulation is to ensure compliance with charity laws – and the spirit in which those laws were conceived. In essence, these laws should promote the health of the charity sector by ensuring public trust and confidence, as well as provide charities and the sector every opportunity to achieve their potential.
In that spirit, the glass house model is likely the better choice. In the wake of charity scandals, increasing regulatory restraints and powers essentially moves towards a black box model and paradoxically could take the charity sector a step backwards.