This is a question which has rattled around for a decade or so and has widespread implications for how charities are run. It was asked by the Public Accounts Committee in 2014 following some well known scandals or what were thought to be scandals namely Oxfam in Haiti and the Kids Company. Since that time, the Commission has tried to sharpen its control procedures whether successfully or not is hard to say.
In parallel has been a burst of political activity by Conservative politicians criticising some charities for going beyond what they believe to be their essential purpose and invading the political space. The National Trust felt the full force of this by highlighting the role of slavery in the historic funding some of our major properties. A local MP in Wiltshire Andrew Murrison said the Trust should stick to being a ‘clerk of works’ to its properties and not go beyond that. The sector has become involved in ‘woke’ wars which rage in some parts or our media.
The Commission has had some difficulty in appointing a chair and the current appointment, Orlando Fraser, is a long standing Conservative who stood for parliament at one time. It remains to be seen how well he stands up to political and media pressure. He spent a lot of time in his opening speech telling everyone he was a barrister and QC.
Underlying these problems is a fundamental issue concerning the charity and not for profit sector. In essence, charities pick up the pieces. They help those whom to some extent the state has left behind. People who, for one reason or another, have fallen through the cracks of society who need help with housing, food, debt, addiction, mental health or many other facets of their lives need their help and support. They also campaign for change in society, historically for example, for women to have the vote, for better health provision and many other things which to some extent we today take for granted. The more successful their campaigning and the more visible their actions are, the more they seem to intrude into the political space and cause discomfort for the governing party.
The government would like them to stick to the essentials, and simply – and preferably quietly – help the poor, feed the hungry and tend to the addicts. Charities on the other hand, see many of these problems as the result of government failure. We are today facing an energy crisis with people deciding whether to ‘eat or heat’ for example. This has come about because successive governments have failed to support home grown food production, allowing supermarkets to import at the lowest price, and a failure to improve the insulation of our homes to anywhere like international standards. True, the war in Ukraine hasn’t helped. Highlighting the causes of the problems brings them into direct conflict with the political class and they don’t like it. They like – and of course – need the help charities offer as it takes a load off the government, but they don’t like charities pointing out their failures. It’s alright for them to dish out food parcels but not to question why on earth a rich country should be dishing out 2 million of them.
Which brings us back to the Commission. Their emphasis on governance and the pressure from the previous Secretary of State Oliver Dowden for them to pursue ‘woke’ and ‘political’ charities (according to him) has caused a high degree of alarm. No one would disagree with the need to tackle abuse and the misuse of charitable status. The fact remains however that the vast majority of charities – and the vast majority who work or volunteer for them – are honest people doing selfless work. Civil Society reported for example that the Commission removed just 38 trustees in a ten year period since 2002 – hardly an earth shattering number. Yet with all the fuss over governance and the like you would think charities were nests of thieves, peopled by swindlers engaged in the wholesale spiriting away millions of people’s donations.
In my view the whole thing has got out of proportion. Charities have become almost obsessed with governance. The risk is that this obsession is distracting them from thinking about the future of the charity, its continuing relevance and other aspects which together would make the charity a success. The emphasis on control by the Commission means that supporting and promoting the sector and the value it contributes to our society is almost nowhere to be seen. Their site is almost entirely concerned with control and regulation.
The tension is likely to get a whole lot worse. Looming problems over food, energy, housing and debt will increase tensions between charities and government. Trustees need to ensure that they focus sufficient attention on the well being of their charity and not to get so obsessed with governance that this gets forgotten.
The writer is author of How to be a Successful Trustee